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IDB Invest: Central Railroad Launches and Will Boost the Uruguayan Economy


MONTEVIDEO – IDB Invest participated in the launch of the Central Railroad Line Project in an event that took place today at Cardal Florida Station, Uruguay, with the participation of the President of the Republic Luis Lacalle Pou, the Minister of Transportation and Public Works, José Luis Falero, and the Undersecretary, Juan José Olaizola.


IDB Invest led the financial structuring that mobilized local and international investors for a total amount of approximately $790 million, to contribute to improving the connectivity and integration of the interior regions of Uruguay with its capital, Montevideo.


The project is an example of how IDB Invest, through its “originate-to-share” strategy, has managed to mobilize the market of international and national institutional investors to carry out a project that will have a positive impact on its population and on Uruguay’s economic development.


The Central Railway will boost the productivity of Uruguayan export companies, including the new UPM pulp mill, since the railway's main traffic will come from transporting cargo from the interior of the country to the port of Montevideo for export.


The project was structured through a public-private participation contract between the Ministry of Transportation and Public Works of Uruguay and Grupo Vía Central S.A, comprised of the Spanish company Sacyr, the French company NGE and the Uruguayan companies SACEEM and Berkes, and consisted of several financing stages.


To carry it out, IDB Invest provided a $300 million loan in 2019 and mobilized two international commercial banks (Intesa and SMBC) with an additional loan of $161 million. The original financing of the project, carried out in dollars and local currency, was completed with funds provided by CAF-Development Bank of Latin America and the Caribbean, which participated with $85 million, and CAF-AM Administrator of Assets of Uruguay, which contributed the equivalent in local currency of approximately $312 million.


Likewise, in 2020 the original financial plan was completed with a subordinated loan from IDB Invest for $75 million, the first of its kind in the history of public-private partnerships (PPPs) in the country. This included the mobilization of funds from Global Infrastructure Partners.


Subsequently, in 2022, once the work presented a significant degree of progress, IDB Invest structured additional financing for $250 million through a B-Bond, IDB Invest's trademark capital market structure, which constituted the largest investment made by a single institutional investor in the history of the institution and the country. Its purpose was to provide the necessary updated capital investment to optimize the initial debt structure, providing the construction risk tolerance required at project closure and leaving room to adapt the new financing to the general financing terms and conditions of the company and the concession contract.


The IDB Group's contribution of funds to the project was unique in terms of the combination of instruments throughout the construction period and never before fully applied in other PPP projects in Uruguay.


The agreement is expected to contribute to four of the United Nations Sustainable Development Goals: Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Responsible Production and Consumption (SDG 12) and Partnerships for the Goals (SDG 17).


About IDB Invest

IDB Invest, a member of the Inter-American Development Bank Group, is a multilateral development bank committed to promoting the social and economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $21d billion in assets under management and 394 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.


About Grupo Vía Central S.A.

Grupo Vía Central is a special purpose company established solely for the purpose of the construction, rehabilitation and maintenance of 273 km of railway tracks between the cities of Montevideo and Paso de Los Toros. Its shareholders, detailed below, are companies of recognized international prestige and in Uruguay. SACYR: Spanish multinational concessions and infrastructure group committed to innovation and sustainability. In Uruguay, it is, together with SACEEM, the company that has executed, under a PPP contract, the works on national routes 21 and 24. NGE: French public works and global civil engineering company, diversified and with extensive experience in PPP and concessions SACEEM: one of the largest construction and engineering companies in Uruguay, with more than 70 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 85 years of experience, the company has developed projects in 25 countries around the world and is considered one of the main engineering and construction companies in Uruguay.