IDB lends Paraguay $62 million to restore roads/bridges & reconnect rural regions

On December 8, 2015, the Inter-American Development Bank (IDB) approved a loan of $62 million for the nation of Paraguay.

It will finance a program to restore and maintain rural roads, and replace old wooden bridges with reinforced concrete.

The program will improve the connectivity and access to markets in the country’s eastern region, and will help to reduce rural poverty

The program is specifically designed to reduce the costs of operating vehicles on rural roads in the area, cut the travel times required, allow all-weather transit and increase the average daily traffic.

This program will contribute in an important way to one of Paraguay’s key priorities – reducing poverty – because it is an important tool for enhancing the infrastructure in rural areas and thereby improving connectivity and access to social services and reducing the logistical costs of products in the region,” said IDB project team leader Rafael Acevedo.

Paraguay has about 43,900 km of rural roads. The great majority is made up of dirt roads that lack proper drainage, and only about 23 percent is covered by any sort of maintenance or improvement program. The lack of adequate standards and maintenance, combined with the frequent rains and soil conditions in the eastern region, contribute to the fact that more than 65 percent of the dirt roads are in bad condition and frequently become impassable.

The program is designed to improve 165 km of rural roads in five departments of the eastern region in order to guarantee all-weather transit and safety; replace 600 meters of wooden bridges with reinforced concrete; and perform routine maintenance on 713 km of roads already improved with previous IDB financing.

Those programs, among other actions, have improved 1,570 km of rural roads, maintained another 2,780 km, built 1,420 meters of bridging and put in place new road safety standards.

The new program will secure those advances and contribute to meeting the goals established in the National Plan for Rural Roads, reduce rural poverty and promote jobs with a focus on gender.

The IDB loan for $62 million is for 25 years, with a grace period of 6.5 years and an interest rate based on LIBOR.

See original IDB announcement.

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