IDB loan for Brazil's Minas Gerais road network

The Inter-American Development Bank is to loan the Brazilian State of Minas Gerais US$ 137 million to help improve its transport infrastructure and logistics in an effort to boost competitiveness and accelerate development.

With more than-24% of all roads in the state classified as being in a "poor condition" the loan will be used to rehabilitate, upgrade and maintain existing roads, the paving of access roads to small municipalities, and road safety measures across four areas of activity:

• Proacesso, a program to expand the access of municipalities with low human development indicators to the federal and state highway systems, by paving access roads;
• PROMG, a program to rehabilitate and maintain existing paved roads;
• PROSEG, a program to increase the capacity and safety of principal transport corridors; and
• a program of institutional strengthening aimed at optimizing urban mobility in the Belo Horizonte Metropolitan Area.

The IDB and state government's aim is to strengthen infrastructure, transport and logistics networks boosting the state's economic activity and competitiveness.

Following the program the number of municipalities with paved access roads is expected to increase from 86.2% to 93%, and the percentage of Minas Gerais' paved roads that are covered by a results-based rehabilitation and maintenance contracts is expected to rise from 31% to 42%.

Minas Gerais' location means its road network integrates Brazil's southern and south-eastern regions with its northern and centre-north regions, playing a strategic role in the nation's overall productive infrastructure.

As a result, the program is also expected to enhance the competitiveness of industries outside Minas Gerais.

The IDB loan is for 25 years, with a one year grace period and an interest rate based on LIBOR.