IDB Invest, the private-sector arm of the Inter-American Development Bank (IDB), has provided a new $US 250m financing package for the Central Railway project in Uruguay to improve connectivity and integration of the interior of the country with its capital, Montevideo.
The project includes the construction, rehabilitation and maintenance of 273km of railway between Montevideo and Paso de Los Toros. The financing package is the largest B-bond structured by IDB Invest to date, with the proceeds to be used to refinance existing debt, improving the project’s overall financing terms and conditions.
IDB Invest is facilitating the mobilisation of capital market solutions through the B-bond, unlocking financing from international institutional investors, while supporting Uruguay’s goal of attracting direct foreign investment and channelling new resources to support infrastructure projects.
“Investing in large-scale, sustainable infrastructure projects can have a transformative impact for the future of our region,” says Ms Gema Sacristan, IDB Invest’s chief investment officer. “At IDB Invest, we continue to innovate to mobilise financing and attract new investors to Latin America and the Caribbean.”
This new facility follows a previous financial package provided by IDB Invest in 2019 for approximately $US 536m, consisting of a $US 300m loan from IDB Invest with the remainder mobilised from commercial banks and investors.
The project is being executed through a public-private partnership (PPP) contract between the Ministry of Transport and Public Works of Uruguay, and Grupo Vía Central, a special purpose company created to execute the project.
The government of Uruguay announced in April 2021 that the deadline for the project had been extended from September 2022 to May 2023 after experiencing delays with land expropriation and errors in the estimates of soil movements. Around four times more land was required than planned, which meant that the line was only 30.6% complete at the end of 2020 compared with the objective of 50.6%.
Ground was broken on the project in May 2019. The line will be double track for the first 26km from Montevideo and single track thereafter with 12 passing loops. The infrastructure will accommodate 22.5-tonne axleloads and a maximum line speed of 80km/h for freight trains. The line will also be used by passenger trains between Montevideo and 25 de Agosto and will be equipped with ERTMS Level 1.
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