WASHINGTON, May 19, 2015– The World Bank Group’s Board of Executive Directors today approved a US$370 million credit, to help the government of Ethiopia further expand its transportation system and provide safe and efficient roads to its citizens.
The limited size and poor quality of roads has been a major constraint to economic growth and poverty reduction in Ethiopia. To address this challenge, the Government of Ethiopia, (GoE) with support from several development partners including the World Bank launched the Road Sector Development Program (RSDP) in 1997. Under RSDP, Ethiopia’s road network has more than tripled from 26,550 km to 99,522 km today, and 70 percent is now in good or fair condition compared with 22 percent at the start of the program. Despite these achievements, the road network has not kept up with the needs of Ethiopia’s fast growth and economic transformation. The sector also still faces several constraints including high traffic congestion and high accident rates.
The new Expressway Development Support Project, is designed to help Ethiopia overcome some of these challenges. Specifically, the project will support the construction of the 57 km Batu/Zeway- Arsi Negele portion of the Modjo- Hawassa new high capacity highway, connecting the southern region to central, northern Ethiopia and the Djibouti port, the country’s main trade route, while the corridor forms essential part of the Trans East African Highway that connects Ethiopia to Kenya and southern Africa.
The development of the 203 km Modjo-Hawassa expressway is a collaborative effort among the GoE and several development partners, and sets a positive example of harmonization and cooperation among traditional and non-traditional development partners. The African Development Bank (AfDB) is financing the construction of 57km, the Korea EXIM Bank 37 km, and the remaining 52km will be financed by the China EXIM Bank.
The project will also set the framework for expressway development through the preparation of a strategic master plan and the provision of institutional capacity building. In addition, it will provide road safety and institutional development support to the Ministry of Transport.
“The project will help to modernize the roads network and promote cost sharing and recovery of operational, maintenance and part of investment costs. It will also play an important role in supporting economic growth, while providing a high quality road for users and reducing road accidents.” said Guang Zhe Chen, World Bank Country Director for Ethiopia.
The project is consistent with the Bank Group's Country Partnership Strategy (CPS) for FY 2013-16, which aims to foster competitiveness and employment by supporting a stable macroeconomic environment, increasing productivity, increasing and improving delivery of infrastructure, and enhancing regional integration. The project will also help in facilitating domestic trade.
“The project contributes to the overarching goal of transforming Ethiopia’s economy by improving the quality of roads serving areas with high potential for tourism, light manufacturing, agro-processing and producing key export oriented agricultural products.” said Tesfamichael Nahusenay, World Bank Senior Transport Engineer.
The Ethiopian Roads Authority will be responsible for the implementation of the expressway construction, the framework for expressway development and institutional strengthening components. It will also implement activities on behalf of the Ethiopian Toll Roads Enterprise. The Ministry of Transport will implement the Road Safety and the institutional development support to the transport sector
The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing loans (called “credits”) and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 81 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of commitments going to Africa.