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IDB loan to help improve commodity transportation services in Paraguay-Paraná Waterway

State-of-the-art low-carbon technology for Hidrovias do Brasil inland waterway transport project will increase fuel efficiency, transport capacity, and create new jobs

The Inter-American Development Bank (IDB) approved a $100 million loan to expand and increase efficiency of commodity transportation through the Paraguay-Paraná Waterway, a project that will enhance transport integration among Brazil, Paraguay, Argentina and Uruguay.

IDB resources will help finance the purchase of state-of-the-art push boats and barges that will be used to transport 3.25 million metric tons per year of iron ore from Corumbá, Brazil, to Argentina or Uruguay via the Paraguay-Paraná Waterway under a long-term take-or-pay transport agreement with a subsidiary of Vale S.A. IDB funds will also be used to train captains, crews and maintenance personnel to operate and maintain the new boats and barges.

The project, sponsored by Hidrovias do Brasil SA, is expected to have an important demonstration effect in a sector where most of the fleet utilizes technology from the 1950s. The state-of-the-art technology for waterway transport will increase fuel efficiency, transport capacity, improve maneuverability and promote faster transport cycle times that result in further increases in transport volumes.

As many as 260 direct jobs are expected to be created in Paraguay. Fuel-efficient boats and barges are expected to avoid approximately 275,000 tons of carbon emissions over the life of the fluvial transportation service agreement with Vale. IDB financing for the project is expected to be complemented by commercial bank participation and financing from another development finance institution. 

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