Uruguay plans to improve the rural roads network of the 18 department governments with support from two credit lines for an investment project totalling US$600 million with two initial loans completing US$150 million from the Inter-American Development Bank (IDB). The funds will support the implementation of rural roads construction in agriculture production areas, and will also be geared to improve and strengthen fiscal management and services at the departmental government level.
A US$300 million credit line for investment projects will boost agricultural production by improving the rural roads network; it will also contribute to develop overland passenger and cargo transportation services within the jurisdiction of departmental governments.
The first, US$75 million IDB loan approved under this credit line will target rural roads, upgrading accessibility and helping reduce transportation costs through rehabilitation and conservation work. The program will also contribute to strengthen the national and departmental institutions ability to manage rural roads infrastructure spending in an efficient manner.
The second US$300 million credit line for investment projects will focus on enhancing the fiscal management and investment capabilities of the country’s 18 inland departments by strengthening their governments’ ability to manage revenues, spending and investments as well as the design and implementation of projects aimed at developing strategic sectors of the economy.
The first US$75 million loan under this credit line will support a program that seeks to raise departmental governments’ revenues through improved real-estate tax collection, better financial information handling, and upgraded investment management. In addition, it will help implement investment projects oriented at upgrading infrastructure and providing better services to their local communities.
Each initial IDB loan of US$75 million is part of a corresponding US$300 million credit line for investment projects. All facilities are for 25-year terms, with 5.5 years of grace, at a LIBOR-based interest rate.
The IDB credit line for investment projects financing the rural roads program includes US$150 million in local matching funds, while the first US$75 million loan approved within this credit line also includes US$55 million in local counterpart funds.