The Inter-American Development Bank (IDB) approved a $480 million loan as part of the State of São Paulo Highway Investment Program to sustainably boost the competitiveness of the state’s production chains. The operation will boost production capacity and international and national integration by connecting less developed regions.

The operation will upgrade approximately 470 kilometers of at least seven state highways, making the infrastructure smarter, more sustainable, and more efficient. It will help develop a new generation of public highways to serve the productive sector and population. In addition, the project will optimize the way in which the supervision and management systems of the State of São Paulo Highway Department are digitalized. It will also build and certify the digital skills of the department’s employees.

This operation will benefit the main logistics chains that use the State of São Paulo’s transportation infrastructure, as well as the companies and employees of the region’s productive sector. The program will directly benefit 2.15 million inhabitants in 44 municipalities who will be served by the upgraded roads.

The State of São Paulo contributed 27% of Brazil's GDP in 2021, and its economy grew by 5.7%, which is higher than the national average. Most goods produced in the State of São Paulo are transported by road (84%) in around 290,000 trucks per day. Of these, 77.8% go to destinations within the state, 19.5% are for trade with other states in Brazil, and 2.7% cross the state enroute to another.

The program will reduce transportation costs and travel times for many agricultural chains in the central-northern zone of the State of São Paulo, as well as for industrial chains in São Paulo’s southern and coastal areas. By improving road quality in vulnerable areas, the public sector takes a crucial step towards boosting the competitiveness of regional production chains and achieving greater social inclusion by giving marginalized populations better access to services and jobs.

This loan will be disbursed over the course of five years from when it takes effect. It has a six-year grace period and an interest rate based on the Secured Overnight Financing Rate (SOFR).