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The Inter-American Development Bank approved a US$150 million operation to Guatemala to implement an ambitious improvement and rehabilitation program of the roads connecting productive areas and departmental capitals to the main networks. This will allow a sustained transit of goods and people, which will substantially contribute to improving productivity by expanding the access to markets and social services in isolated communities characterized by high poverty rates.
Road transport is a crucial factor for productivity and trade in Guatemala, where 3.5 million vehicles circulate each year, moving more than 24 million tons of goods. Despite this high traffic, the road density in Guatemala - meaning the relationship between the length of the road network and the countrys land surface - is below average in the Latin American region (15.5 km2 vs 22 km/100 km2); furthermore, the bad conditions of roads increase costs of operation and transit times. These data rank the country 18th out of 23 countries of Latin America and the Caribbean in the Logistic Performance Index.
The program will benefit the transportation of goods by facilitating the flow of trade and promoting the economic and social integration of communities among themselves and with the countrys main network. Moreover, the paving works will improve the citizens quality of life by increasing the accessibility of communities suffering from restrictions on access to health and education centers, especially during rainy seasons.
These interventions will also help strengthen the countrys institutional capacity by incorporating management systems as well as better standards related to climate change resilient infrastructure, road safety and the generation of guidelines and good practices for the road planning.
The total amount for the project is US$150 million charged to ordinary concessional capital with a 24-year repayment term, a 6-year disbursement period, a 6.5-year grace period, and an interest rate based on LIBOR.