ADB provides US$ 600 million to Improve key Uzbekistan road corridor

A key highway in Uzbekistan linking the Central Asian country to its neighbors is getting support from a US$ 600 million Asian Development Bank (ADB) multitranche financing facility.

The ADB approved the financing for a program comprising three projects.

The objectives are to reconstruct over 220 km of the A380 highway, and to provide training support for improved planning, project management, road asset management, and community facilities.

The A380 highway forms part of the Central Asia Regional Economic Cooperation Program (CAREC) and one of its corridors - Corridor 2. This connects Uzbekistan to Afghanistan, Kazakhstan, the Kyrgyz Republic, Tajikistan, and Turkmenistan.

Upgrading the highway into a four-lane international design-standard road, rehabilitating other sections, and improving road planning and management will shorten travel time, reduce transport costs, improve safety, and support growth and poverty reduction.

Another ADB-assisted road project being processed in Kazakhstan will connect the country with the A380 in Uzbekistan. Once the two highways are completed, they will allow Uzbekistan and other Central Asian countries direct access to the Caspian Sea via Aktau, and eventually the Black Sea, via corridors to be built in Azerbaijan and Georgia.

"CAREC has a strategy to develop six transport corridors to improve connectivity, cut costs and boost trade both within Central Asia and beyond. This investment program is an integral part of this strategy," said Olly Norojono, a senior transport economist at ADB's Central and West Asia Department.

Road transport is expected to keep growing in Uzbekistan. The government has drawn up a US$ 2.6 billion national road development plan for 2009-2014, which ADB's program supports.

The funds, to be released in three tranches, will include US$ 240 million from ADB's ordinary capital resources and US$ 360 million equivalent from the Asian Development Fund - its concessional financing window.

Funds from ordinary capital resources will be priced in accordance with ADB's LIBOR-based lending facility. The government, which is providing counterpart financing of US$ 138 million, has made a request for US$ 115 million for the first stage project.