On November 11, 2014, MIGA issued a guarantee of $361 million to Banco Santander S.A. of Spain, covering its non-shareholder loan to the State of São Paulo for the São Paulo Sustainable Transport project. MIGA’s coverage is for a period of up to 12 years against the risk of non-honoring of sovereign financial obligations.
The project consists of investments by the State of São Paulo in sustainable transportation infrastructure and related activities. The total project is being financed with a $300-million World Bank loan, $129 million from the State of São Paulo’s own funds, and the financing from Banco Santander.
The financing covered by the MIGA guarantee will support the rehabilitation of about 800 kilometers of roads selected for their proximity and connectivity to inland waterway and railways, reconstruction of two bridges to enhance the navigability of the Tiete inland waterway corridor complex, and other works to improve road safety. The objective of the project is to improve the state’s transport and logistics efficiency and safety while enhancing its capacity in environmental and disaster risk management.
The State of São Paulo’s current transport and logistics capacity is insufficient to match the state’s current and future needs and is recognized as a bottleneck for regional and national logistics. The project will improve efficiency and safety while lowering the carbon footprint of moving goods and people in the state.
Due to increased mobility, indirect benefits will accrue through increased employment and wages across a wider geographical area. As a result, the project will help reduce disparities across the state and foster a more balanced distribution of its development growth.
The project is aligned with the World Bank Group’s Country Partnership Strategy for Brazil as it promotes regional economic development through improved infrastructure investments and enhances climatic resilience.
MIGA’s participation in the project is also aligned with the agency’s commitment to supporting transformational projects and projects in middle-income countries where MIGA can have strong impact.