The Paraguayan government is negotiating more than $1.3 billion in new international loans to finance infrastructure, energy and logistics projects, according to data from the Ministry of Economy and Finance (MEF). The funds will be implemented by different ministries and state-owned companies, with more than $700 million concentrated in the Ministry of Public Works and Communications (MOPC).
The largest loan under negotiation, worth $300 million, will be requested from the Development Bank of Latin America and the Caribbean (CAF) as a contingent credit line for liquidity and is still under consideration by the legislature. Another $280 million from the World Bank already has a presidential decree and will be allocated to multimodal logistics in the department of Itapúa, under the responsibility of the MOPC.
State electricity utility ANDE will receive $165 million from the Inter-American Development Bank (IDB) to expand the high-voltage transmission system and modernize the Acaray hydroelectric plant. Another project, already enacted, provides for up to $230 million from the Japan International Cooperation Agency (JICA) to improve the socioeconomic corridor in southwestern Ñeembucú and Misiones, also to be implemented by the MOPC.
Of the $5.6 billion in loans approved through July, only 50.8% had been disbursed, leaving $2.7 billion still unused. The IDB is the largest creditor, with $1.9 billion granted, followed by CAF, with $1.7 billion. Paraguay's public debt exceeds $21 billion, equivalent to 34% of GDP, a level specialists consider low; they recommend increasing borrowing to as much as 70% of GDP to finance infrastructure.
Economist Sergio Sapena argues that higher debt could spur development, but critics warn that public spending has not improved in quality despite continued growth in recent years.