MALAWI – The European Investment Bank (EIB) and European Union confirmed support for refurbishing the principal road across landlocked Malawi after signing the EIB’s largest ever loan for investment in Malawi.
Once carried out, the road works are expected to reduce transport costs, cut travel time and facilitate exports.
Moreover, by upgrading the road to modern standards, significant improvements in safety for road users are also an expected outcome of the project.
European financing totalling US$153 million, in support of the US$211 million road rehabilitation programme, was formally agreed at a signature ceremony in Lilongwe
“This road project is crucial for our country because of its high economic importance for our national and regional economies as it provides an important international corridor between Malawi and neighbouring countries.” Said Minister of Finance, Economic Planning and Development, Hon. Joseph Mwanamvekha
“The bulk of our exports and imports are moved through this corridor. Unfortunately, the road corridor outlived its economic life and had deteriorated overtime, resulting in high maintenance and operating costs for users and this had made goods very uncompetitive due to high transport costs.
“As a country we cannot afford to just wait and see, therefore the loan from EIB and the Grant from the EU have come at the right time and will go a long way is helping us improve this road corridor.”
Minister of Transport and Public Works, Hon. Ralph Jooma, said, “Improving road links is crucial for the sustainable economic development of Malawi and the SADC region, as the M1 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 M1 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.”
Ambassador Sandra Paesen, Head of the European Union Delegation to Malawi, said, “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.”
The EIB loan, with a tenor of 20 years, was signed by Minister Joseph Mwanamvekha, CEO Emmanuel Matapa, CEO Stuart Malata and Diederick Zambon, responsible for European Investment Bank public sector financing in sub-Saharan Africa.