The document was signed by Mozambican Planning and Development Minister Aiuba Cuereneia and the World Bank representative in Mozambique, Michael Baxter.
This money will also be used to strengthen the Mozambican government's institutional capacity to manage transport and to promote the use of local resources in road construction and maintenance.
Speaking after the ceremony, Baxter said that this loan is part of the World Bank's policy to create good conditions on Mozambican roads in order to facilitate marketing and the circulation of people and goods.
For his part, Cuereneia said that the agreement represents an important step towards the government's objective of reducing transaction costs.
The money comes from the World Bank's soft loans agency, the International Development Association (IDA). It is payable over 40 years at an interest rate of one per cent.
The agreement was signed after the appointment last week of a new board of directors and a new chief executive officer of Mozambique's National Roads Authority (ANE).
Francisco Pereira, chairperson of the government's Road Fund, cited in the independent newsheet "Mediafax", said that the World Bank loan would be disbursed in six monthly instalments.
The Road Fund expected to receive the first instalment in September.
He made it clear that the restructuring of the ANE had been one of the conditions for the agreement.
Pereira said that other donors, such as the European Union, were also now beginning to release funds for the road programme.
He added that, although most donors were supporting the Integrated Road Sector Programme (PRISE) which envisages that, up to 2010, all funds for roads will be channelled through the Road Fund, the United States and Japan still preferred to give their money directly to projects.
The Road Fund, he said, coordinated with the Americans and Japanese via the ANE. Japan is currently planning to invest over 20 million dollars in bridge construction in northern Mozambique.
SOURCE: AIM
