Honduras to revamp key roadway with assistance from the IDB

IDB press release:

$50 million credit line to help improve Tegucigalpa-Puerto Castilla agricultural corridor

The Inter-American Development Bank approved a $50 million credit line to help Honduras improve a road linking the capital Tegucigalpa with Puerto Castilla on the Atlantic Coast, an area known as the country’s agricultural corridor.

The program's goal is to improve freight and passenger transportation conditions by reducing operating costs and travel times and strengthening regional integration within the country through better road accessibility.

The agricultural corridor links the departments of Francisco de Morazán, Olancho, and Colón. In addition, it will be integrated into the tourism corridor composed of the localities of El Progreso, Tela, Ceiba, Sabá, Tocoa and Puerto Castilla.

Together, agriculture and tourism will strengthen socioeconomic and cultural development in rural areas, raising the quality of life and income levels, which will contribute directly to poverty reduction.

The program includes paving, repair and maintenance work on a 180-kilometer segment between Gualaco and Puerto Castilla, including rehabilitation of bridges and road safety improvement. Routine maintenance will be carried out by microenterprises involving members of the area's Pech indigenous community.

The Bank's credit line consists of $35 million from its ordinary capital and $15 million from its concessional Fund for Special Operations (FSO). The US$35 million tranche is for a 30-year term, with a 5-1/2-year grace period, and carries a variable interest rate. The FSO component is for a 40-year term with 40 years grace period and a 0.25 percent interest rate.

The expected total cost of the program is $77 million, of which the Organization of Petroleum Exporting Countries' Fund for International Development will provide $25 million and the government $2 million in local counterpart funding.


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