The European Investment Bank (EIB) is providing USD 50 million to the Republic of Panama for the construction of the second bridge over the Panama Canal Puente del Centenario.
Ms Isabel Martín Castellá, Vice-president of the European Investment Bank, and Mr Norberto Delgado Durán, Minister for Economics and Finance, signed the loan contract on the occasion of the Annual Meeting of the Inter-American Development Bank in Lima (Peru).
The project foresees the construction of a 1.1 km bridge over the canal and the connecting infrastructure within the metropolitan area of Panama City. This includes an Eastern motorway between Panama City and the new bridge and a Western motorway between the bridge and the existing Arraiján - La Chorrera motorway. It will open a new transport corridor providing better connection to the Pan-American Highway as well as facilitating the flow of freight traffic in Panama and in Central American Countries.
The second bridge will help to reduce traffic congestion and improve safety in Panama City. It will significantly take off traffic from the existing bridge Puente de las Americas, which has reached its capacity limits. Benefits will accrue from time and vehicle operating cost savings. The project will also help to reduce emissions and noise levels. Completion for the bridge is expected for the second half of 2004, while full completion for the connecting motorways will probably be in early 2005. The 20-year EIB loan benefits from a 5-year grace period, it will cover more than 20% of the cost and is guaranteed by the budget of the European Union.
The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration. In the period 1993-2003, the Bank has lent EUR 3.0 billion under the ALA mandates, with 80 loans, in more than 20 countries. EUR 1 billion is still available. The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, Russia, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.
In 2003, the EIB provided loans totalling some EUR 42 billion. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. The EIB can pass on to project promoters the excellent conditions it obtains on the markets. The EIB may finance up to 50 percent of project cost. On average it provides one third of the funding and co-finances investments with other institutions.