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IDB approves $20 million to expand private sector toll road in Rio de Janeiro

The Inter-American Development Bank today announced the approval of $20 million in financing to enable a private company to expand a toll road project in the city of Rio de Janeiro that eases traffic congestion in the urban area and provides motorists with faster, safer routes.

The six-lane toll road is operated by Linha Amarela, S.A., on a concession from the municipality. The financing will enable the firm to rehabilitate an additional 3.2 miles of road, building access facilities and other works, and integrate it into to the existing 10-mile system that links the southwestern area of the city with northwestern and northeastern areas as well as downtown.

The project will ease congestion on access routes to the toll road and also complete the linkage between Linha Amarela and Linha Vermelha, another major thoroughfare in Rio de Janeiro. A viaduct on the Canal da Cunha will be constructed for that purpose.

The IDB financing consists of a $10 million loan from the Bank’s ordinary capital and a $10 million syndicated loan with funds provided by commercial banks.

The Banco Nacional de Desenvolvimento Econômico e Social is providing a $7 million loan for the project, and investors are expected to provide $13 million in additional equity.

The current IDB financing supplements a $14 million Bank loan approved in 1996 for Linha Amarela, the first completely new toll road project to be given in concession in Brazil. The toll road, which began operations in January of 1998, has cut commuting times by 45 minutes a day . It is also considered a success in terms of ridership and traffic improvement, and it is a model partnership between a municipality and the private sector for the construction of infrastructure projects.

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