World Bank/Uruguay: Roads in Uruguay Made Safer and More Resilient to Climate Change Impacts

March 27, 2017

WASHINGTON, March 27, 2017 – Over the next three years, Uruguay will rehabilitate 890 kilometers of roads and will improve an additional 260 kilometers to reduce traffic accidents, in part thanks to a US$ 70 million loan approved by the World Bank Board of Directors last Friday. The new operation uses a Program-for-Results (PforR) financing instrument, which links disbursement of loans directly to the achievement of specific program results.

The loan will provide additional financing for the National Road Rehabilitation and Maintenance Program, which continues to support Uruguay’s transportation sector in maintaining and rehabilitating paths, roads and bridges. It also incorporates activities to promote road safety and mitigate climate change impacts on the country’s infrastructure.

According to Uruguay’s National Road Safety Agency, in 2015, 506 people died in traffic accidents. Of those deaths, 37.5 percent occurred on national roads. Additionally, the frequency of violent weather events affecting the country in recent years, including severe storms, tornados and floods, has had consequences and demonstrated the high vulnerability of the road infrastructure.

Since 2012, the National Road Rehabilitation and Maintenance Program has rehabilitated more than 500 kilometers of roads, including bridges and drainage systems. The Ministry of Transportation and Public Works and the Uruguayan Road Corporation implemented the program, with support from international development agencies.

With the additional financing, the World Bank will continue to support Uruguay’s efforts to rehabilitate 890 kilometers of national roads, incorporate improved road safety standards to enable the modernization of 260 kilometers of roads, as well as to provide annual maintenance to 3,000 kilometers of the country’s road network. Additionally, the program will strengthen planning and quality control systems of roadworks, as well as fiduciary systems and procedures for climate change mitigation and resilience for the road network.

Roads in good condition that are safer and more resilient to climate change impacts are crucial for the competitiveness of the Uruguayan economy, its exports, the country’s integration in international value chains and the sustainable jobs this infrastructure generates for Uruguayans,” said Jesko Hentschel, World Bank Director for Argentina, Paraguay and Uruguay.

In 2012, Uruguay became the first Latin American country to use the World Bank PforR financing tool, which links the disbursement of funds directly to the achievement of defined results. In other words, the money is delivered when the results have been achieved and verified. The other key characteristic of this instrument is its emphasis on the institutional strengthening of implementing agencies, making their production processes and systems more efficient.

The US$ 70 million World Bank financing is a variable spread loan. The maturity period is 17.5 years, with a five-year grace period.

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2017/ 194/ LAC