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IDB supports road infrastructure upgrades in Peru

Improving the road linking Huánuco - La Unión - Huallanca will facilitate exports of products from Peru's Sierra and jungle

The Inter-American Development Bank (IDB) has approved a $80 million loan to support upgrades, improvement and conservation of the Huánuco - La Unión - Huallanca road, which links productive areas of Peru's sierra and jungle with the country's main foreign trade hubs, including the port of Callao.

The road stretches along 150.4 kilometers between Huánuco, La Unión and Huallanca, and links the Lima – Pucallpa logistical corridor with that of Pativilca - Carhuaz, one of the main access routes to the Panamerican Highway. The stretch of road is also part of the so-called Carretera Longitudinal de la Sierra, which links the Ecuadoran border with the southern frontier of Bolivia and is a key route for the flow of agriculture and mining products.

The project will be carried out with a 10-year contract that foresees improvement, operations and conservation of the road. The contract calls for paving the road with asphalt concrete, widening it, improving safety features, conservation of the entire corridor and construction of weight station, a toll booth and support services.

Once concluded, the project will cut travel times by 50 percent and reduce travel costs for both passengers and freight. It will provide better access for 243 towns and villages, directly benefiting 272,000 people, many of whom are low-income and live in rural areas. The project will also benefit more than 1,000 vehicles that use the road daily, 30 percent of which are trucks carrying freight.

The total cost of the project is $495.07 million. Peru will make a contribution of  $415.07 million, while the IDB will provide $80 million over five years, with an interest rate based on LIBOR.

About the IDB

The Inter-American Development Bank works to improve lives. With a history dating back to 1959, the IDB is one of the leading sources of long-term financing for the economic, social and institutional development of Latin America and the Caribbean. The IDB also produces groundbreaking research and offers policy advice, technical assistance and capacity building to public and private sector clients throughout the region.