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IDB approves $100 million for roads in Paraguay

A program to lift communities in western Paraguay out of isolation by investing in overland transportation has received the support of a $100 million loan from the Inter-American Development Bank, the IDB announced today.

The resources will enable the Ministry of Public Works and Communications* to improve and consolidate the most important road corridors in the western region, cutting travel time by one third and making some 900 kilometers of road, which are now usable only fourth months of the year, into roads that can be used all year round.

"An adequate transportation infrastructure is essential to economic development - spurring new investments, creating jobs, and improving living conditions," said IDB project team leader Henry Green.

The improved highway corridors will not only lead to trade expansion within the expanded Mercosur countries, but also with the Pacific Rim.

In one component of the program, the 469 kilometers of the Transchaco Road, Route 9, will be improved to reduce accidents and vehicle operating costs on sections that have deteriorated. A road link on Route 9 between Mariscal Estigarribia and La Patria will be paved, as will the 118-kilometer connection from La Patria to Infante Rivarola on the Bolivian border.

The Highway Directorate’s offices will be strengthened and decentralized, and professional skills of its district staffs in the western region will be upgraded in the areas of planning, inspection, maintenance and administration.

Investments will be made in environmental protection and community services to improve the quality of life of residents, and specific measures will be taken to provide community services and training for indigenous communities and to protect the land rights.

The total cost of the program is $190 million. The Andean Development Corporation is providing $60 million in cofinancing, while local counterpart funds total $30 million. The IDB loan is for a 20-year term, with a five-year grace period, at the variable pooled currency interest rate, now 6.36 percent.

The IDB is the main source of transportation financing for Paraguay, having approved 16 loans totaling $450 million for 10 projects.

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