CAF celebrates the inauguration of the Central Railroad Project in Uruguay

April 16, 2024

The financial organization was part of this initiative in both development and financing through its subsidiary, CAF-AM.

With the presence of the President of the Republic, Luis Lacalle Pou, among other governmental and departmental authorities, the Central Railway Project was inaugurated. This project is one of the country's main infrastructure works and received contributions from CAF - development bank of Latin America and the Caribbean.

"For an organization like CAF, which pursues the mission of promoting development and integration of communities through cooperation between public and private actors, the completion of this work represents a true reason for pride. We have high expectations for what will be generated by the revitalization of a mode of transport that will give new momentum to the country and is necessary both for the UPM project and for the various productive sectors that will benefit", stated Miguel Ostos, representative of the multilateral organization in Uruguay.

The Central Railway, leased through a public-private partnership contract, cost approximately USD 1.288 billion and involved the construction and maintenance of 273 kilometers of railway infrastructure in a section connecting the Port of Montevideo with Paso de los Toros. The project will allow the mobilization of more than 4 million tons of cargo, mainly cellulose produced at the second UPM plant.

In the financing that was granted to the firm in charge of the project development, Grupo Vía Central, CAF, CAF-AM, IDB, SMBC, and Allianz participated. The loan in Indexed Units granted by CAF was USD 85 million and helped to catalyze approximately USD 250 million from CAF-AM Administradora de Activos Uruguay S.A.

Among the benefits that this project brings to the country, the modernization of the central railway corridor of Uruguay, which covers 3,074 kilometers, as well as the road infrastructure, stands out. Its operation will also allow savings on freight costs in the transport of UPM cargo and savings in emissions of 40,000 teCO2/year.

Regarding employment opportunities, the project generated 3,300 direct job positions during the construction phase and will create another 100 during the operation phase. Furthermore, it is related to UPM's second pulp mill, whose operation has an impact of 2% on the country's Gross Domestic Product (GDP) and offers 19,000 jobs.