The Japan Bank for International Cooperation (JBIC) has signed an ODA loan agreement totalling up to ¥7.357bn (US$62.8mn) with Guatemala to finance the Zonapaz Road Improvement Project.

The loan will finance the rehabilitation of national highway RN-7 East, which cuts across the Zonapaz region, an area devastated by the 1960-96 internal conflict. It will also finance an access road to Senahu. The project aims to facilitate transport in the region, invigorate the regional economy and to contribute to poverty reduction. It will improve the living conditions of the region’s residents by providing them with greater access to education and healthcare public services and agricultural and labour markets.

As a result of the 36-year internal conflict, underdeveloped roads are commonplace in Guatemala – only 17% of roads in the country are paved.  Recovery and development is particularly lagging in Zonapaz, which was a rebel stronghold during the civil war period. National highway RN-7 East is unpaved and traffic interruption is particularly problematic in the rainy season.

Under the Puebla Panama Plan, national highway RN-7 was designated a priority road in need of development for the promotion of Central American integration. The highway is expected to supplement the distribution route that runs across Guatemala and further extends to neighbouring Honduras and Belize. JBIC is supporting the rehabilitation of national highway RN-7 West through the provision of an ODA loan.