ACN Newswire
09/29/2006
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Manila - An Asian Development Bank (ASX: ATB) loan and grant package totaling US$138.2 million will help finance the construction of a national highway in Afghanistan that will connect remote areas to the country's center.

The project will rehabilitate 140.3 kilometers of the Mazar-e-Sharif-Dara-i-Suf road and 98.9 km of the Bamian-Yakawlang road, which comprise the north-south corridor connecting the ring road through central Afghanistan.

These roads pass through Balkh, Bamian, and Samangan provinces, at the center of the country and home primarily to rural farmers. About 10% of the collective 1.7 million population in these provinces lives in large cities, where the production of coal reserves and iron ore deposits is poised to boom.

"Afghanistan has made significant progress in the past few years; however, its economic and fiscal situation continues to be extremely fragile," says Dong-Soo Pyo, an ADB principal financial specialist. "To accelerate the country's transition, continued investment in the road sector is a prerequisite."

The project also entails installation of cross-border facilities in Spin Boldak and an HIV/AIDS prevention and anti-human trafficking awareness campaign.

Road rehabilitation efforts in the war-torn country have so far focused on regional highways, particularly on the ring road, with emphasis on trade links to neighboring countries. These road projects are expected to be completed by 2008.

The Government's next priority is the development of the north-south and east-west corridors, which connect the ring road to improve access for people living in remote areas at the center of the country. More than 90% of national highways and provincial roads are either earth or gravel, and more than 60% are in poor condition.

ADB's support - comprising a $78.2 million loan and $40 million grant - comes from its concessional Asian Development Fund and is financing 84% of the project's total estimated cost of $140.9 million. The loan carries a 40-year term, including a grace period of 10 years, and an annual interest rate charge of 1%.

The Japan Fund for Poverty Reduction (JFPR), an ADB trust fund financed by the Government of Japan, will provide a $20 million grant for civil works for the Bamian-Yakawlang road.

The Government will shoulder $2.7 million to cover land acquisition and taxes and duties for the project.

The Ministries of Public Works, Finance, and Public Health are the executing agencies for the project, which is due for completion in December 2010.

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