World Bank Supports Further Improvement Of Rural Road Network In Arm

WORLD BANK SUPPORTS FURTHER IMPROVEMENT OF RURAL ROAD NETWORK IN ARMENIA

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Aug 28 2009
Lithuania

The World Bank’s Board of Executive Directors today approved a
credit of US$ 36.6 million equivalent of additional financing for the
Lifeline Road Improvement Project (LRIP-AF) for Armenia. This project
will assist the Government of Armenia in its on-going efforts to
drastically improve accessibility of the country’s main road network
for the rural population and to create employment. It will also help
Armenia mitigate the impacts of the global economic crisis on the
country’s economy and the well-being of its population.

The additional financing will further scale-up activities under
the on-going original project to improve the condition of 140 km of
roads. Over the years, insufficient investment in the rehabilitation
and maintenance of lifeline roads has made the overall road quality
poor, and left some roads difficult to use and others completely
impassable. The poor conditions and inadequacy of the lifeline roads
connecting rural communities to the main highways affects many aspects
of rural life and means that business opportunities are lost, it’s
harder for kids to get to school, and more difficult for people to
get urgent medical attention when they need it.

For example, the inability to bring crops to market in time has
resulted in losses of 40 percent or more, and in some communities up
to 80 percent. The rehabilitation of the road network will therefore
help farmers and small businesses in rural areas bring their products
to market more easily and at a lower cost, reducing the external
shock of the crisis.

"Rehabilitation of additional lifeline roads would also create
temporary jobs in rural areas which have been hard hit by the crisis,
and improve access to basic social services," said Asad Alam,
World Bank Regional Director for South Caucasus Countries. "While
this immediate impact is critical, the project will also improve
market connectivity for rural areas and build upon ongoing efforts
to strengthen the basis for growth and competitiveness."

"The direct and indirect job creation impact of the project is
estimated at about 10,000 person months of employment," added Satoshi
Ishihara, Head of the World Bank team designing the project. "The
implementation of the civil works will commence in late September
and be completed by the end of the next construction season. This
will provide an economic stimulus to rural communities, and ensure
benefits from improved roads."

The LRIP-AF has two main components. First, it will support
rehabilitation of approximately 140 km of the lifeline roads, located
in seven regions. In addition, a technical assistance component will
help the Armenian Government to modernize and increase the efficiency
of how they design their roads, and to support a road safety audit
manual as well as a "safe village" pilot that could be scaled up to
improve safety standards in other areas.

This project is part of the overall World Bank Group Country
Partnership Strategy (CPS) for 2009-2012 which was approved in early
June. The IBRD Flexible Loan has 25 years of maturity with 10 years
grace period. Since joining the World Bank in 1992 and IDA in 1993,
commitments to Armenia total approximately US$1, 313, 6 million.

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