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TCA Interviews

Interview: How Kazakhstan Plans to Finance Its Next Railway Expansion

Kazakhstan is preparing for the next phase of its railway expansion. Alongside the major lines already under construction, the authorities are considering new routes and upgrades to existing sections intended to increase network capacity, serve industrial producers, and accommodate growing transit volumes. Implementing those plans will require substantial investment. Some projects may be financed by the state, while others are expected to rely on private capital, international financial institutions, and public-private partnerships. Kazakhstan’s Vice Minister of Transport, Zhanibek Taizhanov, spoke to The Times of Central Asia about construction deadlines, proposed new routes, and whether the country’s railway priorities are beginning to shift. TCA: Kazakhstan is building several major railway projects at the same time. When are the main lines expected to be completed? Zhanibek Taizhanov: The Moyynty-Kyzylzhar and Darbaza-Maktaaral railway lines are scheduled to enter operation by the end of this year. Construction of the Bakhty-Ayagoz line is expected to be completed by the end of 2027. In addition, trial train operations began on the Almaty bypass line in December last year. The authorities previously instructed the Transport Ministry and Kazakhstan Temir Zholy to launch the Moyynty-Kyzylzhar and Darbaza-Maktaaral lines by the end of 2026 and commission Bakhty-Ayagoz by the end of 2027. TCA: The government has called for preparations for the next stage of railway development. Which projects is the ministry considering, and what needs are they intended to address? Zhanibek Taizhanov: The Ministry of Transport, together with Kazakhstan Temir Zholy and the relevant government agencies, has been tasked with examining the next phase of railway infrastructure development, taking into account projected growth in freight flows, transit traffic, and the economy’s long-term needs. The projects under consideration include the construction of second tracks on the Arys-Kazaly section. The project is intended to increase the capacity and carrying capability of one of the key sections of the railway network, support sustained freight growth, and improve transport services for the country’s southern and western regions; construction of the Inderbor-Uralsk railway to improve regional connectivity, make freight transportation more efficient, and create additional opportunities for the industrial and logistics development of western Kazakhstan; modernization of the Kyzylzhar-Shubarkol-Yesil section, which would increase the capacity of a route used to transport coal and mining products and improve logistics for industrial enterprises; modernization of the Inderbor-Makat railway section to improve the transportation of oil, gas, and industrial cargo and develop transport infrastructure in the western regions; and development of railway infrastructure in the Karagaily industrial zone in the Karaganda Region to serve existing and planned production facilities, attract investment, and support the region’s industrial development. These projects are being examined because the railway network needs to develop in step with growing domestic, export, and transit freight volumes. Their implementation would increase infrastructure capacity, meet the needs of industry and logistics, and create additional conditions for the socioeconomic development of the regions. TCA: Existing projects largely expand transit and export routes, while many of the proposed lines are linked to industrial enterprises. Does this signal a...

