US$250 million loan agreement signed with Bolivia for the country's first freeway

(La Paz, October 19, 2009).- CAF today signed with the Plurinational State of Bolivia a loan agreement for US$250 million to finance 80% of the construction costs of the La Paz-Oruro freeway. The amount will be completed with funds from the prefectures of both departments and other sources. The objective of the operation is to increase the service capacity of the route and improve traffic and safety conditions. The executing agency for the works is the Administradora Boliviana de Carreteras (ABC).

The signing ceremony took place in the Palace of Government in the presence of Bolivian President Evo Morales; Minister for Development Planning Noel Aguirre; ABC President & CEO Luis Sánchez Gómez; CAF director representative in Bolivia Emilio Uquillas, and other invited authorities.

In September last when CAF officially approved the loan, CAF President & CEO Enrique García emphasized the direct benefits of the project, including stimulation of the national economy and the social progress of the communities neighboring the highway, lower transport costs due to shorter travel times, and reduction of the accident rate which in recent years has risen significantly due to the narrowness of the highway.

The project

The existing highway is seven meters wide, with one-meter shoulders on each side along its 204 km route. Based on the geography of the land along the route, construction of a road parallel to the existing one will alternate with widening the existing platform to create a freeway with two lanes in each direction along the entire length.

In the medium and long term the upgraded highway will improve connections inside the country, facilitate productive development in its area of influence, promote the social progress of neighboring communities, stimulate the emergence of new production centers, thus generating new sources of employment. As part of the conditions of the operation, the executing agency plans to implement an assistance and promotion program in favor of the affected communities.

The project will also develop foreign trade corridors with neighboring countries, specifically by upgrading the East-West corridor which gives access to the Pacific ports of Chile and Peru, and ports on the Atlantic coast of Brazil.

For CAF, the operation favors productive, social and economic integration at national and regional level which in the long term will enhance the logistical platform and achieve complementarity with the countries of the region.