The Inter-American Development Bank approved a $20 million loan to help Uruguay advance on its plan to upgrade its main port in Montevideo, a project that will expand the port and boost its efficiency, contributing for a reduction in maritime and river transportation costs.

The supplemental IDB financing will enable the National Ports Authority to proceed with contracts established in the procurement plan. The project seeks to expand the port’s cargo handling capacity by building multipurpose wharf and deepening the access channel to allow access to larger vessels. In addition, the project will provide technical assistance through institution-strengthening, pre-investment studies and consulting assignments related to the program.

The port of Montevideo has been growing rapidly and steadily at an average annual rate of 14 percent due to an increase in foreign trade.  Its central location has played a crucial role in the growing importance of the port as a regional hub in the South Atlantic.

The new financing complements a previous $40 million loan approved by the IDB in October 2008 for the project. The new loan is for 25-year term, with a four-year disbursement and grace periods, and carries a Libor-bases interest rate. Local counterpart funds will total $11 million.