CAF to Partially Fund Central Railway Project

In an effort to support the National Infrastructure Plan and the Public-Private Partnership (PPP) Program promoted by the government of Uruguay, CAF—development bank of Latin America—will finance part of the Central Railway Project—with a long-term USD 85-million loan.

In addition to providing a direct loan, CAF’s catalytic role in this operation includes its participation as a structuring agent, which will encourage the entry of additional lenders and the mobilization of the funds needed to achieve its financing goal (USD 855 million in funding) and the management of the CAF-AM Central Railway Financial Trust (USD 350 million), which will be managed by CAF-AM Administradora de Activos Uruguay S.A., a CAF subsidiary.

The initiative involves the financing, design, construction, rehabilitation and maintenance of 273 km of railway infrastructure in the stretch between the port of Montevideo and the city of Paso de los Toros, thus becoming a key driver for the nation’s logistical development. The high-spec railway will allow the transport of four million tons of cargo per year at a speed of 80 km/h, thus boosting competitiveness for productive sectors and promoting economic and social development nationwide.

The project is estimated at USD 1.089 billion, and is one of the most important works in the country, which together with other ongoing ventures, e.g. the rehabilitation of the Rivera Line (in the north of the country) and the Littoral Line (in the west), consolidates the rehabilitation of railway infrastructure in Uruguay and provides a new competitive and sustainable component for Uruguay’s transport system.

“One of our main goals at CAF is to ensure sustainability of economic growth in the countries where we operate, and Uruguay is a clear example. Through this loan, we seek to build the nation’s capacity as a regional logistics platform, resulting in increased road, rail and port connectivity at the regional level,” said Francois Borit, CAF director in Uruguay.