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Argentina opening yields possible $1.5bn tunnel auction

The Paso de Agua Negra International Tunnel, whose tender is backed by IDB, could help boost trade between Argentina and Chile.

The Inter-American Development Bank has provided a $40 million loan to start the bidding process for a road tunnel that will connect Argentina and Chile.

The loan is granted through a structure programme that will finance the preparation of the Paso de Agua Negra International Tunnel. IDB’s loan will assist development agencies for both countries and will provide legal, technical and environmental consulting.

This loan is the first support IDB has provided to the project, which is estimated to cost $1.5 billion over eight or nine years. The bank said bidding would begin next year for development rights to construct the tunnel.

The current road is located close to 5,000 metres above sea and is closed between May and October because of snow. IDB noted that the tunnel, which will connect Argentina’s San Juan province to Chile’s Coquimbo, is key to improving trade integration between the two countries and throughout the region.

“The new tunnel project is part of efforts by both countries to develop regional integration strategies in order to plan and connect their infrastructure,” IDB said. “The main goal of these efforts is to strengthen and facilitate trade flows between the two countries, thus contributing to regional economic growth.”