Announcement of Two Million Eight Hundred Thousand US Dollars Road Loan to El Salvador on November 29, 1967

• 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 67/54 Subject: $2.8 million road loan November 29, 1967 trJ El Salvador The World Bank has approved a. loan equivalent to $2.8 million to El Salvador. -The loan will assist i1:1 financing c..ompletion of a road project which has already beP.n. financ\04 in part by a credit of $8 million from the Bank I s affiliate, the International Development Association, granted in November 1962. The project in- cludes the improvement, construction or reconstruction of seven trunk roads and four feeder roads. The First National Bank of Memphis and the Mellon National Bank and Trust •• Company, Pittsburgh· have agreed to participate in the loan for a total amount of $80,000 representing the first two matµrities which fall in October 1971 and The trunk roads involved are among the most important roads in El Salvador connecting the principal cities and ports. One of the ports to be served, Acajutla, handles not only a large part of El Salvador's foreign trade but also a considerable quantity of cargo originating in or destined for, neigh- boring countries. Improve,;i- access to the service areas of the feeder roads will stimulate agriculture by opening up internal markets and increasing oppor- tunities for exports. Two years after the IDA credit was made, it was found that tra}fic on some of the trunk highways was growing at a mqch faster rate than had been projected, and it became necessary to build them .to higher standards than had been planned • •  - 2 - At the same time the benefits from feeder roads opening up productive areas to cultivation and markets became even more apparent. Therefore, the Government • requested supplemental financing to help meet the increased costs of both the trunk roads and the feeder roads. The total ccst of the revised project is estimated at the equivalent of $20.5 million. The Bank loan of $2.8 million will cover part of the foreign exchange requirements of the work still to be undertaken. The remaining costs will be financed by the Governmeµt. The project is1 being executed by the Highway Department of the Ministry of Public Works with tl:he assistance of consultants. Four of the trunk roads in the project have been completed satisfactorily, and detailed engineering has been • finished for all the roads. All construction work will be ca1C'ried out by con- tracts let on the basis of international competitive·bidding. The project is scheduled for completion by the end of 1970. The loan will be for a term of 23 years and bear interest at the rate of 6% per annum. Amortization will begin in October 1971. •