The World Bank Board has approved a $40m loan for the additional financing of the Lifeline Road Network Improvement Project (LRNIP) in Armenia.

Total financing of this project is $45m, $5m of which will be contributed by the Armenian Government. The World Bank loan is for 25 years, with a grace period of 14.5 years and at a floating interest rate.

LRNIP will further assist the government in its ongoing efforts to further improve accessibility to markets and social services through the rehabilitation of an additional 155km of the lifeline road network of the country, as well as create employment mostly for rural population.

"The sections of rehabilitated network help farmers and small businesses in rural areas to bring their produce to market more easily and at a lower cost."

The project will also help Armenia to strengthen the capacity of the ministry of transport and communication (MoTC) in road safety and management of the road network, including disaster risk preparedness.

World Bank country manager for Armenia Laura Bailey said: "As in the case of the original project, rehabilitation of additional lifeline roads would create temporary jobs in rural areas, and improve access to basic social services.

"It is vital that rural infrastructure is improved and maintained to promote agricultural trade, thus stimulating economic growth and local employment for the future."

The proposed additional financing will increase the total length of roads to 360km, of which 73km have already been rehabilitated.

Since the launch of the LRNIP in 2009, the previous series of projects, there has been a noticeable improvement in local employment, while journey time has declined on average by 40%.

The World Bank has already financed a total amount of $101.6m for the LRNIP, which has seen upgrading of 433km of lifeline roads across the region.

With the additional financing a new contingent emergency response (CER) sub-component will be introduced as a precautionary measure, that would allow the government and the bank to quickly channel the loan financing for emergency recovery efforts following an adverse natural or man-made disaster.

The funding will also be used for preparation of a social monitoring and impact evaluation study, preparation of a strategic development plan for the lifeline road network, and lifeline road network data collection for the road asset management system (RAMS).

The loan will also used to develop new road safety action plan and the implementation of selected activities; technical assistance with regard to disaster risk preparedness for the road sector; purchase of road laboratory equipment for determining the chemical composition of bitumen; and installation of road safety signs.

World Bank project team head Maria Carolina Monsalve said: "The sections of rehabilitated network help farmers and small businesses in rural areas to bring their produce to market more easily and at a lower cost.

"The project will also continue supporting the ‘Safe Village’ programme through small road safety civil works combined with awareness campaigns at community level.

"While four schemes were envisaged by the end of the original project, a total of thirteen have been completed to date."