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IDB approves $30 million for rural roads in Ecuador

The Inter-American Development Bank today announced the approval of a $30 million loan to Ecuador to enhance and maintain rural roads, creating efficiencies and employment opportunities on a continuing basis. The project will also improve the capacity of local governments to manage roads under their responsibility and will effectively support the ongoing decentralization process.

The program will help establish Provincial Road Management Institutes with a high degree of technical, financial, operational and administrative autonomy that will have the capacity to undertake rural road maintenance and rehabilitation in an integrated and efficient way, freeing up new resources for further improvements. The institutes will establish consulting mechanisms with communities affected by the decisions on road maintenance and employ local residents, including minorities, in microentrprises that will maintain and improve the roads.

The program will repair close to 3,000 kilometers, about 8 percent of the local and tertiary (unpaved) network, and another 500 kilometers of trails for pack animals and foot transportation, and will establish an ongoing system of maintenance.

The project will have a positive impact on a continuing basis on agricultural production, school attendance and overall economic and social activity and will help reduce poverty. It will apply experiences learned in a previous rural road project for Ecuador supported by a $10.2 million IDB loan approved in 2000, and it will be coordinated with other international assistance.

The total cost of the project is $93 million, with the World Bank providing $30 million in cofinancing. The IDB loan is for 20-year term, with a five-year grace period, at a variable interest rate based on LIBOR. Local counterpart funds total $33 million.

The executing agency for the project is the Ministry of Public Works and Communications* through its Local Roads Unit.

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