The Malawi Government, the European Union (EU) and European Investment Bank (EIB) on Wednesday signed a €139 million (about K112 billion) financing agreement for the rehabilitation of 347 kilometre (km) of the M1.
The rehabilitation will start from Kamuzu International Airport (KIA) junction in Lilongwe to Mzimba junction then from Kacheche to Chiweta in Rumphi.
The EIB loan, with a tenor of 20 years, was signed by Minister of Finance, Economic Planning and Development Joseph Mwanamvekha and EIB head of public sector financing in sub-Saharan Africa Diederick Zambon.
Speaking during the signing ceremony, EU Ambassador Sandra Paesen said upgrading of the road will accelerate economic development and provide new opportunities for agriculture.
She said: “We are pleased to provide €43 million of grant financing through the EU Africa Investment Platform for the project alongside national, European and international partners.
“This project will serve to enhance Malawi’s connectivity, boost regional trade and ease the movement of goods and people along this North-South Corridor.”
On his part, Zambon said the loan represents EIB’s largest ever single engagement in Malawi since the start of operations in 1977.
“It [the road] will reduce transport costs, cut travel time awithin Malawi, to ports and neighbouring countries,” he said.
Mwanamvekha said the road project is crucial for the country because of its high economic importance for national and regional economies.
He said: “The bulk of our exports and imports are moved through this corridor.”
On his part, Minister of Transport and Public Works Ralph Jooma said improving road links is crucial for the sustainable economic development of Malawi and the Southern Africa Development Community region.