The Inter-American Development Bank today announced the approval of the first phase of a $105 million line of credit to improve El Salvador’s road system, including the rehabilitation and reconstruction of 100 kilometers of roads that were damaged by the earthquake in January of this year.
The Board of Executive Directors approved a $58 million loan for first phase of the five-year program, which is expected to receive an additional $47 million IDB loan for the second phase.
The total cost of the multiphase project, which was planned before the earthquake struck, is $136.72 million, including $31.72 million in local counterpart resources.
The operation is one of several IDB projects that will assist El Salvador’s recovery from a quake that killed more than 800 people and destroyed or damaged approximately 165,000 homes.
The Bank approved a $20 million emergency loan for national reconstruction one month after the Jan. 13 quake and is now preparing a second emergency loan for an equal amount to finance assistance needed as a result of a second quake in February.
Because the quake and aftershocks damaged some main highways and made smaller roads impassable, the government enhanced an existing road improvement plan to include resources for reconstruction of the roads damaged by the quake.
The roads program will also include rehabilitation and improvement of 600 kilometers of tertiary gravel roads in rural areas, establishment of a new and better system of road maintenance, and modernization of the institutional structure of the Ministry of Public Works.*
The IDB first-phase loan is for a 25-year term, with a three-year grace period, at the variable annual interest rate, now 7.1 percent.