MIL-OSI Banking: African Development Bank Group Board approves $217 million to finance vital Horn of Africa road project

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Source: African Development Bank Group

The Board of Directors of the African Development Bank Group has approved $217 million in loans to fund a project that will improve road transport services in Kenya’s northeastern region.

The loans comprise $75 million from the non-concessional window of the Bank Group and $142 million from the concessional lending division, known as the African Development Fund. The Kenyan government will contribute $6.3 million. The $223.3 million project covers the 740 km Isiolo-Mandera corridor and will enhance regional integration and trade between Kenya, Somalia, and Ethiopia. About 867,000 people who reside around the project area are expected to benefit from the initiative.

The road network, including the 142 km El Wak-Rhamu stretch, is one of the four priority corridors identified under the Horn of Africa Initiative, driven by the governments of Kenya, Ethiopia, Somalia, Sudan, Eritrea and Djibouti. The initiative is supported by the African Development Bank, World Bank and European Union.

The road project is expected to contribute to the socio-economic development of communities along the corridor, which is characterized by high poverty levels and prone to insecurity. According to World Bank estimates, 70 percent of the residents in the project area live in poverty, with poor access to basic services. This is exacerbated by frequent droughts that pose a threat to livestock, the main source of food and income here.

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