MANILA, PHILIPPINES - ADB will help boost regional trade and cooperation in Central Asia through a US$29.5 million loan that will help rehabilitate a critical part of the road linking Dushanbe, the capital of Tajikistan, to the Kyrgyz Republic.

The project, the second phase of the Dushanbe-Kyrgyz border road rehabilitation project, will improve about 89 kilometers of the central and border sections of the project road, along with 60 km of rural roads.

"By improving key sections of the road from Dushanbe to the Tajik-Kyrgyz border, the project will substantially reduce the obstruction to trade caused by poor road conditions and, consequently, promote regional trade and cooperation," says Jeffrey Miller, an ADB Senior Project Economist.

The road is part of a network in Central Asia that directly links Kazakhstan, the Kyrgyz Republic, the People's Republic of China, Tajikistan, Afghanistan, and Uzbekistan. It is also part of a larger network providing links to the ocean ports of Iran and Pakistan to the south, and to the Russian Federation into the north.

The road also serves as the only substantial link between Dushanbe and the Rasht Valley, an area in Tajikistan with a high incidence of poverty. The Rasht Valley used to be a large producer of fruit marketed throughout the former Soviet Union, but production has declined significantly since independence, in part due to poor road conditions.

"With improved roads, the valley's inhabitants will have better access to markets in Dushanbe and other cities in the region," adds Mr. Miller.

The project will also help increase road maintenance financing for Tajikistan's road network and procure road maintenance equipment for use on the project road. The Ministry of Transport will receive capacity building support for financial management, and road safety will be improved by strengthening the Transport Safety and Security Unit.

The loan is accompanied by a $500,000 grant for an integrated, community-based program to address the increased vulnerability of communities to HIV/AIDS and other infectious diseases that may arise during construction and after project completion.

ADB's loan and grant come from its concessional Asian Development Fund. The loan carries a 32-year term, including a grace period of 8 years. Interest will be 1% per annum during the grace period and 1.5% per annum for the rest of the term.

The Government will finance $9.5 million equivalent of the project's total estimated cost of $39.5 million.

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