Paraguay signs rail MoU with Etihad Rail

President Santiago Peña of Paraguay and the UAE’s president, Sheikh Mohammed bi Zayed Al Nahyan, signed a transport and energy MoU in Abu Dhabi on February 3 which includes a tram-train project.PARAGUAY’s Ministry of Public Works and Communications (MOPC) has signed a memorandum of understanding (MoU) with the United Arab Emirates (UAE) and Etihad Rail regarding a project to build a 44km tram-train line linking Asunción with Ypacaraí. Under the MoU, Paraguay and the UAE will form a 30-year concession via a special purpose vehicle owned by Paraguayan Railways (Fepasa) and Etihad Rail. The tram-train service is expected to carry around 40,000 passengers per day, equating to about 14 million passengers annually. The total cost of the project is estimated at $US 400-450m, with detailed studies to be completed over the next eight months to define final financing and scope. Etihad Rail is expected to commit $US 150m, while Fepasa and Paraguay will contribute $US 50m. According to Paraguay’s Minister of Industry and Commerce, Javier Giménez, the remaining $US 200m will be arranged through external financing in the UAE market, while the deal includes a non-reimbursable $US 15m contribution from the UAE to Fepasa to support preparatory work. The project involves rebuilding a 44km section of the former national railway and will be delivered in two phases. The first 16km section will run from Asunción to Luque, with the second phase extending the line by 28km to Ypacaraí. Construction could begin in early 2027, with a roughly 36-month build period once financing and approvals have been secured.