Azerbaijan’s ministry of transport has received a US$500mn loan from the Asian Development Bank (ADB) for the upgrade of a road that links the country with Russia and Iran.

The loan will be released in two tranches of US$250mn each and will cover about 80% of the total project cost, with the government of Azerbaijan providing the balance. The funding will be used to build a 63-km section of motorway along a route running from Azerbaijan’s border with Russia down to its border with Iran.

The ADB expects the project to expand trade, as well as improve access to services for rural communities.

“Right now, much of the country’s road network is in bad shape, which leads to long travel times, traffic accidents, and high transportation costs,” says Balabhaskara Reddy Bathula, senior transport specialist at the ADB. “Upgrades along this vital trading link for Azerbaijan will support growth and job opportunities, as well as make it easier for rural communities to access essential social services.”

The programme, which is part of the government’s broader US$2.6bn national road network development plan, is expected to run from October 2012 to June 2021.