ADB: $30.6 MLN LOAN TO IMPROVE RURAL ROADS IN ARMENIA
Infrasite, Netherlands
Oct 4 2007
MANILA, PHILIPPINES – The Asian Development Bank (ADB) extends its
first loan to Armenia through supporting the rehabilitation of about
220 kilometers of rural roads and the improvement of transport sector
management as part of its efforts to promote transport efficiency
and reduce poverty in the Central and West Asian region.
ADB will provide a $30.6 million loan to cover most of the $41.4
million funding requirement of the Rural Road Sector Project. ADB will
also extend a $600,000 grant for the development of a new transport
sector strategy.
Armenia is facing increased challenges as a result of globalization
and has made efforts to strengthen links between its economy and
that of other countries. The transport sector, particularly the road
subsector, has played an increasingly important role in this process.
The project will help in the integration of selected rural communities,
which make up about 10% of the total rural population, by improving
high priority rural feeder roads connected to the national road
network.
The majority of the road networks in Armenia pass through mountainous
terrain. Landslides occur frequently and severe winter requires
extensive efforts to maintain access. In many areas of the road
network, heavy rainfall and poor road drainage cause traffic problems
and road damage.
To address the problem, the Government of Armenia developed a Lifeline
Road Network Program in 2004 to improve the access of rural communities
to the national highway system, targeting 784 high priority rural
secondary and local roads totaling 2,700 kilometers.
The program, which has a total estimated cost of $300 million,
includes the ADB-backed road project.
"The majority of the rural population in Armenia depends heavily on
road transport for their daily lives and access to jobs, markets and
basic social services," said Haruya Koide, principal infrastructure
finance specialist of ADB’s Central and West Asia Department. "About
1.2 million people, or 38% of the total population, live in rural
areas, of which more than 45% is poor. Poverty reduction has been
slower in rural areas mainly because of constrained economic activities
caused by the mountainous landscape and poor transport infrastructure."
The road project will help increase mobility and improve accessibility
of the rural poor to basic social services; enhance employment
opportunities; and increase access to regional centers, the capital
city, and domestic and external markets.
Complementing the road project, the ADB grant will develop a new
transport sector strategy and enhance the capacity of the government’s
Ministry of Transport and Communications and Armenian Roads Directorate
Non-Commercial State Organization.
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