AIIB approves $165.5 million loan to improve Uzbekistan highway

The Board of Governors of the Infrastructure Investment Bank of Asia (IAIB) approved a loan of US$165.5 million to improve the road efficiency, safety and climate adaptability of major cross-border highways in the Bukhara region of Uzbekistan.

Good road connectivity is an important growth driver for inland Uzbekistan. The country’s road network plays an important role in transporting goods and passengers in Central Asia. However, Uzbekistan’s road infrastructure investment is insufficient to meet the needs of infrastructure upgrades to maintain growing traffic demand. The Uzbekistan government has identified the modernization of road transport as a priority development area. The government is seeking funds to fill the funding gap to support road construction and improvement.

Bukhara Road Network Improvement Project.

The 78 km of financial support for the Bukhara section of the Bukhara International Highway Network Repair Project will meet the needs of the Bukhara region road network repair. The project is expected to directly benefit about 247,000 people living in the area by reducing fuel and vehicle maintenance costs, enhancing road safety and saving travel time. As an important international freight corridor, the highway is expected to increase operational efficiency, strengthen the flow of international freight and facilitate trade activities, thereby bringing broader benefits to the agricultural and industrial sectors of the Bukhara region.

According to Konstantin Limitovskiy, vice president of investment operations for the Asian Investment Bank, the project is of regional importance and promotes cross-border interconnection with the Asian Investment Bank to release higher productivity and higher economic growth The strategic focus is highly consistent. He said: "As our first independent transport project in Uzbekistan, this funding will help strengthen the country's transport infrastructure and strengthen the major international transport corridors across Eurasia."

The funding will also pave the way for the next phase of the project, which includes the repair and maintenance of the M37 international highway section in and around Bukhara area, as well as the area of the Republic of Karakarpakstan and Horezm/ Local road network.

In addition to improving road efficiency and safety, the project is expected to strengthen road topography and hydrological design to respond to multiple climate scenarios and enhance resilience to the negative impacts of climate change.

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