Tegucigalpa Risk Share

completed

The proposed investment is a risk-sharing of a loan to be provided by a syndicate of local banks to the Alcaldía Municipal del Distrito Central (AMDC or the Municipality) of Tegucigalpa/Comayaguela for investments in urban transport infrastructure and refinancing of a short term bridge loan. The loan size will be up to Lempiras (HNL) 1 billion (approximately US$53 million), and the risk share would cover up to 50% of the loan, with a maximum exposure of US$15 million (approximately HNL 300 million). The proceeds of the loan would be used finance investments for: (i) road capacity improvements; (ii) road network conservation; and (iii) community services. Capacity improvements include at-grade and grade-separated junction improvements and upgrading of the traffic signaling system. Network conservation includes maintenance and rehabilitation of the main road network and associated infrastructure. The community services component includes a range of small interventions to improve access for the poor and to reduce the risk to life from flooding. It will provide sidewalks in the historic district, improved access to neighborhoods and poor communities through partnering where the municipality provides road construction materials and the communities contribute their labor. It will also finance an early warning system against flooding. The works in the project are a key part of the current municipal government’s infrastructure development plan and reflect the objectives of Plan 450, the Central District development strategy for 2010-2028.