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Brazil’s Espírito Santo State to improve highways with support from IDB

The Inter-American Development Bank (IDB) approved a $175 million loan to contribute to the socioeconomic development of Brazil’s State of Espírito Santo by improving ground freight and passenger transportation conditions on its highways.

The program will continue the work of two earlier programs financed by the Bank, facilitating access to social services and income-generating activities and providing Espírito Santo’s population with a faster, more economical, safer, and more reliable and efficient ground transportation system.

It will add 15 km of paved roads to the network, rehabilitate and improve the conditions of another 220 km of highways, increase their capacity in many segments, and reduce the amount of highways in poor or extremely poor condition by 15 percent, lowering transportation costs by 12 percent and cutting traveling time by 15 percent.

The program will boost accessibility to markets and basic services, generating better traffic conditions on nearly 9 percent of the entire paved state highway system and 50 percent of all sections in poor or extremely poor condition. Improvements in cargo transportation can have a major impact on the state’s economy, as fully one-third of all Brazil’s exports pass through Espírito Santo’s seven ports.

Additionally, the program will help provide institution-strengthening for the state’s Highways Department, financing support for the road management and planning sectors, including implementation of an information technology master plan whose preparation began in the second IDB-financed program. It will also help to bring the Highway Master Plan into full operation, with updated surveys of field data and development of new road management tools.

The loan is for a 25-year term, with a five-year grace period, at a variable interest rate based on Libor. The State Government will provide an additional $75 million in local counterpart funds.

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