ASTANA (TCA) — The European Bank for Reconstruction and Development (EBRD) is continuing to promote modern infrastructure and regional connectivity in Central Asia by supporting a key road link in Kazakhstan.
The Bank is extending a US $103 million loan to Kazavtozhol, a national road operator, under the sovereign guarantee for the reconstruction and widening of an 80 km section of the so-called Center-South Road Corridor, leading from Astana to Almaty, between the villages of Kurty and Buribaytal in the Almaty region, the EBRD said.
The EBRD loan is part of a wider program to rehabilitate and upgrade a 228-km stretch of the highway which remains unmodernized.
The project was signed on February 18 by Bakhyt Sultanov, Minister of Finance of Kazakhstan, Sir Suma Chakrabarti, President of the EBRD, and Yermek Kizatov, CEO of Kazavtozhol, during a high-level Central Asia Investment Forum, organized by the EBRD and the Financial Times in Istanbul.
EBRD President Chakrabarti said: “The EBRD and Kazakhstan have recently agreed to further increase investment in infrastructure, and I am very pleased that only three months later we are signing this project, hopefully the first of many. The EBRD believes that modern road infrastructure in Kazakhstan is crucial for the country’s own economy as well as for boosting regional trade.”
Minister Sultanov added during the signing ceremony: “For Kazakhstan, the project we are signing today with the EBRD is much more than just a financing package. The project also envisages reforms in the road sector that will improve the entire sector’s financial sustainability.”
The full reconstruction of roads in the transport corridor connecting Astana and Almaty is part of Kazakhstan’s Strategic Plan 2020. The majority of roads within the Center-South Corridor have already been rehabilitated with only one remaining section still in need for reconstruction, restraining transit of goods and passengers. After the reconstruction, the highway between Almaty and Astana will be complete. The EBRD loan is part of a road rehabilitation program co-financed by the World Bank and the government of Kazakhstan.
As part of the project, the EBRD is also working with the government to explore more sustainable ways for road financing and maintenance such as the introduction of charges for heavy vehicles and the rollout of a tolling system in the country. Some of these innovations will play a key role in any future infrastructure PPP (public-private partnership) financing.
