Gaborone — The World Bank has loaned Government of Botswana US$186 million (P1.2 billion) for its Integrated Transport Project, which is meant to ease traffic congestion, enhance regional integration and spur economic growth.

The project, which will see new links between Botswana and neighbours South Africa, Zambia and Namibia through rail and road and is estimated to cost US$385.12 million (P2.6 billion) in total. Speaking at the loan agreement signing ceremony on Monday, the Minister of Finance and Development Planning, Kenneth Matambo, said the OPEC Fund for International Development (OFID) has also pledged US$40 million (P267.6 million) whilst the Government of Botswana will provide the balance of US$159.12 million (P1.06 billion).

"These project is a regional integration vision for Botswana, with emphasis on a regional dimension of the transport sector. It will spur economic growth in Botswana and the region at large and also reduce traffic congestion in the country," Matambo said.

The project consists of capacity building and institutional strengthening which involves provision of technical advisory services to undertake a number of pre-investment activities.

These include studies for three new railway links of Mmamabula-Ellisras for the transportation of coal from the proposed Mmamabula Power project to South Africa; Mosetse-Kazungula, which links the north east Botswana to Zambia; and Trans-Kalahari, which links the country to Namibia.

World Bank country director for Botswana, Lesotho, Namibia and South Africa Ruth Kagia said at the ceremony that the loan for the transport project is meant to help Botswana diversify its economy away from diamonds.

"Sectors like agriculture and tourism cannot prosper without good transport.

Transport is also a platform that can help spur economic development, competitiveness and promote trade," she said.

The Bank is also sponsoring the ongoing Botswana National HIV/AIDS Prevention Support for US$50 million (P334.5 million) and recently the Bank has made a commitment of US$136.4 million (P912.5 million) for the Morupule B Power Generation and Transmission project.

The World Bank, which recently established a country liaison in Botswana has also pledged technical assistance of P1.6 million to Government for an institutional reform of the water resource management plan.

The World Bank recently approved a Country Partnership Strategy (CPS), which outlines a programme of support for Botswana for a five-year period, covering 2008/09 to 2012/13.

"This is the bank's first strategy for Botswana that comes in response to the increased interest from government for a scaled up World Bank Group's programme that has been rather limited over the past decade and a half," Matambo said. Some of the completed projects implemented through the bank's assistance are in education, land management, water, roads, and urban infrastructure sectors to the tune of an estimated US$296.5 million.

Botswana, which did not seek budget support for the past 17 years, is one of the worst affected by the global downturn because of a collapse in diamond sales.

The downturn forced the country to borrow US$1.5 billion from the African Development Bank (AfDB) to cover this year's budget deficit.