CAF Approves $250 Million for La Paz-Oruro Road

(La Paz, September 22, 2009).- CAF approved today a USD 250-million loan for the Plurinational State of Bolivia to fund 80% of the construction of the La Paz-Oruro highway, which will be financed also with counterpart funds from municipal governments of both departments and other sources. The purpose of this operation is to increase service capacity of the route and improve the current traffic and safety conditions. The executing entity will be the Bolivian Road Administrator (ABC).

CAF Executive President Enrique García highlighted the direct benefits of the project, such as boosting the national economy and social progress of the communities around the road, reducing transport costs based on shorter travel times, and reducing accident rates, which was significantly increased in recent years due to the narrow road. “This operation confirms the CAF’s substantial contribution to the development of Bolivia's road productive infrastructure,” he said.

The project

The 204-kilometer road is currently 7 meters wide, with 1-meter shoulders on each side. The project establishes—depending on the topography of the terrain along the way—the construction of a parallel road to be alternated with the extension of the current roadway (dual highway), using the same platform. The result will be a divided highway, with one two-lane road in each direction along the entire route.

In the medium and long term, the road is expected not only to enable better connectivity within the country, but to facilitate productive development in the area of influence, promoting social progress of surrounding communities by helping establish new consumer markets and new production centers, thus creating new jobs. As part of the loan conditions, the executing agency will implement a service and advocacy program for the communities impacted by the project, with the support of CAF Social Sustainability Unit.

Similarly, the project will develop foreign trade corridors with neighboring countries, specifically by consolidating the east-west corridor, which enables access to Pacific ports in Chile and Peru, as well as one port on the coast Atlantic, in Brazil.

For CAF, the operation will promote productive, social and economic integration at the national and regional levels, ultimately leading to an improved logistics platform, with a view to achieving complementarity with countries of the region.