ADB’s $240m loan to help Kazakhstan modernize transport, improve connectivity

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ASTANA (TCA) — The Asian Development Bank (ADB) has approved a $240.3 million loan to help Kazakhstan modernize its transport system. Improved transport connectivity will help increase trade links between Kazakhstan and the markets in East Asia, the Caspian Sea region, and further to Europe, ADB’s Country Office in Kazakhstan said on August 29.

“Improved connectivity and mobility will play a catalytic role in the sustainable social and economic development of the country, open new opportunities for trade and investment, and support poverty reduction by raising local living standards,” said Zheng Wu, a Senior Transport Specialist with ADB’s Central and West Asia Regional Department.

The project will reconstruct and upgrade about 299 km of a deteriorated section of the Aktobe–Makat road in the western part of the country, and introduce a modern transport information system to increase road traffic safety and logistics effectiveness. It will also establish fast transportation links connecting Astana and Aktobe with the major oil and mineral–rich city of Atyrau, and the country’s only international commercial seaport in Aktau.

The road is part of the Trans-Caspian Sea Transit Corridor Baku–Astrakhan–Atyrau–Aktobe–Aktau–Turkmen border, which connects Kazakhstan with Azerbaijan and Europe in the West, with the Russian Federation in the North, and with Turkmenistan in the South. It also links to the Central Asia Regional Economic Cooperation (CAREC) Corridor 1b at Aktobe and Corridor 6a at Makat, providing further access to China and Southeast Asia.

Kazakhstan, rich in natural resources such as oil, gas, and metal, has huge potential for economic development but infrastructure constraints result in significant travel time and cost, and hinder access to foreign markets. A recent study estimated that transport costs account for 8%–11% of the final cost of goods—almost double the cost for most industrialized countries.

The decline of global oil prices since 2014 and lower external demand has encouraged the government to create a favorable environment for business-driven regional economic development. The priorities are modernizing the transport system to increase the flow of freight through the country, improving domestic transport links of strategic importance and regional impact, connecting the capital Astana and other urban centers, and developing infrastructure centers in regions.

Sergey Kwan

TCA