Japan and ADB supports road upgrade to boost economic growth in Timor-Leste

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The Asian Development Bank (ADB) has approved a $49.65 million loan to upgrade 105 kilometers of road connecting the capital, Dili, and the second-largest town, Baucau, located on the north coast with cofinancing from the Japan International Cooperation Agency (JICA).

“The road network in Timor-Leste has been deteriorated due to lack of investment in maintenance and rehabilitation, constraining the country’s efforts to develop,” said Richard Phelps, Principal Infrastructure Specialist at ADB’s Timor-Leste Resident Mission. “Once upgraded, the road is expected to stimulate economic activity, particularly tourism, and create employment opportunities in the country.”

The project will make the roads safer and more resilient to climate change, while reducing travel time for the passenger and cargo traffic. It will also expand performance-based road maintenance practices by requiring contractors to maintain the road for three years after completing construction before handing over the responsibility to the government.

The ADB loan will have a 25-year term, with an annual interest rate of 3% during the 5-year grace period. The project is estimated to cost $126.58 million, with JICA providing $49.74 in cofinancing, and the Government of Timor-Leste contributing $27.19 million.

ADB will continue to work closely with JICA and the World Bank to support the ongoing implementation of the government’s road upgrading program. ADB is also supporting a national road safety action plan that will positively impact all donor-financed projects in Timor-Leste, including road safety awareness campaigns in roadside communities and schools.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members – 48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.

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