World Bank approves US$ 80m loan to improve transportation in Belo Horizonte

The project brings together investments in the overall urban upgrading of a low-income informal neighborhood Vila Cabana do Pai Tomás.

The World Bank Board of Directors approved today a US$ 80 million loan for Improving Mobility and Urban Inclusion in the Amazonas Corridor in Belo Horizonte Municipality.

The project brings together investments in the overall urban upgrading of a low-income informal neighborhood Vila Cabana do Pai Tomás. It will also support the implementation of a mass transit system (the Amazonas Express bus corridor), including new stations and bus stops, restoration of sidewalks and equipment and technology to support the bus corridor operation.

Beneficiaries include 815,000 users of the Amazonas Express and about 20,000 low-income residents of Vila Cabana do Pai Tomás. Indirect beneficiaries from this project will include the 5.9 million residents of Metropolitan Belo Horizonte, who will benefit from reduced congestion, pollution, and traffic accidents in the Amazonas Express, a corridor that transports the largest number of commuters in the city.

Belo Horizonte has expanded outward with a significant increase in informal settlements due to economic and population growth. As a result, close to 20 percent of the population of the Minas Gerais State capital live in informal settlements. Many slums (favelas) suffer from poor housing and sanitation infrastructure, and a lack of access to urban amenities and formal jobs due to their inadequate integration with the transport network.

Low-income women are particularly affected by the quality of the transport network, as they have lower access to cars and motorbikes and depend on public transportation even more than men when commuting. Data shows that 44 percent of their trips are made in public transportation compared to 27 percent of men's trips.

The poor areas are also vulnerable to climatic hazards such as floods, landslides, and dengue fever. Given that these events also impact travel time, it is expected that the implementation of the Expresso Amazonas will mitigate the economic impact of extreme climate events.

"Improving the transport network system is crucial to provide these communities the opportunity of getting better jobs and increasing family income. It will also allow women to have better access to the job market fostering economic development for the whole municipality," said Paloma Anós Casero, World Bank Director for Brazil.

Among the outcomes supported by the Project are:

Improved quality of service for public transport users in the area of influence of the Amazonas Express.

Improved accessibility of low-income households to job opportunities and urban amenities in the Municipality of Belo Horizonte.

Improved urban living conditions of the poor in selected precarious settlements of Belo Horizonte, namely Vila Cabana do Pai Tomás and Jatobá Region.

This one tranche loan from the International Bank for Reconstruction and Development (IBRD) to the Municipality of Belo Horizonte is guaranteed by the Federative Republic of Brazil and has a final maturity of 24 years, including the 5-year grace period.