$87 million loan will strengthen the country’s transportation network at regional level

Panama will strengthen its road transport network, boost productivity in the country’s central and western regions, and increase access of the Ngäbe-Buglé indigenous rural communities to basic services with a $87 million loan from the Inter-American Development Bank (IDB).

The program will invest in rehabilitation and maintenance of secondary roads in the Veraguas Province and of rural pathways in the Ngäbe-Buglé area, and build a new bridge over the River Chico on the Pan-American Highway in the Chiriquí Province. It will also strengthen the capabilities of the Public Works Ministry by financing technological improvements and help the government meet its 2015-2019 Strategic Plan.

This investment will improve the transportation system, making it safer, more accessible and more resilient, with infrastructure that incorporates climate-change-event-resistant as well as road-safety and ethno-engineering features. Panama is the second country in Central America behind Costa Rica in terms of paved km per inhabitant; however, many roads in low population density rural areas are not in an optimal condition.

Eighty-two percent of Panama’s secondary and tertiary roads are in a mediocre to bad state and have been negatively affected by climate change events. This hampers access to the main roads, and as a consequence many agricultural and cattle products are unable to reach consumption centers. Rural area dwellers also see their access to basic services such as health and education severely limited, particularly in winter time. In the specific case of the Ngäbe-Buglé aboriginal community, bad road conditions hindering access to health services are one of the reasons behind their high maternal and infant mortality rates.   

The IDB’s US$87 million loan is for a 20-year term, with a 4-year disbursement period, a 4.5-year grace period and a LIBOR-based interest rate.