The European Bank for Reconstruction and Development (EBRD) has approved a sovereign loan of $137m to upgrade a major road in Mongolia.

As part of the initiative, the financing will be used to upgrade the 202km road between the country’s capital Ulaanbaatar and Darkhan, the third largest municipality in the country.

The infrastructure project will see the addition of two new lanes adjacent to the existing lanes of the Ulaanbaatar-Darkhan motorway, which is said to be one of the busiest roads in Mongolia.

Built during 1943 and 1974, it was not well maintained and now 90% of the road requires refurbishment.

For this project, the Ministry of Road, Transport and Development of Mongolia will provide investment while the technical cooperation funds will be offered by EBRD.

The EBRD loan is expected to improve road safety, as well as create new economic benefits for the country and region. The project will see flood protection installations, as well as bridge rehabilitation and improved road conditions.

Once completed, the project is expected to improve the regional integration and international trade between Mongolia, China and Russia. Sorry, there are no polls available at the moment.

Funds provided by EBRD complement previous work carried out on the same motorway by the Asian Development Bank (ADB).

EBRD began its Mongolian operations in 2006. Since then, the bank is said to have invested more than €1.7bn in 104 projects across the country.

Last December, EBRD provided a €259m loan to upgrade transport infrastructure in Belarus.

Of the total loan amount, €126m was allocated for 12 bridge upgrades and €133m for the M3 motorway modernisation programme.