CAF approves a loan to Ecuador for US$25 million

A loan for US$25 million, with a 10-year term and 2-years grace, was approved today by the Andean Development Corporation (CAF) to the Republic of Ecuador. The loan partially finances a project of improvement and realignment of the Baeza-Tena highway in the northwest area of the country. The executing agency will be the Ministry of Public Works and Communications.

CAF’s executive president, Enrique García, pointed out the urgent nature of the new loan in view of the fact that the Baeza-Tena highway is located in a zone affected by intense rains that have caused great economic and human loss.

García underscored that upon learning of the washouts in the area, CAF reacted in solidary fashion by approving the project, thereby contributing to speeding up the works.

García added that the Baeza-Tena highway project has high strategic priority because of its integrating component forming part as it does of the axis of Andean highway integration, and in addition supports interconnection by way of bimodal transportation between the Pacific and Atlantic oceans through the ports of Esmeraldas, Puerto Curacay, the Amazon river and Manaos in Brazil.

With the improvement and rehabilitation of the highway, transportation conditions will also be improved in the country’s northeast, resulting in reductions of the travel time and the cost of transportation of passengers and cargo.

The current roadway connecting the cities of Baeza and Tena is 82 km long. In addition to rehabilitation the project involves the construction of a drainage system, the paving of shoulders, construction and maintenance works on 17 bridges, and the corresponding signage. The works are planned to prceed over a period of 18 months.

Once the highway is conditioned, an increase in socioeconomic benefits can be expected as external economies come into being for the entire area affected and production and commercial activity is strengthened.

With regard to the environment, though the project lies in a fragile area, it will not have major additional impact on the natural setting. In addition, the necessary precautions have been taken to mitigate damage and to guarantee sustainability.

CAF’s loan will cover 50% of the total cost of the project. The other 50% will be financed with resources from the Ministry of Public Works and Communication, as part of a highway program that is being completed for the improvement of the road network, and the opening of more efficient communication alternatives with the purpose of promoting the social integration and economic development of the country.