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Paraguay to improve National Route 9, boost Chaco region competitiveness with IDB support

Road improvement and maintenance will benefit small- and mid-sized producers as well as 200,000 region dwellers

Paraguay will boost its rural sector productivity and competitiveness and promote the Chaco region’s economic and social integration by improving road conditions and maintenance of National Route 9 with a $160 million loan approved by the Inter-American Development Bank (IDB).

The project will contribute to enhance traffic conditions and service quality in a stretch between Cerrito (km 50 on the highway) and Mariscal Estigarribia (km 525). It will also improve access to the localities of Loma Plata, Neuland, and Filadelfia as well as surface marking maintenance, reducing transportation operations costs and average travel time.

The 761-km-long National Route 9 (RN9) runs from Asuncion to the Bolivian border and is the main highway connecting the Chaco region with Paraguay’s administrative and economic heart. It also provides access to the Pacific coast through Bolivia, Argentina and Chile, which makes it a key corridor for intraregional and global trade. The average traffic is about 1,500 vehicles per day, of which 50 percent are midsized and heavy trucks.

Many segments of RN9 are reaching end-of-useful-life stage, with 45 percent of the area under intervention needing pavement reconstruction. This adverse situation is pushing up overall transportation costs and travel time, affecting road safety, and hindering the road’s prospects to strengthen its stance as a logistics corridor that fosters integration and productivity of Paraguay’s eastern strip.

The loan will finance pavement recoating, repair and reconstruction work as well as road safety enhancements such as road widening, rebuilding and widening road shoulders and bridges, and installing new road signaling, among other features. Additionally, it will fund climate change adaptation measures such as building embankments in areas where they are needed to preserve good road conditions. The project includes financing road maintenance for a four-year period and paying for environmental services such as the purchase of environmental service certificates to compensate for projects’ environmental impact for at least 1 percent of the works investment value.

The road improvement and maintenance works will help reduce transportation costs in areas with high production and economic potential. They will also contribute to strengthen domestic communications and territorial integration, facilitating the movement of both cargo and passengers even in rainy seasons.

The IDB’s $160 million loan has a 24-year term and a 7-year disbursement period, with a 7.5-year grace period and a LIBOR-based interest rate.

About the IDB

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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