US$70 million approved for road infrastructure in Uruguay

The Andean Development Corporation (CAF) approved in favor of the Republic of Uruguay an operation for US$70 million, destined to partially finance the Road Infrastructure Program - Phase II, whose objective is to modernize and adapt the main national routes to facilitate integration with the Mercosur countries, based on long-term sustainability. The operation covers a US$50-million loan with a 15-year term and five-year grace period, and up to US$20 million as a partial revolving credit guarantee, to provide the necessary backing for the Marketable Bonds to be issued by the executing agency for purchase by Provident Savings Fund Managers (AFAP) and other local institutional investors.

CAF president & CEO Enrique García emphasized the important catalytic effect of this partial guarantee, which will mobilize up to US$80 million on the capital market contributing to the financing of the Program, whose total cost is estimated at US$295 million. He also emphasized the importance of the approval as a contribution by the multilateral organization to the financing of road projects with impact on the competitive development with social inclusion of Uruguay and South America. The program includes various specific prioritized projects under the South American Regional Infrastructure Integration Initiative (IIRSA).

In this respect, highway construction, rehabilitation and upgrading with the respective structures, along with the implementation of aspects of logistics and road safety with a long-term sustainability approach, will permit the Republic of Uruguay to move ahead with its internal and external integration plans, determining factor for improving competitiveness. These works are currently being executed by the Uruguay Road Corporation in the framework of the objectives of the concession agreement signed between the Ministry of Transport and Public Works, and the National Corporation for Development.

García mentioned that "Uruguay’s presence in CAF strengthens the coordinating role of the integration process which the Corporation has been successfully performing between the two South American sub-regional blocs: the Andean Community and Mercosur."

The Road Infrastructure Program - Phase II comprises investments in the main corridors of the Uruguayan Road Network, which support the largest flows of freight and passengers, both inside the country and through the international connections, which will be a fundamental engine for increasing economic activity in Uruguay. For this reason, the main CAF operations in the program will concentrate on road construction and rehabilitation; construction and reinforcement of bridges and pedestrian overpasses; and the expansion of the Fray Bentos dock on the Uruguay River, to overcome the country’s deficiencies in the infrastructure and transport areas.