Transport and Logistics

Uzbekistan’s Logistics Push Aims to Turn Transit Growth into Revenue

Tashkent is trying to turn a fast rise in transit cargo into a larger role in Eurasian trade. President Shavkat Mirziyoyev reviewed proposals on July 1 to expand logistics centers, modernize border infrastructure, digitalize warehouse and customs systems, and attract private investment into transport hubs. Transit cargo through Uzbekistan reached 15.3 million tons in 2025, up 54% from 2021. Yet Uzbekistan's share of China-Europe transit freight remains only 1-2%. Annual China-Europe trade is estimated at $800 billion, while freight traffic reaches 120-150 million tons. Officials estimate that an extra 15-20 million tons of international transit cargo could bring $400-600 million in added revenue, attract $3 billion of investment into logistics centers and terminals, and create 50,000 permanent jobs. The logistics push comes as Uzbekistan’s trade base becomes larger and more exposed to transport costs. Uzbekistan's foreign trade turnover reached $81.2 billion in 2025, up 20.7% from 2024, with exports at $33.8 billion and imports at $47.4 billion. The 2026 figures are more uneven. In January-May, turnover rose 3.7% year on year to $32.8 billion, but imports climbed 20.8% while exports fell 15.5%. Gold sales drove much of the export decline. Excluding gold, goods exports grew 29.4%, which gives Tashkent a clear reason to cut freight costs, speed up customs clearance, and expand container capacity. Uzbekistan already has about 4,000 kilometers of international transit corridors and a 4,700-kilometer railway network, but officials say the system remains too thin for the cargo volumes Tashkent wants to attract. Modern transport and logistics centers and dry ports are being developed in Tashkent, Navoi, and Namangan, while Navoi Airport serves Eurasian cargo routes. The July 1 proposals show how much still needs to change. Uzbekistan has 27 logistics centers that meet international standards, with total capacity of 27.2 million tons, but only one is in the highest category. Class A automated warehouses meet only 10-15% of demand. Officials also cited weak capacity at many border checkpoints, refrigerated and customs warehouse shortages, low containerization, and poor digital links. The new plan would specialize six areas as logistics zones. Khanabad would handle China-linked routes toward the Caspian, Europe, Afghanistan, Pakistan, and Iran. Angren, Yangiyul, and Akhangaran would distribute transit and foreign trade cargo. Alat would support Middle Corridor routes, and Termez would focus on Pakistan via Afghanistan. Entrepreneurs who build logistics centers in these locations would be offered 50 hectares of land in each area. The government plans to allocate $200 million a year in concessional and low-interest credit lines, with the budget covering external infrastructure. Projects also include customs terminals and parking in Qibray and Termez, a rail border checkpoint in Khanabad, Yangiyul station expansion, and a Class A center in Akhangaran. Digital systems form another part of the package. The proposals call for terminal and warehouse management systems linked to the E-logistika platform. They also include online monitoring, license plate recognition, electronic vehicle registration, and one-stop border clearance. Customs duties and certification rules may be eased for imported warehouse equipment, cargo-handling machinery, spare parts, and...

Middle Corridor

Kazakhstan and European Partners Announce $462 Million Middle Corridor Agreements in Brussels

Kazakhstan and its European partners unveiled four transport deals worth a combined $462 million on June 22, giving President Kassym-Jomart Tokayev’s visit to Belgium a concrete outcome on Eurasian connectivity. The package was presented at the business conference “Strengthening EU-Kazakhstan Connectivity: Perspectives and Strategic Potential of the Middle Corridor.” The Trans-Caspian International Transport Route, also known as the Middle Corridor, is a multimodal transport corridor linking China and Europe through Central Asia and the South Caucasus, offering an alternative to routes that pass through Russia. The conference was organized by Kazakhstan Temir Zholy, Kazakhstan’s national railway operator, and brought together representatives of the European Commission, the European Parliament, international financial institutions, and major European transport and logistics companies, including DHL Global Forwarding, Alstom, DB Cargo, HHLA International, Rhenus Logistics, Hellmann Worldwide Logistics, Ahlers Logistics, and A.P. Moller-Maersk. The conference focused on strategic development priorities for the Middle Corridor, including increasing the capacity of the Trans-Caspian International Transport Route, modernizing railway, port, and terminal infrastructure, digitalizing logistics processes, and developing sustainable supply chains across Eurasia. The four documents, presented as a $462 million package, aim to strengthen transport connectivity between Europe and Asia and further develop the Trans-Caspian route. Kazakhstan’s Ministry of Transport and SITA, a global provider of information and telecommunications solutions for the aviation industry, signed a memorandum of cooperation on the digitalization of state airports, including biometric identification. National road operator QazAvtoZhol and the European Bank for Reconstruction and Development signed a loan agreement for the Aktobe-Ulgaisyn road project. The Aktobe-Ulgaisyn project covers a 234-kilometer section of the Western Europe-Western China corridor and is intended to improve regional and transit connectivity. KTZ Express, a subsidiary of Kazakhstan Temir Zholy, signed an agreement with Midia Marine Terminal for a joint project in Romania’s Port of Midia. The project aims to expand Black Sea route infrastructure and improve cargo handling efficiency. In addition, KTZ Express and A.P. Moller-Maersk agreed to cooperate on container shipping along the Trans-Caspian International Transport Route and to attract additional cargo volumes to the route. Speaking at the conference, Kazakhstan’s Deputy Foreign Minister Arman Issetov stressed that the route has evolved far beyond a traditional transit corridor and is increasingly becoming a major geo-economic project serving the interests of both Central Asia and Europe. He said that amid shifting global supply chains and growing demand for reliable and diversified transport routes, Kazakhstan continues to advocate for open, resilient, and mutually beneficial connectivity between East and West. Particular attention was given to the complementarity between the Trans-Caspian International Transport Route and the European Union’s Global Gateway initiative. Under this strategy, the Trans-Caspian corridor has become a priority for strengthening sustainable connectivity between Europe and Central Asia, with Kazakhstan playing a central role as a major Eurasian transport hub. At the Third National Workshop of the Trans-Caspian Transport Corridor Coordination Platform in Astana on June 3, EU Ambassador to Kazakhstan Aleška Simkić said: “Through our €30 million Trans-Caspian Transport support program and other projects, the European Union supports...

