Press Release

MALAWI TAKES US$7 MILLION OPEC FUND LOAN TO REHABILITATE KEY ROAD

04/2005 January 12, 2005, Vienna, Austria

The OPEC Fund for International Development today signed a US$7 million loan agreement with the Republic of Malawi to help finance rehabilitation of the Zomba-Jali-Chitakale Road, an important link that passes through key agricultural areas. Its completion will facilitate the transport of inputs and produce, and allow the surrounding population improved access to marketplaces and social services.

Malawi's tropical climate and fertile soils provide an ideal growing environment for cash crops, as well as catering to the food needs of its 10.7 million-strong population. Being a landlocked country, road transportation plays a vital role in the movement of both domestic supplies and exports. The quality of the 15,541 km network, however, is poor, with only around 3,600 km paved. The 102 km-long Zomba-Jali-Chitakale stretch, located in the southeast, is primarily gravel-surfaced and is badly deteriorated due to the lack of drainage facilities and systematic maintenance. This situation hinders economic activity among the area's 1.2 million inhabitants, most of whom rely on agriculture for their livelihoods.

Under the project, these shortfalls will be addressed by upgrading the road to asphalt standard. Drainage structures will be rebuilt or replaced, and bridges reconstructed where needed. Road safety will be enhanced through the installation of road markings and signs, and new culverts will be constructed. The newly-renovated stretch is expected to benefit both urban and rural populations by facilitating the international and interregional exchange of goods.

This is the seventh development operation to be undertaken by the OPEC Fund in Malawi. Earlier loans helped finance projects in the transportation and health sectors. In addition, the country was a beneficiary of the Fund's Food Aid Special Grant Account and of the OPEC Fund's initiative against HIV/AIDS in Africa.

Today's agreement was signed in Vienna by H.E. Mr. Gilton Chiwaula, the Malawian Ambassador to Germany and by H.E. Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.

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