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ReadParaguay's long delayed commuter train has a new partner. On February 4, 2026, during an official visit to the United Arab Emirates, President Santiago Peña announced an agreement with the UAE for the Tren de Cercanías, the electric commuter line planned between Asunción and the towns to its east. He said it would improve the lives of thousands of Paraguayans.
The partner is Etihad Rail, the state owned company behind the UAE's national railway. Javier Giménez, the Minister of Industry and Commerce, put the investment at about US$450 million and said the project would mark a before and after for passenger transport.
The plan
- Route: a first stage from Asunción to Luque, then an extension to Ypacaraí, about 43 km in total.
- Trains: fully electric, with 12 stations, 11 trains and capacity for about 40,000 passengers a day.
- Structure: Fepasa, the state railway company Ferrocarriles del Paraguay, and Etihad Rail will form a new company to build and operate the line under a 30 year subconcession.
- Money: according to the newspaper Hoy, about US$50 million from the Paraguayan state, about US$150 million from Etihad Rail and the rest in loans from Emirati financing. Mr Giménez said half the investment would be the partners' own capital and the rest low cost debt on favourable terms.
- Timing: feasibility studies start immediately and construction is expected to begin in late 2026 or early 2027. Mr Giménez said the electric train could be operating within 36 months.
The agreement still has to be approved by Congress, as the earlier version of the project was.
A project with a long history
Regular passenger trains between Asunción and Luque stopped in the early 2000s, and plans to bring them back have come and gone. In 2017, Fepasa said a modern electric commuter train could be running from 2020. In September 2024 the government cancelled a US$500 million concession with a Korean consortium and said it would look for new partners. In November 2025 an Etihad Rail technical delegation visited Asunción to discuss urban rail and freight with the president. This week's agreement follows those talks.
That history is worth keeping in mind. The project now has a funded partner and political backing at the highest level, which is more than it has had for years. But the studies, the congressional vote and the financing still have to come together before work starts.
Which areas could benefit
The final station list will come out of the engineering studies, so any map today is provisional. Earlier plans for the same corridor give a guide: a 2024 version of the project listed stops at the old central railway station in Asunción, Botánico, Luque, Yukyry, Areguá, Patiño and Ypacaraí.
- Central Asunción, around the historic railway station, where a reliable link to the suburbs could bring more people into the old city centre.
- Botánico, around the botanical garden in the north east of the capital.
- Luque, the end of the first stage and home to Paraguay's main international airport.
- Areguá and Ypacaraí, towns near Lake Ypacaraí that would gain a rail link to the capital in the second stage.
In cities around the world, homes and land within walking distance of good rail stations tend to gain value once a line is running. The important words are once it is running. Prices often move on announcements, and a buyer who pays extra for a station that opens years late, or in a different place, carries that risk alone.
What it means if you are considering Paraguay
If you are thinking about buying near the line, treat the train as a possible bonus rather than the reason for the purchase. Look for property that makes sense today on price, location and rental demand, and check exactly where the planned route and stations are before paying a premium for being close to them.
Our real estate due diligence service in Paraguay checks title and ownership history at the registry, that the cadastral records match the land on the ground, unpaid taxes and liens, and building permits, before you commit. Paraguay's residency itself does not require buying property, and our Paraguay residency program handles the application with our local team and a fixed fee quoted in writing.
This article is general information, not legal, tax or investment advice.
