Bolivia: integration starts in the South

Financing agreements for $220 million

Making the integration of the Bolivian South a reality

The Bolivian government and the Andean Development Corporation today signed financing agreements for $220 million for the "Integration Highways of the South” project. The infrastructure project, which has long been an aspiration of the Potosí and Tarija departments, will integrate the regions of the country, promote the economic development of the Bolivian south (Tarija-Potosí-Villazón) and stimulate Bolivia’s foreign trade with the markets of Mercosur, particularly Argentina.

The agreements were signed in the presence of Bolivian President Carlos Mesa, Finance Minister Javier Cuevas, Minister of Services, Public Works Minister Jorge Urquidi, National Road Service President José María Bakovic, and CAF Executive President Enrique García.

The operation consists of a $70-million loan to Bolivia and a guarantee in favor of Banco de Brasil as agent of the Brazilian Export Promotion Program (PROEX) which will contribute $120 million to the operation on concession conditions. The total cost of financing and investment is $256 million.

Integration Highways of the South is currently the most important physical infrastructure project under way in Bolivia and the CAF is proud to be part of this development, with a total contribution of $220 million, including $30 million already approved for the transport sector in Bolivia.

CAF Executive President Enrique García referred to the positive impact of the execution of this project, which will provide Bolivia with a modern transport system to strengthen its internal integration and integration with its neighbors. As part of the South American Regional Integration Infrastructure Initiative (IIRSA), the operation finances the development and upgrading of road sections in Bolivia’s integration and development hubs, particularly the Potosí-Tarija highway known as the Route of the Liberators. The integration hubs reflect the development of agroindustrial and tourism regions in Bolivia, and in Argentina, Brazil, Chile, Paraguay and Peru.

Since the start of the IIRSA initiative, the CAF has financed 33 investment programs and projects in this vision of South America integration, contributing over $1.50 billion of a total investment of over $5.60 billion dollars.

García added that regional physical infrastructure is a priority objective for the CAF because it is a fundamental factor for the socioeconomic development of South America. These projects overcome geographical barriers, forge closer relations between markets, and promote new economic opportunities in the region.

The “Integration Highways of the South" project is part of the series of initiatives that the Bolivian government is executing to reactivate the economy, increase competitiveness and combat poverty. The projects will provide permanent and safe road access to an extensive region of Bolivia; stimulate local and regional activity in the localities situated along the highways; consolidate the main south-north transport corridor of the Bolivian road system; surface international road connections with Argentina, Brazil, Paraguay and Chile. These works will improve the competitiveness of Bolivian products and services in the south by cutting costs and travel times.

The project also has a social component aimed at promoting productive capacities in the sectors that directly benefit from the new roads. The works will generate indirect benefits for the population by reducing vehicle costs, shortening travel time, increasing production in the economic activities of the region such as wine-growing, mining, agriculture and tourism. As a result of the road surfacing, general economic activity will increase in terms of jobs and local income.

The CAF has supported the upgrading of the Bolivian road infrastructure through a series of projects: Road Rehabilitation and Maintenance Program; Tarija-Bermejo Highway Maintenance and Surfacing Program; Santa Cruz-Puerto Suárez Road Integration Corridor.

In the Bolivian south, the CAF has financed the following road sections: Campanario–La Mamora, Padcaya–La Mamora, La Mamora-Km 19, La Mamora-Emborozú, Potosí-Cuchu Ingenio and Cuchu Ingenio-Bella Vista, among others.

The CAF has also financed the main routes of the basic road network that links Bolivia with neighboring countries. with Peru, the Río Seco-Desaguadero highway and the International Bridge over Desaguadero River; with Chile, the Oruro-Toledo, Oruro-Ancaravi and Ancaravi–Huchacalla sections, along the Oruro-Pisiga route; and with Argentina, the Tarija-Bermejo highway. In addition to the bi-oceanic routes: San José–Roboré and Cotapata-Santa Bárbara.