AIIB approves US $165.5m loan to improve roads in Uzbekistan

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The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved a loan of US $165.5m to improve road efficiency, safety and climate resilience of major cross-border roads in the Bukhara region in Uzbekistan.

Good road connectivity is an essential growth driver in landlocked Uzbekistan. The country’s road network plays an important role in transporting goods and passengers in Central Asia. However, road infrastructure in Uzbekistan is faced with insufficient investments to meet the need for infrastructure upgrades to sustain growing traffic demand. The Government of Uzbekistan has identified the modernization of road transport as a priority development area. It is securing funds to fill the financing gap to support road construction and improvement.

Bukhara Road Network Improvement Project

To address this financing need, the Bukhara Road Network Improvement Project Phase 1 will support the rehabilitation and maintenance of a 78-kilometer section of the international road A380 in the Bukhara region. The project is expected to directly benefit about 247,000 people who reside in the area by reducing fuel and vehicle maintenance costs, enhancing road safety and saving travel time. As a key international freight corridor, the road’s expected improved operational efficiency would enhance movement of international freight and facilitate trading activities, resulting in wider benefits for agricultural and industrial sectors in the Bukhara Region.

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According to AIIB Vice President, Investment Operations, Konstantin Limitovskiy, this project is of regional importance and well-aligned with AIIB’s strategic priority of promoting cross-border connectivity to unlock greater productivity and higher economic growth. “As our first stand-alone transport project in Uzbekistan, the financing will help enhance the country’s transport infrastructure and strengthen key international transport corridors across the Eurasian landmass,” he said.

The financing will also pave way for the next phase of the project, which covers rehabilitation and maintenance of international road M37 sections in and around the Bukhara region, as well as regional/local road networks in the Republic of Karakalpakstan and Khorezm regions.

In addition to improving road efficiency and safety, the project is expected to enhance resilience to the negative impacts of climate change by strengthening road topographical and hydrological design in response to multiple climate scenarios.

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