Construction Sector Debt Exceeds US$300 Million Amid Payment Delays

The construction sector in Paraguay is experiencing a difficult paradox in 2026: while a substantial portfolio of projects, new tenders, and infrastructure investments signals favorable activity, companies are struggling with financial difficulties. These challenges stem from delayed payments for public works, which are limiting execution capacity and straining working capital.

The situation reached a critical point in the first quarter, with accumulated debt to the sector ranging between US$220 million and US$240 million, plus approximately US$110 million in outstanding interest from previous years. This led to reduced work paces, financial struggles for some firms, and increased bank borrowing.

An agreement between the government and construction guilds injected US$150 million between April and May, with US$85 million disbursed in April. However, companies are still awaiting the remaining US$65 million and argue that this measure only partially alleviates the issue, failing to address the fundamental financing problem. As of early May, the debt remained around US$200 million, prompting concerns about financial sustainability in the coming months.

Companies are prioritizing mechanisms to prevent future debt accumulation. Among potential solutions, the cession of collection rights or certificates is being considered, allowing for advance resources through financial entities. However, current conditions present interest rates near 18.5% or 19%, deemed too high for the sector. Consequently, businesses emphasize the need for more efficient and cost-effective liquidity solutions.