- Improvements to 347km road to reduce transport costs, cut travel time and facilitate exports
- EIB Vice President highlights economic and social impact of project during Malawi visit
- EIB, World Bank and European Union support EUR 191 million upgrade scheme
- M001 upgrade will improve international links to Zambia and enhance access to Dar es Salaam as part of the north-south regional transport corridor.
The European Investment Bank (EIB) and European Union today confirmed support for refurbishing the M001 Road at a ceremony in Lilongwe with Minister of Finance and Economic Affairs, senior government officials and international representatives.
Once complete the rehabilitated M001 road is expected to reduce transport costs, cut travel time and facilitate agricultural exports from rural communities and to ensure a better international connection of Malawi to its neighbouring countries. The new investment will lead to improved road safety by upgrading the road to modern standards.
European Investment Bank and European Union financing totalling EUR 139 million (139 billion MWK), in support of the EUR 191 million road rehabilitation programme, was highlighted at a ceremony in Lilongwe earlier today. Finance Minister and Economic Affairs, Hon. Sosten Alfred Gwengwe, M.P, Minister of Transport and Public Works Hon. Jacob Hara, M.P European Investment Bank Vice President Thomas Östros, EU Ambassador Rune Skinnebach, acting CEO of the Malawi Roads Authority Engineer Francis Dimu, CEO of the Malawi Roads Fund Administration, Stewart Malata and representatives of the European Investment Bank attended the ceremony.
“The M001 road is crucial for Malawi given the essential need to improve trade and transport across our country and to neighbouring countries. The M001 road is the main transport route for our agricultural exports and import from regional ports. Unfortunately, the road corridor needs rehabilitation to cut transport delays and associated costs and reduce high maintenance needs. Today’s financing agreement will enable the European Investment Bank loan and European Union grant to ensure that Malawi benefits from better transport connections in the years ahead.” said Minister of Finance, Economic Planning and Development, Hon. Sosten Gwengwe.
“It is a pleasure to be in Lilongwe today to demonstrate the European Investment Bank’s support for upgrading Malawi’s principal road that will unlock economic and social benefits both in this country and the wider region. The European Union Investment Grant being signed this morning will be combined with the EIB loan that represents our largest ever single engagement in Malawi since the start of operations in 1977. The EIB is pleased to work with Malawian partners, the European Union and World Bank on this truly transformational project that will cut transport costs and reduce delays and make it easier to export agricultural produce from Malawi to ports and neighbouring countries.” said Thomas Östros, European Investment Bank Vice President.
“Improving road links is crucial for the sustainable economic development of Malawi and the SADC region, as the M001 road forms part of the north-south corridor linking Malawi and other SADC countries to the port of Dar es Salaam. Once work to upgrade the M001 road is complete, farmers in rural districts will benefit from improved access to local markets, and our country will have easier access to international markets. Over the last 40 years the European Investment Bank has helped to improve water supply, agriculture, aviation safety and energy across Malawi and the close cooperation between the EIB and Malawi has made the signature of the largest ever EIB loan for investment in Malawi possible today.” said Minister of Transport and Public Works, Hon. Jacob Hara.
The EU has been involved in supporting the local transport sector for some time. This grant comes on top of an ongoing EUR 35 million programme to rehabilitate rural roads in 12 districts throughout Malawi.
“The European Union is a key partner of Malawi and pleased to support the most important transport investment in the country. Upgrading the M001 road will accelerate economic development across the country and provide new opportunities for agriculture. We are pleased to provide EUR 43 million of grant financing, through the EU Africa Investment Platform, for the project alongside national, European and international partners.” said Ambassador Rune Skinnebach, Head of the European Union Delegation to Malawi.
Improving road connections across Malawi
The investment programme to upgrade the M001 road includes rehabilitation of the main road connection to Tanzania, which carries one fifth of national exports and is a key link between eastern Zambia and the Indian Ocean port of Dar es Salaam.
Overall, more than 346 km of road will be transformed, including stretches between Karonga-Songwe (46 km), Kacheche-Chiweta (66.5 km) and Mzimba Turn Off – to Kamuzu International Airport turn off (234km). The Karonga - Songwe portion of the road carries 22% of Malawi’s foreign trade to Songwe, the border point with Tanzania.
All these priority routes are located in agricultural areas and the upgraded road will directly benefit local communities.
International and national financing for strategic road
The European Investment Bank has provided a EUR 95.5 million 20-year loan complemented by a European Union EUR 43.1 million grant, under the EU Africa Investment Platform, for the M001 road upgrade programme, the Government of Malawi will contribute EUR 20 million in addition to the tax exemptions applicable under the Cotonou Partnership Agreement of the ACP-EU. Some EUR 4.5 million of the EU grant funding is earmarked for the technical assistance, to support road construction and monitoring once construction is complete.
Financing for the Karonga-Songwe section of the M001 road project was provided by the World Bank. The M001 road upgrade program will be implemented by the Roads Authority, under the supervision of the Ministry of Transport and Public Works. Construction is expected to be completed by July 2024.
Improving roads connections across Africa
Over the last decade, the European Investment Bank has provided more than EUR 21 billion for public and private sector investment across Africa, including EUR 2.2 billion for road projects. This has included supporting the improvements to the Great North and Great East Roads in Zambia, national roads in Madagascar, Senegal and Uganda, construction of the new Kampala by-pass and motorways and rural roads in Morocco, Tunisia and Egypt.
Background information
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