Argentina to receive US$ 120 million road loan

By Richard High24 September 2009

The Inter-American Development Bank (IDB) is to loan Argentina US$ 120 million loan to finance road improvements and maintenance works in various provinces including La Pampa, Entre Ríos, Córdoba and Formosa.

The loan will also finance implementation of a diagnostic assessment to improve road network management, including better highway safety, maintenance and weight control.

The loan is the first part of a US$ 2.5 billion conditional credit line for Argentina that will support investments to improve, expand, and rehabilitate the provincial road network throughout the country.

Commenting on the loan, Rafael M. Acevedo-Daunas, the IDB project team leader, said, "The increase in agricultural production in recent years, as well as the rise in exports, has translated into growing pressure on the provincial transportation system in Argentina, which has not been accompanied by the necessary investment in terms of road infrastructure. The IDB credit line will help the country finance works to reduce this gap."

It is estimated that more than US$ 1.5 billion in annual investment on Argentina's road system would be required in the coming years in order to maintain existing roads and eliminate the backlog of expansion and improvement projects, Acevedo-Daunas said.

The conditional credit line is effective for 20 years and its loans are denominated in US dollars, with interest rates linked to the London Interbank Offered Rate (LIBOR). The first loan has a grace period of 4.5 years and an amortization period of 25 years.

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