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Brazil: US$ 300 million for Improved Competitiveness and Efficiency of Road Network in Mato Grosso do Sul

May 4, 2010

WASHINGTON, May 4, 2010 – The World Bank Board of Executive Director approved today a US$ 300 million loan for the Mato Grosso do Sul State Road Transport Project in Brazil’s fast growing Center-West region. The project seeks to improve the efficiency of the State road network through rehabilitation and surfacing of about 1,200 km of paved roads, contributing to improved population mobility and increased economic competitiveness of the State.

“These resources will contribute to foster the sustainable development of Mato Grosso do Sul. We are grateful for the commitment, readiness and sensitivity that guided the World Bank’s team. Today, the State is starting to see the realization of its goals and entering a new era of accomplishments,” said André Puccinelli, Governor of Mato Grosso do Sul.

Located in the southern portion of the Brazil’s fast growing Center-West region, Mato Grosso do Sul is one of Brazil’s main agro-industrial centers. The State is strategically located at the crossroads of international and national production corridors in South America. Trade flows crossing it connect the Center-West region and the industrial Southeastern region with existing corridors to Bolivia and Paraguay, making the State a gateway between the Atlantic and Pacific coasts.

The State has a diversified transport matrix compared to the rest of the country, including rail, road, air transport and pipelines. However, the full use of its multi-modal transport potential has been hampered by the low density and deteriorating conditions of the road network, resulting in logistic bottlenecks and low access to the population, especially in the rainy season.

The Mato Grosso do Sul State Transport Road Project will contribute to foster economic growth and improve the State’s competitiveness, while reducing regional inequalities by improving the connectivity between the lesser and more economic developed areas of the State.

”Mato Grosso do Sul is emerging as a dynamic economic force in Brazil. By contributing to improving transport conditions, the Project will support the State in realizing its economic potential in a sustainable manner, including improved access to services, jobs and markets,” said Makhtar Diop, World Bank Director for Brazil.

Due to its location at the transition between the Cerrado and Pantanal biomes, Mato Grosso do Sul also shelters exceptional environmental assets: 25% of the State territory is covered by areas of environmental interest, including part of the Pantanal, one of the world’s largest tropical wetlands. The State is also home to the second largest indigenous population in Brazil, after the State of Amazonas.

"The Mato Grosso do Sul State Road Transport Project will directly benefit the population, mainly those living in more remote areas, by improving accessibility and safety. Works under the Project focus regions that possess economic potential and are located outside of any ecologically and socially fragile areas," said Eric Lancelot, World Bank Project Manager.

The project’s goals will be achieved by the following actions:

State Road Rehabilitation and Surfacing – rehabilitation of about 750 km and surfacing of nearly 450 km of State roads, including feeder roads, to improve connections between cities and regions located in the northeast and southern parts of the State. The first set of works will include rehabilitation of the following highways: MS-141, MS-145, MS-306, MS-377 and MS-276. The first surfacing works will include highways MS-436, MS-306, MS-112 and MS-274.

Institutional Strengthening to the State Administration – provision of equipment, consulting and non-consulting services and training to improve the management of public resources by the Environment, Science, Technology and Planning Secretariat (SEMAC); strengthening the Environmental Institute (IMASUL) environment management capacity; consolidate planning capacity in the transport sector; and consolidate the execution capacity in the road sector.

This is a US$ 300 million, US$ denominated IBRD Flexible Loan (IFL) with variable spread option, commitment-linked with all the conversion options, repayable in 25 years, including a 10 years grace period and level repayment schedule.

Media Contacts
In Brasília
Denise Marinho
Tel : (+55 61) 3329-1099
In Washington
Gabriela Aguilar
Tel : (+1 202) 473-6768