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The World Bank Board of Executive Directors on July 31 approved a US$40 million loan for the Additional Financing of the Lifeline Road Network Improvement Project (LRNIP) for Armenia, according to the press service of World Bank Office in Armenia.

This project will further assist the Government of Armenia in its on-going efforts to improve accessibility to markets and social services through the rehabilitation of an additional 155 km of the lifeline road network, and enhance employment opportunities, mostly for the rural population. It will also help Armenia to strengthen the capacity of the Ministry of Transport and Communication (MoTC) in road safety and management of the road network, including disaster risk preparedness.

“Despite visible improvement since 2009, about half of the lifeline roads in Armenia remain in poor condition and there is still an important investment backlog for rehabilitation and maintenance. Trade facilitation and connecting local production to markets remain paramount in reducing rural poverty and promoting economic growth. Trade from rural areas is less than optimal due to restricted connectivity to markets as a result of the poor condition of roads. This has hindered trade facilitation for rural farmers, resulting in substantial crop losses for some communities due to an inability to get produce to markets on time, “ the WB said in a statement.
“As in the case of the original project, rehabilitation of additional lifeline roads would create temporary jobs in rural areas, and improve access to basic social services,” said Laura E. Bailey, World Bank Country Manager for Armenia. “It is vital that rural infrastructure is improved and maintained to promote agricultural trade, thus stimulating economic growth and local employment for the future.”
The implementation of the original project has progressed well. The proposed additional financing will raise the total length of roads to 360 km, 73 km of which have already been rehabilitated.

Total financing of this project is US$45 million, of which US$5 million will be the Government’s contribution. The World Bank will provide a US$40 million IBRD loan of variable spread, with a 14.5-year grace period and a total repayment term of 25 years.