Uruguay receives support for road mega-concession and increases equity interest in the multilateral institution

The Republic of Uruguay increased its equity ownership in the Andean Development Corporation (CAF) subscribing to new common stock valued at US$15 million.

In the ceremony in the Palace of Government with the presence of the president of Uruguay, Jorge Batlle Ibañez, the CAF executive president, Enrique García, and the president of the Central Bank of Uruguay, Julio de Brun, signed the agreement to increase the country’s equity ownership in the Corporation.

García said Uruguay’s presence strengthens the multilateral institution’s successful role as promoter of the integration process between the two South American regional blocs: the Andean Community and MERCOSUR.

During the ceremony, the agreement on the Corporation’s first financial operation with Uruguay was also signed, which is a US$25 million long-term loan for the National Highway Mega-Concession program. The start of the disbursement phase for the execution of rehabilitation and maintenance works for the country's primary road network was also announced.

The total investment of US$150 million in the first phase of the program covers modernization, rehabilitation and maintenance of 1,272 kilometers of roads and almost three kilometers of structures such as bridges and overpasses around the country. Government, private sector, users and investors from the capital market are participating in the program. The executing agency is the Uruguay Road Corporation (CDU), a subsidiary of the National Corporation for Development (CND). The program will have a positive impact on economic reactivation and is expected to generate up to 3,000 new jobs.

The execution of this innovative program is intended to improve the operating condition of the Uruguayan road network, raise living conditions in its area of influence, reduce transport costs, and facilitate access to services, markets and raw materials, all of which will increase the competitiveness of domestic production and strengthen integration with neighboring countries.

The program is in line with the mandate of the presidential summit to promote the South American Regional Integration Initiative (IIRSA), whose main objective is to endow the continent with a sustainable and integrationist infrastructure as support for the region's competitiveness.

The CAF is financing major infrastructure projects for the South American integration process, including the Bolivia-Brazil Gas Pipeline; the Bolivia-Peru Ilo-Desaguadero Integration Corridor; the Paraguay-Bolivia Integration Corridor, Trans-Chaco Highway; the Brazil-Venezuela Integration Corridor; the Brazil-Venezuela Electric Power Interconnection; the Road Infrastructure Program in the Inter-Oceanic Corridor with Panama; the Road Transport Program for Peace in Colombia; the Yacambú-Quíbor Water System in Venezuela; and the Chavimochic Irrigation and Water Supply System in Peru, along with the development of the Paraguay-Paraná Waterway.