The Inter-American Development Bank (IDB) has approved a $76 million loan to finance a multi-faceted public works program in Uruguay designed to upgrade the country's main road network and reduce accidents by improving road safety.
The project by the Corporación Vial del Uruguay II seeks to cut transportation costs by reducing travel times and vehicle operating costs, and to increase private financing for infrastructure by supporting the process of designing and implementing projects with public-private partnerships and designing other instruments for accessing capital markets.
“With this financing, the IDB seeks to support efforts to improve future performance and help Uruguay develop projects designed as public-private partnerships,” said Andrés Pereyra, head of the IDB's project team. “This will attract private financing to improve those segments of roads most needed for the transportation of basic goods.”.
The project will finance improvements and maintenance of the country's principal road network; technical, environmental and economic studies of road construction plans; contracts for monitoring the construction work; studies required for the development of a road works management manual; support for adopting new technologies; and studies and audits of road safety.
The improvement plans call for repairing the structure and surface of paved roads and include construction projects focused on increasing the safety of the road network supervised by the Corporación Vial del Uruguay. They include vertical and horizontal signage, the creation of pedestrian crossings in populated areas and the application of road safety measures such as equipment to reduce speeds and dissipate energy in case of accidents.
At the same time, the program will help with the process of designing and implementing public-private partnership projects, by financing contracts for the technical, economic and financial evaluation of those projects and financing the work of Uruguay's National Corporation for Development to structure public-private partnerships that will carry out infrastructure projects and offer related services.
It will also assist with the structuring of other financial instruments to access capital markets for projects to improve and maintain other sections of the main road network licensed to the Corporación Vial del Uruguay.
The IDB's $76 million loan, from its Flexible Financing Facility, is for 20 years, with a grace period of 5 ½ years and an interest rate based on LIBOR. The program calls for a local counterpart contribution of $13.5 million.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source oflong-term financing for economic, social and institutional development in Latin America and the Caribbean.The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.
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