IDB Invest, a member of the Inter-American Development Bank (IDB) Group, granted a $200 million financial package to Concesionario Rutas del Este, comprised of companies Sacyr Concesiones, Ocho A S.A. and Compañía Sudamericana de Empresas Eléctricas, Mecánicas y de Obras Públicas S.A. The project will contribute to improving the level of services and road safety in one of the main corridors of Paraguay, which is of key importance for the country’s economic activity.
IDB Invest’s participation has been essential for the issuance of a $458 million bond with a tenor of 17 years, made by Concesionario Rutas del Este. IDB Invest’s financing of up to $200 million consists of a guarantee for the construction risk associated with the use of the ADDITIONAL? resources, and a loan of repayment duration and source equal to that of the bond.
The common of the guarantee and loan allows Concesionario Rutas del Este to use the resources of the bond issuance from day one, making the operation more efficient. The project is the first public-private partnership (PPP) contract signed under the Paraguayan PPP Law, which seeks to attract foreign direct investment to the country.
The project will double the lanes of routes 2 and 7 along 140 kilometers, which constitutes 80 percent of the road. This improvement will reduce vehicle congestion and save travel time between Asunción and Ciudad del Este, the largest cities and economic centers in the country. Improving road quality will also reduce transportation operating costs and the probability of accidents, improving safety for users.
This operation potentially contributes to three of the United Nations Sustainable Development Goals: Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), and Partnerships to Achieve the Objectives (SDG 17).
The financial structure promoted by IDB Invest in this project reinforces the development of Paraguay's capital markets by mobilizing international investors for financing, and serves as a replicable model for other infrastructure and energy capital markets in Latin America and the Caribbean.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a portfolio of assets of $12.1 billion under management and 329 clients in 21 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the needs of its clients
About Rutas del Este S.A.
Rutas del Este is a special purpose vehicle created under Paraguayan law as a corporation to undertake the design, financing, construction, maintenance and operation of the Routes 2 and 7 project. Rutas del Este started operations in 2017 with the activities of Tranche 0.