The move comes a month after eight countries in and around Central Asia agreed to an US$18 billion strategy to improve roads, airports, railways, and ports to make the region a vital transit route for trade between Europe and Asia – a modern-day equivalent of the ancient Silk Road.

The new loan will be used to upgrade two sections of the A-380 highway, a 1,204 kilometer road that runs from the Kazakh border in Uzbekistan’s north toward Afghanistan and Turkmenistan in the south.

The first road section to be reconstructed is 40 kilometers long in Kungrad District of the Republic of Karakalpakstan. The second is 91 kilometers long in the Khazarsp District of Khorezm Province and Tortkul District of the Republic of Karakalpakstan. International competitive bidding for the civil works will be applied for the first time.

"Upgrading the road will cut travel times and reduce transport costs," said Olly Norojono, a Transport Economist with ADB. "This highway is essential for enhancing regional integration and economic growth in Central Asia."

Part of the loan will also be used to help the Government of Uzbekistan strengthen the operation and maintenance of the country’s road network by improving road-sector institutions, planning and budgeting, as well as the provision of road-building equipment.

Insufficient maintenance in the past has led to the deterioration of roads. While the Government has made progress in fixing the problem, the budget for maintaining primary roads hasn’t been sufficient.

The total cost of highway upgrade and strengthening the road sector capacity is US$173.5 million. In addition to the US$75.3 million provided by ADB, the Government is investing US$98.2 million.

The strategy to invest in transport corridors in and around Central Asia was agreed at a meeting in Dushanbe on 3 November of the Central Asia Regional Economic Cooperation Program, which is sponsored by ADB. In addition to Uzbekistan, Afghanistan, Azerbaijan, People’s Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, and Tajikistan have agreed to the strategy.