The World Bank Board of Executive Directors today approved a US$40 million loan for the Additional Financing of the Lifeline Road Network Improvement Project (LRNIP) for Armenia. This project will further assist the Government of Armenia in its on-going efforts to improve accessibility to markets and social services through the rehabilitation of an additional 155 km of the lifeline road network, and enhance employment opportunities,mostly for the rural population. It will also help Armenia to strengthen the capacity of the Ministry of Transport and Communication (MoTC) in road safety and management of the road network, including disaster risk preparedness.
Despite visible improvement since 2009, about half of the lifeline roads in Armenia remain in poor condition and there is still an important investment backlog for rehabilitation and maintenance. Trade facilitation and connecting local production to markets remain paramount in reducing rural poverty and promoting economic growth. Trade fromrural areas is less than optimal due to restricted connectivity to markets as a result of the poorcondition of roads. This has hindered trade facilitation for rural farmers, resulting in substantialcrop losses for some communities due to an inability to get produce to markets on time.
“As in the case of the original project, rehabilitation of additional lifeline roads would create temporary jobs in rural areas, and improve access to basic social services,” said Laura E. Bailey, World Bank Country Manager for Armenia. “It is vitalthat rural infrastructure is improved and maintained to promote agricultural trade, thus stimulating economic growth and local employment for the future.”
The implementation of the original project has progressed well.The proposed additional financing will raise the total length of roads to 360 km, 73km of which have already been rehabilitated. Since the launch of the Lifeline Road Improvement Project (LRIP) in 2009, the previous series of projects, there has been a noticeable improvement in localemployment, while journey time has declined on average by 40 percent. The World Bank-financed LRIP for a total amount of US$101.6 million has already upgraded 433 km of lifeline roads across the regions.
The Additional Financing of the LRNIP has two main components. First, it will support lifeline road improvementwith rehabilitation of 155 km of roads, located across the regions including through rehabilitation and maintenance contracts, which have been successfully piloted. A new Contingent Emergency Response (CER) sub-component is being introduced, as a precautionary measure that would allow the Government and the Bank to quickly channel the loan financing for emergency recovery efforts following an adverse natural or man-made disaster.
Secondly, in terms of institutional strengthening, it would finance: (i) preparation of a social monitoring and impact evaluation study; (ii) preparation of a strategic development plan for the lifeline road network; (iii) lifeline road network data collection for the Road Asset Management System (RAMS); (iv) development of a new road safety action plan and the implementation of selected activities; (v) technical assistance with regard to disaster risk preparedness for the road sector; (vi) purchase of road laboratory equipment for determining the chemical composition of bitumen; and (vii) installation of road safety signs.
“The sections of rehabilitated network help farmers and small businesses in rural areas to bring their produce to market more easily and at a lower cost,” added Maria Carolina Monsalve, Head of the World Bank project team. “The project will also continue supporting the “Safe Village” program through small road safety civil works combined with awareness campaigns at community level. While four schemes were envisagedby the end of the original project, a total of thirteen have been completed to date.”
The first year program of road works is comprised of seven road sections located in five regions,with the remaining road sections tobe identified during project implementation. The seven road sections total 50.5 km: all roads are bituminous roads in poor to very poor condition and serve in total 183,446 persons.
Total financing of this project is US$45 million, of which US$5 million will be the Government’s contribution. The World Bank will provide a US$40 million IBRD loan of variable spread, with a 14.5-year grace period and atotal repayment term of 25 years.
Since joining the World Bank in 1992 and IDA in 1993, the commitments to Armenia total approximately US$2,158.730 million.