CAF solves financing for construction of Padcaya-La Mamora road section

(La Paz, July 12, 2000). – Through a corporate loan for US$3,148,000 in favor of the construction company Queiroz Galvao, CAF has solved one of the most important aspirations of Tarija department which is the financing and construction of the road section between Tarija and Bermejo, part of the export corridor which links Bolivia with Argentina. The highway is important because it is also part of the Andean Highway System which will facilitate integration between the countries of CAN and Mercosur, across Bolivian territory.

This morning in the city of La Paz, CAF representative José Vicente Maldonado and representatives of the Brazilian construction company, Malthus Antonio and Berilo Torres, signed the loan agreement which structures the operation in favor of the private company. The operation will help the Tarija Department Prefecture meet its regional contribution to the financing of the Padcaya-Campanario-La Mamora section. Previously, CAF had granted two loans to the government of Bolivia for completion of this road section. With this operation, the Prefecture will be able to meet its contracted obligations with construction company to finance 30% of the total cost of the works, which had not been paid since December last year.

The loan was structured on the basis of future income from royalties which the departmental government will receive based on the rating assigned to the construction company by CAF. Although the operation was approved by CAF, its execution has required a great effort by the departmental government and by CAF because it is an innovative operation which in the future could provide continuing support for development of the infrastructure of the region.

CAF representative José Vicente Maldonado, emphasizing the work that the Corporation has been doing in favor of sustainable development and Latin American integration, expressed "his satisfaction with having cooperated in solving one of the priority needs of Tarija department – in this case road infrastructure – by means of an innovative and imaginative financing mechanism which appropriately invests, through the private sector, future income from the production and export of gas from the Department. We have given our full support with the expectation that this border integration project, which links the two South American integration processes, will be completed on time," he added.