IDB Invest, member of the Inter-American Development Bank (IDB) Group, approves a financial package of approximately $500 million for the construction, rehabilitation and maintenance of 273 km of rail lines between the cities of Montevideo and Paso de Los Toros, in Uruguay. The project will be executed through a public-private participation contract between the Ministry of Transport and Public Works of Uruguay and a special purpose company created with this purpose: Grupo Vía Central S.A.
This railway project aims to improve the connectivity and integration of the interior regions of Uruguay with its capital, Montevideo. The objective is to generate a positive impact on the productivity of the Uruguayan export companies, given that the main traffic of the railroad will come from the transport of cargo from the interior of the country to the port of Montevideo, for its export. It would also serve as a means of transport for the UPM pulp mill, should this investment be carried out. In this sense, it is expected that this new infrastructure will contribute to mobilize this and other new investments of the productive private sector, which are currently evaluating investing in the country.
The financial package approved by IDB Invest has a term of up to 17 years and consists of a senior loan of up to $440 million and a subordinated loan of up to $60 million, financed by IDB Invest and a group of commercial banks and international investors.
The use of the funds will allow the construction of the road itself, as well as the installation of a comprehensive signaling system with the latest technology, the construction of 66 new bridges, two overpasses with trenches, sewers and other drainage structures. It also includes the construction and equipping of 264 level crossings, which will improve road safety, especially in suburban and urban areas. In addition, it will provide an interconnection for three additional existing rail lines.
The implementation of the Central Railroad line is part of the infrastructure plan of the government of Uruguay, which includes Public-Private Partnership (PPP) initiatives in transport and education. The government's objective is to consolidate the promotion of the freight railroad.
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 Grupo Vía Central S.A.
Grupo Vía Central is a special purpose company established solely for the purposes of the construction, rehabilitation and maintenance of 273 km of railway lines between the cities of Montevideo and Paso de Los Toros. Its shareholders, which are detailed below, are well-known companies internationally and in Uruguay. SACYR: Spanish company with international experience in the areas of construction, infrastructure concessions, industrial and services. In Uruguay it is, together with SACEEM, the company that is executing, under PPP contract, the works of national routes 21 and 24. NGE: French company with special dedication in the execution of public works and important experience in concessions. SACEEM: is one of the largest construction and engineering companies in Uruguay, with 67 years of activity in the country and involved in the main infrastructure, energy, industrial and public works projects in the country. BERKES: with more than 75 years of experience, it is considered one of the leading engineering and construction companies in Uruguay.