The Inter-American Development Bank (IADB) has approved a US$50mn soft loan for a project to improve key sections of the main Honduran highway on Plan Puebla Panama’s Atlantic Corridor and increase road safety in Honduras.
The project, which will be carried out by the Ministry of Public Works, Transport and Housing (SOPTRAVI), supports the Honduran government’s plans to foster investments in and the maintenance of the country’s road system.
The project will involve investments in highway CA-5 Norte, which links the Honduran capital, Tegucigalpa, with San Pedro Sula, the country’s main industrial hub, and Puerto Cortes, a deep-water port on the Caribbean coast.
The highway, which was built in the 1960s, needs significant improvements. Under the project, road resurfacing and widening work will be carried out on a 24.7 km section in the Comayagua Valley and a 25.5km section between Villanueva and La Barca.
The project will also support the design and implementation of a road safety program for Honduras “Plan Puebla Panama highways. According to some estimates, some 7,000 traffic accidents occur every year in this country, killing around 700 people. The project will finance investments in signage, pedestrian crossings, lighting at intersections and protective barriers.
The project also has a social and environmental management plan to avoid, mitigate or compensate for possible direct and indirect impacts resulting from the construction, operation or maintenance identified in social and environmental impact studies. A consultation and information process was conducted in communities where work will be done.
As part of its strategy in Honduras the IADB, which has coordinated with other agencies involved in projects to improve CA-5 Norte, supports economic development and competitiveness. In the transport sector, it is also financing the repairs of roads damaged by Hurricane Mitch and a project to strengthen Soptravi.
The new loan is for a 40-year term, with a 10-year grace period. Interest rates will be 1% a year during the first decade and 2% a year thereafter. Local counterpart funds will total US$6.2mn. The project could also receive a US$7mn in cofinancing from the Opec Fund.
The project also reflects the IADB’s support for Plan Puebla Panama, a regional integration programme supported by Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama.
The plan includes projects for regional cooperation in transport, energy, telecommunications, human development, sustainable development, alternative tourism, prevention of natural disasters and trade facilitation.
Among its chief goals are increasing the region’s competitiveness and to deepen integration among participating countries. The plan’s transport projects seek to improve highway conditions and reduce operation costs for cargo and passenger transportation as well as accident levels.