IDB grants Nicaragua US$39mn transport system loan

IDB has granted a US$39.2mn loan to Nicaragua aimed at improving the efficiency and safety of the nation's transportation system. Funding will finance road maintenance, institution building, transportation studies and improved safety measures, IDB said in a press release. Nicaragua's transportation system is characterized by the poor conditions of its paved and unpaved roads. Only 3,151km (13.3%) of the nation's 23,647km roads are paved. Some 437,000 vehicles travel over this road network, carrying more than 13Mt/y of freight, of which more than 38% is foreign trade cargo. "The competitiveness of Nicaragua's industry, agriculture and commerce depends on the effectiveness and efficiency of the transport system," IDB project leader Alfonso Salazar said. "Road transport is indispensable for the integration of the productive regions to the national economy and the main link between productive sectors and export markets," he added. The financing consists of a US$19.6mn loan with an amortization and grace period of 40 years and a 0.25% interest rate. The second US$19.6mn, 30-year term loan has a five and a half year grace period and a Libor based interest rate. This is one of three loans to Nicaragua as part of the Transport Sector Support Program, which estimates a total investment of US$75mn from the IDB, the press release said.