IDB approves US$400 million loan for public transportation system in Santiago, Chile

Ensures continuity of services used by more than 5 million passengers a day

The Inter-American Development Bank 2008-04-23 announced the approval of a US$400 million loan to provide financial support to Transantiago, the public transportation system of Santiago, Chile.

The resources from this non-sovereign guarantee loan will be managed by Transantiago Financial Administrator (AFT), the private sector entity responsible for the public transportation system’s payments and collections.

The IDB loan will also support Chile’s comprehensive plan to improve the operation and quality of Transantiago’s bus and subway services, which are used by some 5.4 million passengers a day.

The Chilean government plans to send Congress a bill on a subsidy for Transantiago, seeking to ensure the public transportation system’s long-term financial equilibrium. Transantiago’s operation costs total about U$1.3 billion a year.

On presenting the loan to the Board of Executive Directors, President Luis Alberto Moreno said it allows the IDB to stand behind a project that is a top priority for Chile and a point of reference for Latin America. Transantiago, he added, will help improve living standards by reducing travel time, accidents, noise and pollution in Chile’s principal city.

“We all know that Transantiago, a singularly ambitious project, has had difficulties in its implementation. However, this situation is being turned around thanks to the commitment and the efforts of the Chilean government, private sector operators and the public,” Moreno said.

The IDB is also preparing a US$10 million loan for a program led by Chile’s Ministry of Transportation and Telecommunications to establish the Metropolitan Transportation Authority, which will monitor Transantiago’s services. The program will also support the financial and economic analyses of public transportation systems in other Chilean cities.