$150-million operation approved for Argentina in favor of South American physical integration

To strengthen the integration process of the South American region, the CAF today approved a $150 million-loan for Argentina payable in 10 years with three years of grace. The loans will be used to finance the first phase of the Road Corridors Integration Program at a total cost of $243 million.

CAF Executive President Enrique García emphasized the importance of this financing which is the first that this multilateral lender has granted to Argentina which became a shareholder of the Corporation in 2002. The loan will be used for road building to integrate Argentina with Bolivia, Brazil, Chile, Paraguay and Uruguay.

The operation in favor of Argentina was approved in the framework of the CAF strategy that gives priority to the identification, promotion and financing of integration infrastructure programs and projects, both public and private.

García said that the multilateral development bank geared its decisions to assist its shareholder countries with their processes of reform, modernization of the State and institutions, governance and competitiveness programs, as well as with the construction of physical and logistics infrastructure to facilitate the regional integration process.

The road integration program, which Argentina presented for CAF´s consideration, forms part of the planning and coordination works that South American countries are executing under the IIRSA - Initiative for the Integration of South American Regional Infrastructure. The objectives of the IIRSA are to connect South American countries through integration and development hubs with minimum standards of quality and of transport, energy and telecommunications infrastructure, to support the specific activities of each hub.

Four of the nine hubs defined by the IIRSA relate to Argentina. These are the Mercosur-Chile hub; the Southern (Meridional) including the provinces of Talcahuano, Neuquén and Bahía Blanca; the Capricornio formed by Antofagasta, Jujuy, Asunción and Porto Alegre; and the River Plate Hub.

The 2004-2006 Investment Plan being implemented by the Argentine Ministry of Federal Planning, Public Investment and Services covers a series of works that are an integral part of Phase I of the Integration Road Corridors Program, which is being partly financed by the approved loan. The funds will be used for paving and execution of works in the Formosa-Salta corridor in the Capricornio hub; Corridor to Paso Pehuenche in the MERCOSUR-Chile hub; Centro de Frontera Paso de los Libres Uruguaiana; Alternative route of the La Laguna-La Picasa highway and the Malargüe-Límite highway with Neuquen Route No. 40 South in Mendoza province.

The CAF operation will also finance pre-investment studies for rail and road infrastructure works in Phase II of the Integration Road Corridors Program to be evaluated and considered by the CAF after completion of the studies.