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IDB road loan for El Salvador to help cut poverty in rural areas

El Salvador is to upgrade its road network in northern and eastern parts of the country thanks to a $15 million loan approved by the Inter-American Development Bank (IDB). The program will identify suitable areas and implement road works with a view to maximizing economic and social benefits for the local population.

“The operation is part of the IDB’s ongoing efforts to strengthen El Salvador’s transportation sector and rural roads infrastructure,” said Alfonso Salazar, the project’s team leader at the IDB. “It will be complemented by road safety campaigns and climate change vulnerability measures, and will ensure better access for rural populations to employment opportunities, health centers, hospitals, schools, and markets in an effort to improve their living conditions and reduce poverty.”

The four-year operation aims to make transportation more affordable and cut travel time by at least 18 minutes for every hour traveled on upgraded roads. Upon completion of the project, average operating costs of vehicles are expected to be reduced by at least 20% and traffic accidents by 50% as compared to 2011.

Two preselected sample projects will target road segments of 10.1 km between Cinquera – Tejupeque and 17.8 km between Suchitoto – Cinquera. Interventions include road surfacing and drainage improvement that will allow for year-round transportation in the region, increasing economic activity and cutting poverty levels.

The Bank’s loan is for a 25-year term, with a four-year grace period, at a variable interest rate based on LIBOR.

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