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Uruguay to improve transport infrastructure with IDB support

Loan will finance partial rehabilitation of the road network, improve safety, and strengthen rail transport

The Inter-American Development Bank approved a $80 million loan to finance rehabilitation of Uruguay's road network, improve road safety in the intercity network, and help increase the role of rail transport in the freight sector.

The Highway Infrastructure Program II aims to support maintenance and efficient management of Uruguay’s transport infrastructure to meet the urgent needs created by the country’s sharp economic growth in the agriculture and forestry industries. This growth has resulted in a significant increase in heavy traffic and impact on the country's road network.

"This highway infrastructure project will help maintain the quality of the country’s road network, which is administered by the National Directorate of Roads (DNV). As a result, it will prevent skyrocketing logistical costs in the agribusiness sector,” said Andrés Pereyra, IDB project team leader.

The operation will finance the rehabilitation of segments of highways that are part of international corridors or the country’s primary or secondary network.It will also fund works to improve safety, particularly lighting for urban crossings and rural intersections, as well as road markings or signage on international corridors and primary and secondary highways used in freight transport.

Other activities include engineering, environmental, and economic studies needed to carry out the program and to spur development of the railway sector.

It is expected that the program will improve the condition of pavement in the partially rehabilitated corridors, cut operating costs of vehicles, reduce accidents in the production corridor, spur the reorganization of the railway sector, and increase production efficiency.

The IDB loan was extended for a 25-year term with a five-year grace period and a variable interest rate based on LIBOR. Counterpart funding totals $20 million.

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