Ethiopia-Kenya: US$ 326.5 Million for Road Project

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Tunis, 1 July 2009 – In line with its commitment to support integrated infrastructure development in the Regional Member Countries, the African Development Bank (AfDB) Group has approved a US$ 326 million (210 million UA) loan to finance the second phase of the Mombasa-Nairobi-Addis Ababa Road Corridor Project. It involves the construction and tarring of 438 km road sections including 245 km Merille River-Marsabit-Turbi road section in Kenya and 193 km Ageremariam-Yabelo-Mega road section in Ethiopia, the construction of roadside socio-economic infrastructure, and the construction of a One-Stop-Border-Post.

The funding was approved on Wednesday in Tunis by Executive Directors of the African Development Fund (ADF), the concessionary window of the AfDB Group which is providing the loan.

The project aims at improving transportation between Kenya and Ethiopia for the benefit of both countries and the region. On completion, the project is expected to reduce transport and shipping costs between Kenya and Ethiopia; reduce transit time for imports and exports; and increase the volume of Ethiopian goods transiting through the Mombasa Port in Kenya.

The project will also promote trade and regional integration, increased intra-regional trade between Ethiopia and Kenya as well as the Eastern and Horn of Africa regions. Project team leader and Chief Transportation Engineer at the AfDB, Amadou Oumarou, explained that the development of the Mombasa-Nairobi-Addis Ababa Road Corridor into a viable trade route required an integrated approach, which took into account not only the construction or improvement of the road, but also the capacity expansion of the port of Mombasa, the construction of transit infrastructure facilities, and the policy and operational changes for trade and transport facilitation.

It is in line with the two countries’ Poverty Reduction Strategies as well as the Bank Group’s assistance strategies. Ethiopia’s 2005-2010 second Poverty Reduction Strategy, known as the Plan for Accelerated and Sustained Development to end Poverty (PASDEP) accords high priority to infrastructure development to support industrialization and commercialization of agriculture.

Designed to address the development constraints caused by poor transport infrastructure and regional interconnectivity the project is in line with the Bank’s 2008-2012 medium-term strategy on promoting infrastructure development and regional integration. The Bank has developed extensive experience in Kenya and Ethiopia as well as multinational infrastructure projects across Africa. The project road is a continental priority under the Trans-African Highway Network and a flagship regional integration project under the NEPAD short-term infrastructure action plan.

Presenting the project to the Board of Directors, AfDB Director for Infrastructure, Gilbert Mbesherubusa, highlighted the complementarities and synergies between the project and previous interventions on this major corridor such as The Nairobi-Thika Highway in Kenya the Arusha-Namanga-Athi River road in Kenya and Tanzania, the Singida-Babati road in Tanzania and the studies of the Kazungula Bridge between Zambia and Botswana. Transport Sector Manager for the region, Juste Rwamabuga, described the project as a good example of effective donor coordination as several other donors including the European Union and the Japanese International Cooperation Agency (JICA)  are actively involved in the program.   

By linking Kenya and Ethiopia, the project will impact the whole of east and horn of Africa regions. In terms of trade and regional integration, the project area extends beyond Kenya and Ethiopia to include Uganda, Tanzania, Eritrea, and Djibouti. However, since the corridor is being developed in phases, the project area for the first and second phases lies mostly in the Northeast arid and semi arid region (ASAL) of Kenya and the Oromia Region of Ethiopia.

The project, estimated at UA 328.76 million, will be co-financed by the Bank Group, the European Union, as well as the Ethiopian and Kenyan governments. The AfDB Group is the lead financing agency, providing 64% of the total requirements in the form of two ADF loans to Ethiopia and Kenya amounting to UA 85.00 million and UA 125.00 million, respectively.

* 1 UA Units of Account) = 1.54805 US$ on 01/07/2009

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