Paraguay to Improve Rural Access to Services and Productive Markets with IDB support

WASHINGTON — The Inter-American Development Bank (IDB) has approved a $75 million multiple works loan to boost agricultural competitiveness and economic and social development in rural Paraguay by improving rural roads in the country’s Eastern Region.

The operation, which has been approved by the IDB's Board of Executive Directors, aims to expand vulnerable populations’ access to services and productive markets, address local road infrastructure gaps, and make them more resilient by prioritizing positive social and economic impact.

The IDB-financed program will improve approximately 123 kilometers of local roads through drainage, erosion control, slope protection, and other measures. It will also build new bridges, replace ones in critical condition, and maintain the improved roads for four years.

The program will also implement road safety strategies to make the schools along the roads safer and easier for students to access.

In addition, the program will finance an updated Transportation Infrastructure and Services Master Plan, which will build the sector’s institutional planning capacities and optimize public spending.

This program will benefit an estimated 170,000 people, including those who live and work in the areas served by the roads to be improved. Approximately 30 percent of this population lives in poverty. The stretches of road targeted by the project include Carayaó-Nicolás Bo, Cristo Rey-Carpacué, and Abaí-Tarumá-Tuna, in the departments of Caaguazú and Caazapá. The program will also build a 100-meter bridge over the Monday River in Colonia Pengó San Miguel in Alto Paraná, among others.

The IDB has been a strategic partner for Paraguay as the country integrates its regions and expands access to markets and social services for its rural population. In the last decade, the IDB has supported several rural road and highway improvement programs, and this operation complements and builds on that progress.

The IDB loan has a 22.5-year repayment term, an 8-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).