US$250 million loan approved for La Paz-Oruro two-way road

(La Paz, September 22, 2009).- CAF today approved a US$250 million loan for the Pluri-National State of Bolivia to finance 80% of the cost of the construction of the La Paz-Oruro two-way highway, which will be supplemented by matching funds from the prefectures of the two departments and other sources. The objective of the operation is to expand the capacity of the route and improve existing conditions of serviceability and safety. The executing agency will be the Administradora Boliviana de Carreteras (ABC).

CAF President & CEO Enrique García emphasized the direct benefits of the project which are stimulus for the national economy and the social progress for the communities adjacent to the highway, lower transport costs due to shorter travel times, and reduction in the accident rate which in recent years has increased significantly due to the narrowness of the road. "This operation confirms the Corporation's substantial contribution to the development of Bolivia's road and productive infrastructure," he said.

The project

The 204 km highway is 7 meters wide with 1-meter shoulders on each side. Based on the geography of the land along the route, construction of a route parallel to the existing one will alternate with widening the existing road using the same platform. This will create a two-way highway with two lanes in each direction along the entire length.

In the medium and long term the improved highway will improve connections inside the country, facilitate productive development in its area of influence, promote the social progress of neighboring communities, stimulate creation of new consumption markets and production centers, and generate 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 communities affected by the project with the support of the CAF Social Sustainability Unit.

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 in Brazil.

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