IDB Issues $25 Million Credit Line To Improve Bolivia Traffic Circulation

The project will boost socioeconomic integration both at domestic level and with neighboring countries

The Inter-American Development Bank today approved a $25 million credit line to finance improvements in traffic circulation in two segments of Bolivia’s National Road Network, in order to boost the country’s economic and social integration, both internally and with neighboring countries.

The funds will support a program aimed at reducing transportation costs and travel times for passengers and goods on road network’s East-West Corridor—which links important productive areas in Bolivia with domestic and international markets—and at preserving the country’s road assets by promoting sustainability through the implementation of appropriate maintenance systems.

Specifically, the program will improve two segments of that corridor: Parotani-Confital (78 km), and Espíritu Santo II-Ivirgazama (95 km), which are nearing the end of their useful life.

Currently less than 40 percent of those segments is in good condition. At the end of the three-year program, at least 80 percent of those stretches are expected to be in good condition, reducing vehicle operation costs and travel times by 10 percent.

The East-West Corridor is Bolivia’s most heavily traveled road and carries the bulk of the country’s freight. It also links the country’s most important cities with Chile and Peru to the west and with Brazil and Paraguay to the east and southeast.

Due to geographical and other factors, Bolivia depends on road transportation for most of its foreign trade. Yet its road network is limited both in terms of length and traffic conditions.

In the case of National Road Network, only 30 percent—about 4,800 km—is paved. The rest is made up of gravel roads (49 percent) and dirt roads (21 percent).

The IDB financing consists of a $17.5 million loan from the Bank’s ordinary capital for a 30-year term, with a six-year grace period, and a $7.5 million credit from the concessional Fund for Special Operations for a 40-year term, with a year grace period, and 0.25 percent interest.

Topics: Bolivia, credit line, Espíritu Santo II-Ivirgazama, funding, Inter-American Development Bank, maintenance, Parotani-Confital, traffic, transportation, travel times

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