News Releases

Oct 21, 2009

IDB to finance construction works of São Paulo beltway project

Project to help reduce traffic congestion in Brazil’s biggest city

The Inter-American Development Bank (IDB) plans to provide up to $895 million of A/B loans to finance São Paulo’s “Rodoanel Oeste” beltway concession, the western section of a 182-kilometer project that will eventually surround São Paulo, Brazil’s biggest city. The financing is expected to be one of the largest infrastructure project financing deals in Latin America in 2009.

The beltway project will better distribute traffic flows across the São Paulo’s metropolitan region, and reduce the traffic congestion in central part of the city, where trucks are currently required to cross the city in order to reach the country’s main port. Moreover, the project will contribute to a significant reduction in greenhouse emissions. Rodoanel Oeste alone may cut emissions by more than 1 million tons of carbon dioxide per year.

The Board of the IDB approved today a 15-year A Loan of up $150 million that will be financed by the Bank’s own resources. The Board also approved two B loan tranches to be provided by commercial banks for Rodoanel Oeste. The first B tranche of as much as $350 million will mature in 13 years. The amount for the second B tranche is up to $395 million and may eventually be used upon certain conditions to replace the short-term subordinated loan provided by local commercial banks with long-term senior loan.

Companhia de Concessões Rodoviárias and Encalso Construções Ltda. control Concessionária do Rodoanel Oeste, a special purpose vehicle created to upgrade, expand, operate and maintain Rodoanel Oeste.

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