European institutions will provide over K112 billion (139 million euros) toward the rehabilitation of over 347 kilometre stretch of the M1 in an effort to reduce transport costs, cut travel time and facilitate the country’s exports.
In a statement on Thursday, the European Investment Bank (EIB) and European Union said once carried out there will be significant improvements in safety for road users on the M1 road which currently is in terrible state of disrepair.
The loan was formally agreed at a signing ceremony in Lilongwe on Wednesday which Finance Minister, Joseph Mwanamvekha, Minister of Transport and Public Works Ralph Jooma and EU Ambassador Sandra Paesen attended.
Others who attended the signing ceremony are the chief executive officer (CEO) of the Malawi Roads Authority Emmanuel Matapa, CEO of the Malawi Roads Fund Administration, Stuart Malata and representatives of the European Investment Bank.
The loan, has a tenor of 20 years.
Mwanamvekha said after signing the road project is crucial for the country because of its high economic importance for our national and regional economies.
“It provides an important international corridor between Malawi and neighbouring countries and the bulk of our exports and imports are moved through this corridor; hence, there is a need for an upgrade.”
The EU has been involved in supporting the local transport sector for some time. This grant comes on top of an ongoing 35 million euro programme to rehabilitate rural roads in 12 districts throughout Malawi.
“The European Union is a key partner of Malawi and upgrading the M1 road will accelerate economic development across the country and provide new opportunities for agriculture,” said Paesen,
The M1 road upgrade is expected to be completed by December 2021.