IDB approves $480m loan to upgrade São Paulo highways

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20141

Inter-American Development Bank (IDB) approves a $480m loan as part of the State of São Paulo Highway Investment Programme to sustainably boost the competitiveness of the state’s production chains.

A major programme to upgrade approximately 470 kilometers of at least seven state highways, is set to make the infrastructure smarter, more sustainable, and more efficient in the Brazilian region of São Paulo. 

The investment will help develop a new generation of public highways to serve industry and the population. In addition, the project will optimise the way in which the supervision and management systems of the State of São Paulo Highway Department are digitalised. It will also build and certify the digital skills of the department’s employees.

This operation will benefit the main logistics chains that use the State of São Paulo’s transportation infrastructure, as well as the companies and employees of the region’s productive sector, with an estimate 2.15 million inhabitants in 44 municipalities set to benefit from the upgraded network. 

The State of São Paulo contributed 27% of Brazil’s GDP in 2021, and its economy grew by 5.7%, which is higher than the national average. Most goods produced in the State of São Paulo are transported by road (84%) in around 290,000 trucks per day. Of these, 77.8% go to destinations within the state, 19.5% are for trade with other states in Brazil, and 2.7% cross the state en route to another.

The programme will reduce transportation costs and travel times for many agricultural chains in the central-northern zone of the state, as well as for industrial chains in São Paulo’s southern and coastal areas. By improving road quality in vulnerable areas, a crucial step will be taken towards boosting the competitiveness of regional production chains and achieving greater social inclusion by giving marginalised populations better access to services and jobs.

The financing will be provided in the form of a loan with a six-year grace period and an interest rate based on the Secured Overnight Financing Rate (SOFR).