The Province of Cordoba is the 2nd most populated out of Argentina’s 23 provinces. It has an estimated population of 3.6 million inhabitants (8.2% of the total in Argentina) as of 2016, of which 40% live in its capital.  

The Province’s 2016-2019 road infrastructure development program amounts to approximately US$2 billion. IFC’s investment will be in the form of a US$300 million senior loan, composed by an IFC A Loan of up to US$150 million and a B Loan for the remaining US$150 million. IFC’s investment will be committed in two tranches to finance a multi-year investment program and accommodate to its implementation schedule.

 

150.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	150.0
Equity

* These investment figures are indicative

The Province of Cordoba is located in the center of the country. Neighboring provinces are (clockwise from the north): Santiago del Estero, Santa Fe, Buenos Aires, La Pampa, San Luis, La Rioja and Catamarca. All investments will be implemented in the Capital City of Cordoba and the Alpa Corral region.

1. Contribution to Improved Productivity and Integration: The Project will allow for decreased travel time, transportation costs and traffic congestion thereby contributing to higher productivity and economic growth. The investments will enhance transportation efficiency within the metropolitan area and also within the Province. 2. Contribution to Social Inclusion: Urban poor and other vulnerable groups tend to live in the outer parts of the metropolitan area the Province's capital. Enhanced connectivity with the main centers provide these groups with better access to jobs and may allow the areas where they live to be better incorporated in the Province's economy. 3. Environmental Sustainability: By alleviating congestion in the roads network, the Project is expected to lead to significant fuel savings and CO2 emission reduction, thereby contributing to reduction in air pollution, a key health hazard. 4. Improved Safety: Currently traffic in unfinished portions of the ring road flows through narrow streets with limited visibility and multiple intersections. Once the investment is completed, commuters, pedestrians, and inter-municipal traffic will flow through express lanes with fewer intersections and safe pedestrian crossings. This will result in improved safety and reduced travel time. 5. Job creation and local linkages: The Project will create direct jobs opportunities during construction stages. It is also expected to increase business opportunities to local contractors and support significant indirect jobs in the supply chain.

1. Funding Source Diversification: IFC will provide long-term financing in the proposed transaction, that will help the Province diversify its funding sources and not rely heavily on financing from international bond markets, given that access to the latter is not certain and depends on investors' perception of local and international economic contexts. In addition, IFC will be able to provide a flexible financing structure, allowing it to match its investment needs for the next 2-3 years with the disbursement of the facility. 2. Countercyclical Role: The need for large infrastructure investments far exceeds financial capacity of many growing provinces, especially in the current macroeconomic slowdown. IFC can provide the funds required by Cordoba to invest in the expansion and renewal of its road network, helping the Province diversify its funding sources. 3. Catalytic role: IFC's involvement is expected to have a strong demonstration effect in boosting investor confidence and attracting other lenders to finance the Province's capital expenditures. IFC will work with the Province to ensure its adherence to clear refinancing policies and practices, which could improve the Province's position in future capital raising efforts and potentially elevate its credit rating. 4. Strategic Partner/Stamp of Approval: The administration of the Province of Cordoba values IFC's stamp of approval as a strategic partner beyond the proposed investments. IFC will support its strategic priorities in roads and other sectors not only through financing but also technical assistance through our advisory services. For example, IFC will help the Province with traffic studies that will enable the development and financing of the roads that have been identified as strategic. Additionally IFC will work the Province to raise its process and procedures to international best practices & standards in areas such as environmental and social, insurance, and road maintenance. 5. Resource Mobilization: IFC's engagement will help improve access to financing, as banks have indicated that the risk mitigation obtained through the B-Loan structure is critical for Argentina exposure.

The project is classified as Category B according to IFC’s Policy on Environmental and Social Sustainability, as the adverse environmental, social, labor and occupational health and safety impacts and risks are expected to be few in number, be site specific, reversible, and readily addressed through standard design criteria and internationally recognized mitigation measures. Projects to be financed under this corporate loan to the Province of Cordoba involve expansion and/or completion of existing intra and peri-urban and rural roads with limited new environmental and social footprint

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.