Nicaraguan authorities and the Nordic Development Fund (NDF) have signed the contract for a €12mn loan for a roads project in northwestern Nicaragua that includes key corridors for Plan Puebla Panama.
The IADB is providing a US$40mn soft loan for the project, which is part of a national roads programme to boost competitiveness. The Nicaraguan government has identified four priority regions where investments in basic infrastructure are most likely to boost output and generate jobs.
The closely coordinated participation of the IADB and the NDF – as that of other foreign agencies financing road improvements in the remaining three priority regions – will also simplify the Nicaraguan government’s project management efforts.
Nicaragua’s transport and infrastructure ministry will carry out the project, with assistance from the recently created Roads Maintenance Fund. A road network in the department of Chinandega and the connection to the port of Corinto will be improved, paved and maintained. The project area has significant potential for farming and shrimp production, as well as for tourism.
Under the project, nearly 90km of paved roads will be improved, about 70km of dirt roads will be paved and some 292km of the network will be periodically maintained in order to extend the useful life of the infrastructure and cut transport costs, which are still an obstacle to competitiveness for Nicaragua.
One of the project’s innovations is that a portion of the local counterpart funds, which will total US$11.9mn, will be used to finance road maintenance once the improvement and paving work is done.
The project does not include new road construction. A social and environmental assessment identified and analyzed potential direct and indirect impacts, leading to the design of mitigation plans. An outreach campaign was carried out to inform the area’s communities about the project’s activities and invite citizens to participate in and control its different phases.
Plan Puebla Panama is a joint effort by Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama to promote integration and sustainable development in the Mesoamerican region. One of its programs is a 9,000km network of highways to improve transportation among the eight participating countries and with other regions.