The Asian Development Bank (ADB) has signed a $200m loan agreement with the Government of Sri Lanka to support the country’s rural road network.

The loan is the third of five tranches under the Second Integrated Road Investment Program, which ADB’s Board of Directors approved in 2017.

Set to deliver a total financing of $900m, the programme will rehabilitate and improve nearly 3,400km of rural access roads.

It also aims to improve 340km of national roads located in the Eastern, Northern, Uva, and Western provinces.

Due for completion in 2027, the programme will also improve the capacity of country’s road agencies on road safety, maintenance, research, road design, and construction.

ADB Sri Lanka country director Chen Chen said: “Economic growth is hindered by poor transport infrastructure, particularly some poorly maintained provincial and local roads.

“Access to markets and business opportunities, especially along agricultural value chains, can be significantly improved with better transport infrastructure and can serve as the key to poverty reduction and shared prosperity in rural areas.”

ADB said that the latest agreement underlines its commitment to support the upgrade of rural road connectivity in Sri Lanka.

Sri Lanka Treasury and Ministry of Finance secretary S R Attygalle said: “Providing all-weather road access will help link rural communities to socioeconomic centers in Sri Lanka, thereby enabling rural communities to reap and enjoy the fruit of inclusive economic growth.

“This is very much in keeping with the government’s development policy and will contribute to the government’s development plan.”

The project is expected to support the post-pandemic economic recovery across rural areas in the country by creating new job opportunities and by obtaining services from rural populations.

Last month, ADB agreed to provide a $484m loan for upgrading a road network in Tamil Nadu, India.