Bolivia will improve road quality and safety with IDB support


Bank approves a $178.5 million loan to improve accessibility of the road network in Bolivia

The Inter-American Development Bank (IDB) has approved a loan of $178.5 million to improve the quality, traffic flows, access and security of the Fundamental Road Network operated by the central government in Bolivia.

The project seeks to improve roads that connect production centers with local and external markets by increasing the number of paved roads and refurbishing existing roadways.

The loan also will help to improve the overall management of highway resources through a more efficient collection of tolls, and to develop the capacity of the Bolivian Highway Administration at its headquarters as well as in its regional offices, to improve its project management.

This is a pilot effort that also seeks to improve job opportunities for women in non-traditional sectors, through their training in toll-collection, truck-weighing procedures and heavy machinery operation.

The program also seeks to support the training of micro enterprises in road conservation, by helping them to offer specialized services.

Bolivia's road network extends just 89.740 kilometers, and only 11.7 percent is paved, giving the country the lowest road density in Latin America and the Caribbean.

The lack of coverage and accessibility of the paved network not only affects Bolivia's competitiveness in the international market but also affects its domestic economic activity, because only the regions with a high percentage of paved roads have a significant share of the Gross Domestic Product.

The limited road network also limits access to transportation, basic services and quality jobs with good salaries for a large percentage of the population.

With the improved management and maintenance of its road infrastructure, Bolivia will be able to reduce travel time and the cost of operating vehicles.

The total cost of the project is $178.5 million, which will be financed by the IDB in a blended form: $142.8 million will be loaned from common capital funds, for 30 years, with a six-year grace period and an interest rate based on LIBOR. The remaining $35.7 million will come from the Special Operations Fund, for 40 years, with a grace period of 40 years and an interest rate of .25 percent.

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The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source oflong-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.