IDB supports Paraguay road infrastructure and competitiveness improvement program

The Inter-American Development Bank (IDB) has approved a $215 million loan to help boost Paraguay’s competitiveness through the provision of road infrastructure suited to all weather conditions and safe, resilient, and reliable transportation services on National Route PY12 (stage I) and access roads.

The program aims to help improve the level of service and quality of the highway and ensure safety and year-round serviceability to guarantee access to markets and essential health and education services.

The operation will finance paving and maintenance interventions on 142 km of PY12, 22 km of access roads, and 2 km of urban roads from the turnoff for the town of Nanawa to the Triangulo junction and on access roads to General Bruguez and Ninfa, along the banks of the Pilcomayo River bordering with Argentina.

Planned interventions include construction of roadways and shoulders; adjustments to the alignment, curvature, and slopes; adaptation of embankments and sewers to critical hydrological conditions according to climate change adaptation criteria; pavement markings and road signage; installation of road safety equipment; and building three bridges on the route.

The project will encourage women’s employment in the road works and boost the Public Works and Communications Ministry’s institutional capacity, promoting gender equality in transportation projects with the design of a formal gender policy.

The program also contemplates service-level maintenance of some 166 km for a period of four years after the upgrades are completed; technical and socio-environmental monitoring of the works; and environmental and social mitigation, including expropriations and payments for environmental services.

Other planned features include technical studies to conduct an analysis of freight and possible improvements in the infrastructure and logistics management of border crossings, as well as feasibility studies for the General Díaz-Pozo Hondo segment of PY12 (stage II), among other actions.

The purpose of upgrading the highway’s technical characteristics is to increase safety, promote inclusive roads, and incorporate design criteria that facilitate universal access in urban interventions.

To these ends, the program will include updating Paraguay’s road design manual, particularly the chapters on road safety and universal accessibility; training and certification on road safety inspections and audits; and the design and implementation of a school roads program through interventions in safe, accessible infrastructure around schools in the route’s direct area of influence.

The project is expected to directly benefit some 55,000 dwellers and producers of the districts of Villa Hayes, Puerto Falcon, and General Bruguez, by ensuring they have year-round access to markets and services.

In addition, the improved route is anticipated to have a positive impact on post-COVID-19 economic recovery due to the potential for job-generation and leverage effect on the real economy of large infrastructure projects in the country. In this sense, public works are one of the main pillars of Paraguay’s Economic Revitalization Plan launched under the motto “More public investment for more jobs.”

The IDB’s $125 million loan is for a 25-year term, with a 7.5-year grace period and an interest rate based on LIBOR.

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The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region. 

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Karisa Ribeiro
IDB Project Team Leader