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Rural areas of Paraguay to gain greater access to transport, goods and social services

IDB loan of $100 million will finance upgrade of roads, help increase production and benefit 1.3 million people

Paraguay will improve connections to the rural area of departments in the Región Oriental through a road upgrade program that will be financed with a loan of $100 million from the Inter-American Development Bank (IDB). Half of the money will come from its ordinary capital fund and the other half from the China Co-Financing Fund for Latin America and the Caribbean.

The program will seek to provide better access from production areas to consumption points. It will also aim to improve access for 1.3 million people living in the country's poorest rural areas to regional markets, goods, social services and transport. All this will be achieved by upgrading part of the main system of rural roads and following up with appropriate maintenance.

“The program is part of the plan and the actions that Paraguay is implementing to fight poverty that still affects nearly 24 percent of the population,” said Vera Lucia Vicentini, IDB project team leader.

The results expected are these: an improvement in the quality of rural roads, a 20 percent cut in operating costs for vehicles and travel times, elimination of total blockage or restrictions on traffic throughout the year, and an increase in agricultural production.

A positive impact is also expected in the area of gender equality, as this is the first time that active participation of women is being encouraged both in the construction and maintenance of roads, with a specific strategy in tandem with contractors and publics works supervisors, the development of courses for training and skill-building among the local population.

The program calls for a variety of public works projects, including the improvement of 390 kilometers of rural roads to bring them up to standards that ensure they will be passable and safe; the replacement of 1,900 small wooden bridges with concrete ones; routine maintenance of 530 kilometers of rural roads, incorporating local micro-businesses into the management model. This will boost employment and economic development in the targeted areas.

The works projects will feature road safety components aimed at getting drivers to slow down and avert accidents in high-risk areas. Designs will be subject to a road safety audit to make sure they include proper safety features. 

The loan is over 23 years with a grace period of five-and-a-half, and an interest rate pegged to the LIBOR. It is being matched by a local contribution of $25 million.