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São Paulo improves highway network with IDB loan

The Brazilian state of São Paulo will improve its roads network with a US$194 million loan approved by the Inter-American Development Bank.


The funds will support a São Paulo State program to rehabilitate pavement and drainage and stabilize embankments in critical segments of approximately 2,500 km of state roads.


The project mainly focuses on the state's local road system (secondary/municipal roads), where traffic and safety conditions are in most need of improvement. The goal is to provide sustainable transit conditions for the movement of persons and goods, at lower operating costs and with greater levels of safety.


The project also includes an institutional strengthening component to enhance the management of municipal road maintenance.


The IDB’s Board of Executive Directors approved the loan Tuesday.


Since 2001, the IDB has supported the State of São Paulo in the implementation of two highway rehabilitation programs intended to enhance the state's competitiveness and production capacity. The present program is a continuation of the programs and activities pursued in phases I and II.


The State of São Paulo is Brazil’s manufacturing hub, accounting for roughly one-third of the country’s GDP. Its road network carries freight valued at US$190 billion, of which 20% is destined for export. The state is home to 25% of the Brazil's livestock herd, is the world's third-largest producer of orange juice, and accounts for a third of national fruit production.


São Paulo is also the main producer of sugarcane and its ethanol derivative, with annual output of close to 11 million m³. Continued improvements in transportation infrastructure are considered an essential condition for the forecast expansion of this industry.


The program will be carried out by the São Paulo State Highways Department. The IDB loan from the Bank’s ordinary capital is for a 25-year term, with a 5 year grace period, at an interest rate based on LIBOR.

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