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Chile to improve public transport system with IDB support

The Inter-American Development Bank approved a $10 million loan to support Chilean Government plans to implement reforms to improve public transportation throughout the country, including the areas affected by the earthquake and tsunami that struck Chile on Feb. 27.

The funding will help finance studies and provide technical assistance and advisory support to the Transport Ministry on the implementation of reforms to improve the service and strengthen the operation and the impact of assistance and subsidy programs for public transport in the regions.

The prioritization of those investments, as well as preinvestment studies supported by the loan, could target coastal cities struck by the earthquake and tsunami.

The IDB's assistance will help analyze institutional systems to enhance efficiency in planning and managing public transportation systems in the country's metropolitan areas. In the regions, it will help to improve the oversight capacity of the investment plans and will finance the upgrading of the vehicle fleet in rural areas.

The program will also shore up school transport and regional transport in remote rural areas that due to their geographic location, their very small population, or their socioeconomic characteristics are unable to sustain a profitable transportation system.

The IDB loan will help finance plans to improve public transportation in the regions, providing support to investment initiatives to improve the management, infrastructure, and regulation of the country’s various municipal public transport systems, as well as other infrastructure and connectivity projects.

The loan is for a 10-year term, including a three-year grace period, and carries a variable interest rate based on LIBOR. The Government of Chile will provide $2.68 million in local counterpart funds.

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