The Ethiopian Parliament has approved a US$33m loan for the second phase of construction and up gradation of the Arbereket-Gelemso Micheta road project. The road has a total designed length of 57.5 km.
The funds were sourced from Oil Producing & Exporting Countries (OPEC), Fund for International Development (OFID), and the Arab Bank for Economic Development in Africa (BADEA). OFID contributed a total of US$23m, while BADEA US$10m loan for the project.
The road project aims at developing the national roads network through provision of a high-efficient road that will improve the service area of agricultural and trade activities within the region, and linking the region to all the rest of the country. The project will contribute to socio-economic development and poverty alleviation. The project is planned to upgrade the road from gravel to fully paved asphalt road.
The latest loan has raised BADEA’s total commitments to Ethiopian to 165.23 million dollars. Their loan is to be paid back within a period of 30 years after a grace period of 10 years, and carries an annual interest rate of 1%. OFID, on the other side, has a 5 year grace period for the loan repayment, which is to be done in 20 years and will attract a 1% interest rate and service charge.