There are news (on Región Binacional ) that the government of Chile may have renounced the loan approved by the IDB (Inter American Development Bank) of US$ 1.5 Billion for the construction of the Agua Negra Tunnel. The unconfirmed source of the news seems to be the Argentinian officials.

The news (or rumors) for such renouncement has reached Coquimbo, the Chilean region that would benefit most from the tunnel together with the Argentine province of San Juan. The Regional Council of Coquimbo seeks to clarify the situation via the Ministry of Public Works of Chile.

The Agua Negra tunnel project first proposed by the then-presidents Presidents Cristina Fernandez and Michelle Bachelet of Chile and Argentina in 2009 will be the first bi-national project between two countries. It is going to be financed by the Inter-American Development Bank (IDB).

Argentina has always been more enthusiastic about the tunnel. Chile is known to be not very enthusiastic over the construction of the tunnel. According to a news published at Chile's Diario la region de Coquimbo a few months ago, an official of Chile's Ministry of Public Works is quoted saying "Generating these expectations is not right, we must reactivate the economy through local development," seemingly in a direct answer to earlier pro-tunnel comments of Argentinian president.

https://www.regionbinacional.com/chile-renuncio-al-credito-del-bid-para-el-tunel-de-agua-negra/

Argentina's ambassador to Chile, Bielsa has criticized the Chilean government's cancellation of the IDB loan for the tunnel: "This occurred at a time that does not speak highly of the good faith of the one who made the decision".

https://oncediario.com.ar/2020/12/04/san-juan-escenario-complejo-el-tunel-de-agua-negra-genera-tension-politica-entre-argentina-y-chile/

This has received the a reply from the Chilean ambassador to Argentina Nicolás Monckeberg Díaz, via twitter who said, to the surprise of many, said that Argentina had done the same! Another news is that the cancelled credit is not the main US$ 1.5 Billion that IDB promised but only the US$20 Million that had been released for the initial study for the best route etc for the tunnel.

This is the translation of what the Chilean ambassador has said in a twitter flood:

Chile has a deep interest and decision to connect the Region of Coquimbo with the province of San Juan in Argentina. This is the way both nations are working in a committed way.

If the best route for said connection includes a tunnel or other engineering solution, it will be determined according to the best technical studies and thus establish which is the best route for that.

The IDB offered both countries a US20 million loan to finance studies. Chile rejected this financing route because it implied paying interest, which has nothing to do with the decision to build the pass, nor does it jeopardize the studies to define the best route.

Argentina also withdrew from this loan requesting the IDB, through a formal letter on April 20, 2020, to use said funds in a new loan to be used in the fight against COVID.

That for now Chile and Argentina choose to dispense with this credit does not compromise the continuity of the technical studies necessary for any project of this magnitude.

Update on 11 Dec 2020:

"Argentina did not renounce the Agua Negra credit. It just redirected it to COVID-19 fund`.

According to Diario La Region, the IDB (Inter American Development Bank) credit has two components:  PETAN (Program for the Structuring of the Agua Negra Tunnel) of US$20 million for each country for initial studies of Agua Negra tunnel. The second part is TAN (Agua Negra Tunnel), of 1,500 million, to actually build the tunnel.

When the Chile ambassador to Argentina says "Argentina also withdrew from this loan requesting the IDB, through a formal letter on April 20, 2020, to use said funds in a new loan to be used in the fight against COVID" he means exactly that. The initial US$20 million (PETAN) for preliminary Agua Negra studies has been replaced with a new credit that  would be used for COVID.

In effect, Argentina did exactly the same thing that they are accusing the neighbouring country for: They said "No thank you" for the first part of the IDB loan for Agua Negra tunnel.

http://www.diariolaregion.cl/argentina-no-habria-renunciado-al-credito-del-bid-sino-que-redirecciona-recursos-para-enfrentar-la-pandemia/