Road Loan to improve trade

The Afghan Government has signed an agreement with the Asian Development Bank (ADB) and Japanese Fund for Poverty Reduction (JFPR) for US$ 138 million of grants and loan to fund road reconstruction.

Under the deal the ADB will provide a US$ 78.2 million loan and US$ 40 million grant for the US$ 141 million project which involves restoration of two key north-south road corridors in Afghanistan. The JFPR has agreed to provide US$20 million for the work, while the remainder of the funds will be met by the Afghan Government.

The funding package will allow restoration of 140 km of the Mazar-e-Sharif-Dara-I-Suf road and 98.9 km of the Bamian-Yakawlang road and work is expected to be completed in 2010.

According to the ADB, around 10% of Afghanistan’s 1.7 million population live close to the routes of these two roads and restoration will also boost plans to extract coal and iron ore in the region.

“Afghanistan has made significant progress in the past few years but its economy continues to be extremely fragile,” said ABD financial specialist Dong-Soo Pyo. “Investment in the country’s road network is a prerequisite to economic stability.”

In addition the US has agreed to fund US$ 94 million of improvements on 390 km of roads in Kandahar, Uruzgan, Paktika and Ghanz povinces.