IPO

IPO as a Lifeline: Who Will Pay for Kazakhstan Railways’ Growing Debt?

The planned IPO of Kazakhstan’s national railway operator, Kazakhstan Temir Zholy (KTZ), once presented by the authorities as one of the largest public offerings in Central Asia, is increasingly being viewed as an attempt to stabilize the company’s balance sheet amid rapidly rising debt. The share sale, expected in late 2026, may turn out to be less a growth story than a mechanism for refinancing the obligations of the state-owned carrier. During parliamentary hearings on April 24, company executives acknowledged that one of the key objectives of the IPO is to raise funds to service KTZ’s growing debt burden. According to official company and government data, KTZ’s nominal debt has risen sharply. It stood at about $5.7 billion in early 2024, and roughly $8 billion by 2025. By April 2026, it had reached 4.7 trillion tenge, or about $10.4 billion. The increase reflects heavy borrowing for rolling stock, infrastructure modernization, and the expansion of Kazakhstan’s transit capacity, including projects linked to the Middle Corridor. It also reflects the cost of maintaining below-market tariffs for socially important domestic freight. Kazakhstan’s Supreme Audit Chamber warned as early as 2024 about risks related to the company’s financial sustainability. However, the authorities and KTZ management argue that large-scale borrowing was necessary to prevent an infrastructure crisis. According to official estimates, borrowed funds include about $4.9 billion for renewing rolling stock, including locomotives and railcars, and about $2.3 billion for modernizing railway infrastructure. The currency structure of the debt represents an additional vulnerability. More than half of the company’s obligations are denominated in foreign currencies, making KTZ highly sensitive to fluctuations in the tenge. Any weakening of the national currency automatically increases debt servicing costs and reduces the operator’s profitability. Potential investors face another challenge: historically, KTZ has served not only as a commercial company but also as an instrument of state social policy. A substantial share of revenues from China-Europe transit freight is used to subsidize unprofitable domestic passenger transport and the transportation of socially important goods within Kazakhstan. This cross-subsidization mechanism limits the company’s ability to generate free cash flow. Grain transportation under regulated tariffs alone generated losses of approximately $95 million (44 billion tenge) for KTZ in 2024. In an effort to improve the company’s attractiveness ahead of the IPO, KTZ has initiated large-scale tariff increases for mainline railway services. Beginning in April 2026, transportation tariffs for coal, grain, and iron ore were doubled. However, the move risks adding to costs in Kazakhstan, where railway tariffs directly affect the cost of food, electricity, and industrial goods. Annual inflation stood at 12.2% in January 2026, adding to concerns that higher railway tariffs could feed into wider price pressures. Additional inflationary pressure may come from the expiration of the government’s moratorium on utility tariff increases, after which household utility bills in some regions could rise by 10-20%. Against this backdrop, analysts do not rule out a return to tighter state regulation of tariffs, a development that could once again limit the ability of natural...

