Autopistas del Nordeste C. Por. A.
MIGA has provided $107.6 million in political risk insurance for the development of a toll road in the Dominican Republic. The insurance covers a $14 million equity investment in and $162 million bond issue for Autopistas del Nordeste C. Por. A. for up to 20 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract. The investors (see guarantee holders above) are jointly providing equity for the project.
The project consists of the design, construction, operation, and maintenance of a 106 kilometer toll road that will connect Santo Domingo with the country’s northeastern peninsula. The 30-year concession—the country’s first-ever highway license—was awarded to Autopistas del Nordeste in 1999 through an international bidding process.
The project is consonant with the World Bank Group’s strategy of restoring economic growth and competitiveness in the country, given the highly positive economic impact in terms of reducing transportation costs and providing the infrastructure needed to further develop the tourist area of Samaná. The project is expected to lower transportation costs by reducing distance and travel time from 220 kilometers and four hours to 120 kilometers and 1.5 hours respectively. Progress on the toll road has already led to investments in a free trade zone that is connected by the road to the international airport of Santo Domingo. Other development impacts include growth in agribusiness, as farmers will have faster and cheaper access to markets in the capital, and tax generation estimated at $50 million over the life of the project. In addition, revenues generated by the project above a specific threshold will be paid to the government. The project is expected to create 2,465 jobs during the construction phase, and about 1,300 once operational.
MIGA’s participation in the project is aligned with several agency priorities: catalyzing private sector investment in frontier markets and scaling up support for urban infrastructure projects in developing countries.
Dominican Republic: Samana Toll Road Posted: July 7, 2005