CAREC Corridor 2 Road Project Gets $600 Million ADB Funding

The Uzbekistan road section of the A380 highway, which forms part of the Central Asia Regional Economic Cooperation (CAREC) Program‘s Corridor 2, is getting support from a $600 million Asian Development Bank (ADB) multitranche financing facility.

The ADB Board of Directors approved the financing for a program comprising three projects. The program will reconstruct over 220 kilometers of the A380 highway, and provide training support for improved planning, project management, road asset management, and community facilities.

CAREC Corridor 2 connects the Caucasus and Mediterranean to East Asia, and the route through Uzbekistan links with 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.

The A380 highway will also connect to another ADB-assisted road project being processed in Kazakhstan. 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 Transport and Trade Facilitation Strategy that is developing 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 in ADB.

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

The funds will be released in three tranches and include $240 million from ADB’s ordinary capital resources and $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 $138 million, has made a request for $115 million for the first stage project.

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