Mongolia secures road investment program, driving growth and development
Mongolia has secured a road investment program loan from the Asian Development Bank (ADB) for road improvement: the Western Regional Road Corridor Investment Program will provide transport accessibility between district centers and the western regional road, reducing the region’s isolation and driving development in one of the country’s poorest areas. ADB will provide a $170 million multitranche financing facility; funds will be released in three tranches.
The route, which links Mongolia to the Russian Federation in the north and People’s Republic of China through Xinjiang Uygur Autonomous Region in the south, is part of the Central Asia Regional Economic Cooperation (CAREC) Program’s CAREC Corridor 4. This corridor is one of CAREC’s six priority transport corridors designed to boost trade, tourism and investment among member countries and beyond.
“The remote western region of Mongolia suffers from high levels of poverty and underdevelopment, partly as a result of the lack of paved roads,” said Steven Lewis-Workman, transport economist in ADB’s East Asia Department. “Building paved roads in an area where there are very few will bring broad social and economic benefits, including increased access to jobs and markets both within Mongolia and with neighboring countries.”
The investment program covers the construction of over 290 kilometers (km) of regional roads, rehabilitation and construction of connecting local roads and bridges, building and equipping of three road maintenance units, and training and other support for road sector institutions. Total investments required amount to $262 million.
These investments, which complement another ongoing ADB road project in the corridor, will help complete the western regional road.
The program’s first project, funded by a $45 million tranche loan, includes construction of about 103 km of paved road between Baga Ulaan Davaa and Mankhan, and 20 km of local access road between district centers and the western regional road. A maintenance center will also be established and equipped, and capacity development efforts will be provided for maintenance planning, procurement, and project management. The first project is expected to be completed in 2016.
The government will contribute $27.85 million for the first project, and a total share of $92 million. The investment program will run for 8 years with an expected completion date of December 2020.