ADB: $30.6 mln loan to improve rural roads in Armenia
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.