AfDB and Mozambique Negotiate Nacala Road Corridor Project

27/05/2009
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Maputo, 26 May 2009 – The African Development Bank (AfDB) and the Government of Mozambique on Tuesday in Maputo concluded two days of negotiations on the terms of the first phase of the Nacala road corridor rehabilitation and construction project. This first phase includes 365 kilometers of the 1033- km road that will link Zambia, Malawi and the interior of Mozambique to the port of Nacala. The estimated costs for the first phase is 195.94 million units of account (UA)[i], equivalent to US$ 293.48 million, aproximately US$ 270 million of which will be used on the Mozambique section of the road. The biggest share of the financing for this phase is expected to come from the African Development Fund, the concessionary window of the AfDB Group. Other donors include Japan’s JICA and Korea’s EXIM Bank. The mozambican government will contribute counterpart-funds estimated at US$ 34.14 million.

This multinational project will promote economic growth and regional integration within SADC, through the development of reliable, effective and seamless transport infrastructure. Better access to the port by for landlocked regions will improve transport services,  access to markets and social services for  communities in the area, and contribute to poverty reduction. Some 787,000 people are expected to benefit directly from the project in Mozambique.

The AfDB has, to date, invested some US$ 6 billion in infrastructure in the SADC region, 42% of which was put into the transportation sector. It is about the only institution financing regional operations in Mozambique, and this project will benefit from the Bank’s vast experience in implementing multinational projects on the continent.

Project negotiations focused mainly on project design, disbursements, procurement, monitoring and evaluation as well as audits, and culminated in the signing of the meetings’ minutes by both parties signalling the acceptance of the terms of the loan agreement. The appraisal report will now be finalized  for presentation to the Board of Directors for approval. Participants in the meetings included representatives of the Ministries of Finance, Planning and Development, officials of the Bank of Mozambique, the Road Fund, the National Roads Administration and the Japanese Embassy.