ADB approves $US 80 million loan to Afghanistan

Manila, December 16, 2004 - The Asian Development Bank (ADB) said it has approved a soft loan of $US 80 million dollars to restore and improve key sections of Afghanistan's war-ravaged road system.

The loan will go towards reconstructing the last unpaved section of a national primary ring road, spanning 210 kilometers (130.2 miles) from Andkhoy to Qaisar, the ADB said in a statement.

The loan, extended at preferential rates, will also go towards installing toll facilities, the ADB added.

"Much of Afghanistan's road infrastructure was destroyed or damaged in more than two decades of conflict and civil strife," the Manila-based lender said.

"Damaged roads have become bottlenecks to the movement of people and goods, restricting movement and the flow of humanitarian assistance," the ADB noted.

More than half of the country's major roads are in poor condition and only one-fifth are in good condition, the bank said, adding that the transitional government has declared reconstruction and rehabilitation of the road network as the country's top priority for reconstruction.

Due to the "exceptionally difficult post-conflict circumstances facing Afghanistan," the ADB said, the loan would be on highly concessional terms with a 40-year term, including a grace period of 10 years.

Interest was set at one percent per annum.