IDB Approves $200m Loan for Paraguay’s Bi-oceanic Corridor

The project forms part of the IDB’s South Connection program, aimed at enhancing regional integration, competitiveness, and sustainable growth across South America.

The Inter-American Development Bank (IDB) has approved a $200 million loan to finance construction of a key section of Paraguay’s Bi-oceanic Corridor, a strategic infrastructure project designed to strengthen regional trade and connectivity across South America.

The investment will support transport improvements in western Paraguay, expand access to markets and essential services, and stimulate international trade along one of the continent’s most ambitious logistics routes.

Linking the Atlantic and Pacific

Stretching more than 2,300 miles, the Bi-oceanic Corridor connects the Atlantic and Pacific oceans via a continuous overland route. It traverses:

• Central-eastern Brazil

• Western Paraguay

• Northern Argentina

• Northern Chile

The route connects to major Chilean Pacific ports including Antofagasta, Iquique, and Mejillones, offering landlocked Paraguay improved access to global markets.

The project forms part of the IDB’s South Connection program, aimed at enhancing regional integration, competitiveness, and sustainable growth across South America.

Key Highway Investments in Paraguay

In Paraguay, the corridor follows the 325-mile National Highway PY15, linking:

• Carmelo Peralta (Brazilian border)

• Pozo Hondo (Argentine border)

The IDB loan will finance:

• 63.7 miles of Segment II of PY15

• 5 miles of access road to Mariscal Estigarribia

• Improvements to 17 miles of eastern route access to Loma Plata’s industrial zone

These upgrades are expected to significantly improve freight efficiency and reduce transport times for agricultural and industrial producers.

Boost for Agriculture and Local Economies

The project will directly benefit the departments of Alto Paraguay and Boquerón, key agricultural areas in the country.

More than 7,000 primary sector producers, responsible for a significant share of Paraguay’s agricultural output, are expected to gain improved access to logistics networks and export routes.

By enhancing connectivity, the corridor is expected to lower transport costs and increase trade competitiveness.

Expanding Access to Health and Education

Beyond trade, the project includes social infrastructure benefits.

• Approximately 28,700 people, including 1,700 from Indigenous communities, will gain improved access to hospital services.

• Access to secondary education will improve for an estimated 99 towns, including 23 Indigenous communities.

Improved road access is expected to reduce travel times and enhance service delivery in remote areas of western Paraguay.

Financing Terms

The $200 million sovereign loan carries:

• A 22.5-year repayment term

• An 8-year grace period

• An interest rate based on the Secured Overnight Financing Rate (SOFR)

Strengthening South America’s Trade Backbone

By advancing construction of this strategic corridor, the IDB aims to strengthen South America’s trade backbone, integrate landlocked regions into global supply chains, and foster inclusive economic growth.

The Bi-oceanic Corridor is widely seen as a transformative infrastructure project with the potential to reshape trade patterns across the continent.