US$100 million approved for Santa Cruz-Puerto Suárez road corridor in Bolivia

The Andean Development Corporation (CAF) today gave renewed backing to the physical integration of South America by approving a US$100 million loan for the Republic of Bolivia to finance the Santa Cruz-Puerto Suárez Road Integration Corridor project.

The CAF executive president, Enrique García, said the operation is a key link in the inter-oceanic corridor being promoted through the South American Regional Infrastructure Initiative (IIRSA) to which the institution is committed and whose objective is to make South America into a more integrated and competitive region. The IIRSA initiative, whose objective is to transform South America into a more integrated and competitive region, divides South America into 12 integration and development corridors. One of these is the region from Puerto de Santos in Brazil to the Peruvian and Chilean Pacific ports of Ilo, Matarani, Arica and Iquique, passing through Puerto Suárez, Santa Cruz and La Paz.

The Santa Cruz-Puerto Suárez project forms part of Bolivia’s Basic Network No. 4 and is one of the most important road corridors in the IIRSA initiative because of its positive impact on five countries: Bolivia, Brazil, Paraguay, Chile and Peru, García said.

At a total cost of US$372 million, the project is cofinanced by several multilateral lending institutions, with the CAF covering 27%. The rest will be contributed by the Inter-American Development Bank (IDB), the European Union, the OPEC Fund and the Republic of Bolivia. The executing agency is the National Highway Service.

The project involves building a 600-km road to connect Santa Cruz de la Sierra with the border town of Puerto Suárez, integrating eastward with Brazil and westward with Peru and Chile. The new link will also open up an alternative connection with the Paraguay-Paraná Waterway on the Brazilian border, which offers Bolivia an outlet to the Atlantic Ocean along the River Plate.

A project of this scope is of prime importance for the development of regional integration between the Bolivian south and east. The new road and the existing rail transport will contribute to the development of the energy pole of the Bolivian east, by stimulating the expansion of agriculture into the area between Pailón and San José and diversifying agricultural production between San José and Puerto Suárez.

The project is also expected to open up large areas of land to livestock development; increase the level of development and welfare of the population in its direct area of influence; foster international trade through the Paraguay-Paraná Waterway, mainly with the countries of MERCOSUR; and develop a national and international communication corridor expanding its field of influence into two neighboring countries.

With this loan, the CAF is making a decisive contribution to realizing the old dream of connecting eastern Bolivia with Brazil, while building the backbone of the Brazil-Bolivia-Paraguay-Peru-Chile inter-oceanic corridor under the IIRSA initiative. In the recent past, the CAF has contributed to the financing of another old dream of Bolivia: the Bolivia-Brazil gas pipeline, which is now becoming a reality on a route near and parallel to the Santa Cruz- Puerto Suárez road corridor.

An integrating initiative

The IIRSA initiative was approved by the presidents of South America at a meeting in Brazil in September 2000, on the basis of the Action Plan for the Integration of South American Regional Infrastructure, prepared by the CAF and the IDB. The Plan sets out the guidelines for the institutional functioning of the initiative. Twelve integration and development corridors were selected on which planning work is already under way.

With its central geographical location, Bolivia is one of the countries that offers most possibilities for making the integration of the regional physical infrastructure viable through four integration corridors (east-west, north-south, west-north, and west-south) which will be instruments for development in several agroindustrial areas in Bolivia as well as in Argentina, Brazil, Chile, Paraguay and Peru.

In this context, Bolivia is making a sustained effort to improve its border highways in the west, with the Río Seco-Desaguadero toward Peru, and Paracamaya-Tambo Quemado toward Chile.