MercoPress. South Atlantic News Agency

Paraguay expects 650 million USD in loans from Mercosur summit

President Fernando Lugo and Minister Lacognata

Paraguay expects the Mercosur summit that begins Monday in San Juan, Argentina, to approve 650 million US dollars in loans. The Paraguayan Foreign Affairs ministry also confirmed that President Fernando Lugo and chancellor Hector Lacognata will be attending the meeting.

“In this coming regional meeting which takes place every six months, and is at Mercosur highest decision making level, it is anticipated, among other issues, the approval by the Structural Convergence Fund of financing for several projects totalling 650 million US dollars, of which 75% from FOCEM”, said an official release from the Paraguayan ministry.

The funds are earmarked for the recovery and asphalt carpeting of a 180 kilometres route in one of the country’s main agriculture areas. A second project refers to the construction of a 500 KV high tension grid which should connect the hydroelectric complex of Itaipú, (the world’s largest operational dam) and Villa Hayes in the outskirts of the capital Asunción.

The new power line should help energy rich Paraguay overcome the recurrent brown and blackouts.

FOCEM was created following complaints from Mercosur junior members (Paraguay and Uruguay) that the group had become a two players club (Argentina and Brazil) which on occasions imposes limits to regional trade.

Mainly financed by Brazil and Argentina, FOCEM helps finance structural projects in Mercosur smaller partners.

Energy-short Uruguay is also expecting a loan to help construct a power net work linked to the Brazilian grid.