US$15 million loan granted to Santa Cruz de la Sierra municipality, Bolivia

A US$15.4 million loan was today granted to the municipality of Santa Cruz de la Sierra to partially finance the Municipal Infrastructure Program, whose objective is to support the economic and social development of this important region of eastern Bolivia (roads, rain drainage, pedestrian walkways) and the future route to the border with Paraguay. This first CAF loan to a municipality supports regional decentralization and development of concession and toll systems.

The agreement was signed in CAF headquarters in Caracas by Santa Cruz Mayor Johnny Fernández and CAF President & CEO Enrique García, who said this was the first loan the Corporation had granted directly to a municipality in its shareholder countries, "an important event because it promotes state decentralization, institutional reinforcement and a better distribution of the public budget."

“The road project includes a maintenance program and toll collection by concession system, which will be the start in Bolivia of the transfer of activities traditionally reserved for the State to the private sector, such as construction and/or maintenance of productive infrastructure. Operating through concessions also favors the users because it guarantees a better level of service," García added.

CAF is an international financial institution which supports the sustainable development of its shareholder countries and regional integration. Formed by Bolivia, Colombia, Ecuador, Peru, Venezuela, Brazil, Chile, Mexico, Paraguay, Trinidad and Tobago, and Paraguay, the Corporation orients its activities to reinforce the structural reforms which the countries of the region are implementing in a framework of competitiveness and sustainability, where provision of infrastructure is fundamental.

The project The Municipal Infrastructure Program proposes construction of an 18.6 km road along with rain drainage systems which will benefit several urban and semi-urban areas located in the area of influence of the Santa Cruz-La Guardia corrridor, whose population consists mainly of workers, traders and employees.

This road corridor, in addition to serving existing and future local traffic and increasing the commercial competitiveness of the city of Santa Cruz de la Sierra, has a high integrationist content since it will upgrade the city’s access roads to the international highways which lead to the Paraguayan border through Camiri-Villazón, and the Argentine border through Yacuiba, which is part of the bio-oceanic corridor.

In recent years, Santa Cruz has become one of Bolivia’s leading agro-industrial and commercial centers, where food, petrochemical, paper, distilleries industries and an oil refinery are based. The city has a population of 700,000 with a demographic growth rate of 6.4% annually – one of the highest in Latin America – due to the migratory trend toward the east of the country and urban areas.

Finally, the Program has identified a series of environmental and social opportunities which could contribute to the sustainable development of the area of influence, both directly and indirectly. These include plans to improve landscaping along the road and build a cycle way and footbridges.