European support to help unlock Great North Road’s potential for Zambians

The European Investment Bank (EIB) has signed a EUR 110 million (ZMK 1.27 billion) concessional loan with the Zambian Ministry of Finance in support of the Great North Road (T2), to be followed shortly by the signature of an EU grant of EUR 72.45m that will complement EIB financing.

The overall project, co-financed by the government and AfDB, will upgrade and widen some 372 kilometres of road between Mpika and Nakonde, making for both faster and safer traveling. It also includes the rehabilitation of about 50km of feeder roads and complementary initiatives in the area, as well as technical assistance. The EIB and EU package will finance the 162km stretch from Mpika to Chinsali.

Apart from creating better conditions for transport and communication, the project will contribute to provide economic and social opportunities, including better accessibility to markets, employment and additional investments both at national and regional levels. By unlocking and diversifying the country’s economic potential, the road upgrade is expected to promote inclusive growth and reduce poverty.

“The upgrade of the Great North Road will be invaluable for Zambia and the wider region. Enhanced road transport should lead to time-saving and cost-reduction, making Zambia and other countries along the North-South corridor more productive and rendering their economies more competitive, which will ultimately have an effect on poverty alleviation. This underlines the Bank’s longstanding support to regional transport corridors on the African continent that enable economic and social development which in turn supports the UN’s Sustainable Development Goals,” said EIB Vice-President Ambroise Fayolle, responsible for operations in Sub-Saharan Africa, commented.

EIB has a longstanding relationship with Zambia, first lending to a project in the country in 1978, and this will be the second intervention for the benefit of strategic transport corridors after the signature in 2011 of the Bank’s EUR 80 million loan for the Great East Road Rehabilitation. In total, the EIB has provided EUR 474 million in financing in Zambia in the past seven years, in a wide range of public infrastructure (transport, water, sanitation, energy), as well as in private sector through local banks and microfinance institutions to support SMEs and micro-entrepreneurs.

Original source: EIB
Published on 8 August 2018