Multilateral financial institution the Inter-American Development Bank (IDB) has approved the establishment of a $1 billion credit line to back Ecuador’s road infrastructure programme.
The IDB said in a statement its first loan under the credit line will be a $350 million loan backing a new bridge over the Babahoyo River, as well as a number of road maintenance contracts covering around 810 kilometres of paved highways. The loan has a 25-year tenor, a six-year grace period and a LIBOR-based variable interest rate. The IDB said the Ecuadorian authorities would contribute $16.5 million to this project.
The $1 billion credit line is intended to support the Ecuadorian government’s medium- and long-term strategy of expanding, upgrading and maintaining its road network infrastructure. The government is hoping to reduce transportation costs and travel time, as well as improving road safety.
In the past five years the IDB has funded $137 million of transport infrastructure projects in Ecuador, according to the bank’s website.
Ecuador is soon to begin work on the largest infrastructure project in the country’s history, a 1,500-megawatt, $2 billion hydroelectric dam on the Coca River. The project is being backed by a $1.7 billion loan from China’s Export-Import Bank, with the balance of the cost being provided by the Ecuadorian government.