US$86 million granted to Brazil

The US$86 million loan was granted today to the Republic of Brazil for upgrading the BR-174 Highway which connects the northern region of that country with Venezuela. This is the first long-term loan – eight years – which this financial institution has granted to a non-Andean country.

CAF is formed by ten shareholder countries: the five members of the Andean Community, in addition to five extraregional partners (Brazil, Chile, Mexico, Paraguay, Trinidad and Tobago) with which business, joint ventures, strategic alliances and trade are being promoted. Brazil has been a CAF shareholder since 1995.

CAF President & CEO Enrique García – of Bolivian nationality – said CAF was implementing an extensive plan of physical infrastructure and border integration in the region, especially in the areas of road, energy and telecommunications, which contributes to creating an expanded and competitive economic space, where its shareholder countries can work toward sustainable development and continental integration.

The loan The agreement was signed in Boa Vista, Brazil, during the presidential meeting between Venezuelan President Rafael Caldera, and Brazilian President Fernando Henrique Cardoso, who signed several cooperation and integration agreement, and closed a meeting of 60 high-level business leaders from both countries.

The agreement was signed by CAF President & CEO Enrique García; Brazilian Finance Minister Omara Guzmán de Oliveira; and Director-General of the National Trunk Roads Department (DNER), Mauricio Hasenclever Borges.

The CAF president said the institution was planning to finance other projects with Brazil, including the electricity interconnection between Santa Elena de Uairén and Boa Vista, for US$65 million, to be executed by Electrobras; and the gas pipeline from Bolivia to Brazil, to be executed by Petrobras for approximately US$170 million.

Integration corridor The BR-174 Highway will connect the cities of Manaos and Boa Vista, in the states of Amazonas and Roraima – covering 20% of Brazilian territory – with Santa Elena de Uairén, Bolívar state, in southeast Venezuela. The road will expand the Mercosur/Andean Community economic space and between them and the markets of the Caribbean, Central America and the east coast of the FTA.

The economies of the Brazilian-Venezuelan regions have developed great commercial potential characterized by trade in goods and cross-border movement of people, which has reached a considerable volume. The connection opens access to the industrial area of Manaos, which has now become an advanced technology complex.

The project consists of upgrading and paving the BR-174 Highway and optimizing 970.5 km of road between Manaos and the Brazilian-Venezuelan border by providing adequate services for efficient and permanent movement of people and cargo between the Brazilian Amazon and the Venezuelan Caribbean. The executing agency will be the National Trunk Roads Department (DNER), attached to the Brazilian Ministry of Transport.

Another characteristic of the project is that it fully integrates environmental and social variables. In this respect, parallel to the road works, a Sustainable Development Plan, which was presented by the Waimmiri-Atroari ethnic groups to protect their reserve, will be implemented for a total of US$3.8 million.

CAF is authorized to undertake operations with governments or government dependencies, private companies and financial institutions in its extraregional partner countries, as well as granting loans to finance projects whose objective is integration with one or more countries of the Andean Community, as is the case of this highway, in addition to lines of credit or finance for foreign trade.