EBRD

EBRD Invests $125 Million in Kazakhstan Railway Operator Eurobond

The European Bank for Reconstruction and Development is investing up to $125 million in a Eurobond issue by Kazakhstan’s national railway operator, Kazakhstan Temir Zholy (KTZ). The bond, with a total value of up to $1 billion, was listed on the London Stock Exchange, Kazakhstan Stock Exchange, and Astana International Exchange. The EBRD’s investment will help modernize passenger stations across Kazakhstan, supporting improvements in safety and operational performance. The upgraded stations are expected to offer higher throughput capacity, modern lighting, and significant enhancements for passengers with disabilities. According to the Kazakh Ministry of Transport, a large-scale reconstruction and modernization program covering 124 railway stations nationwide began in 2025. The initiative aims to improve convenience and accessibility for all passengers, including those with disabilities, and to bring Kazakhstan’s railway infrastructure in line with international quality and safety standards. Additional infrastructure upgrades financed by the bond will take place along the Trans-Caspian Corridor and are expected to support more sustainable rail transportation between Europe and Asia. The EBRD will also mobilize technical cooperation funds to help KTZ adopt international standards in passenger rail services, including measures to strengthen cybersecurity. KTZ owns and operates a 16,400-kilometer railway network and manages more than 1,700 locomotives, 46,800 freight cars, and 2,300 passenger cars. In the first quarter of 2026, KTZ transported approximately 3.2 million passengers. KTZ also transported 64.5 million tons of cargo in the first quarter of 2026, an increase of 360,000 tons compared to the same period last year. Domestic shipments accounted for 40.8 million tons, while exports totaled 23.7 million tons, up 2.2%.

Railways

Istanbul Strait Rail Project to Boost Trade Along Trans-Caspian Transport Route

On March 31, the World Bank approved a $2 billion loan for the Istanbul North Rail Crossing Project (INRAIL), aimed at strengthening railway connectivity across the Istanbul Strait (Bosphorus) and reinforcing Türkiye’s role as a key logistics hub linking Europe, Asia, and the Middle East. With the Baku-Tbilisi-Kars railway, Turkey serves as a key node in the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. The route connects China and Europe via Kazakhstan, the Caspian Sea, the South Caucasus, and Turkey. Turkey's major rail corridors passing through Istanbul, including the Middle Corridor, the Iraq Development Road, and the Turkey-EU corridor, are essential for international trade but currently face a significant bottleneck at the Bosphorus. INRAIL will involve the construction of a 127-kilometer electrified, high-capacity railway line providing a new overland rail crossing of the strait. The project will utilize the rail-ready Yavuz Sultan Selim Bridge and bypass central Istanbul, increasing both freight and passenger capacity while reducing logistics costs and improving reliability across national and intercontinental transport corridors, including the TITR. Once operational, rail freight capacity across the Bosphorus is expected to increase from approximately 3 million tons per year to as much as 50 million tons, significantly improving transit times, reliability, and predictability for freight operators. “By removing a critical rail bottleneck at the Istanbul Strait and enhancing the resilience and efficiency of rail infrastructure, Turkey is boosting its competitiveness and reinforcing its role as a logistics hub,” said Humberto Lopez, World Bank Country Director for Turkey. “INRAIL will also generate benefits for the wider region by connecting to international corridors such as the Middle Corridor and the Development Road, facilitating trade between Europe, Central Asia, and the Gulf.” The project aligns with Kazakhstan and Türkiye’s broader efforts to develop the Middle Corridor. In July 2025, Kazakhstan’s national railway operator, Kazakhstan Temir Zholy (KTZ), and TCDD Taşımacılık A.Ş. signed a cooperation agreement to enhance freight transportation along the TITR. The agreement aims to improve the route’s efficiency and competitiveness by launching regular rail services between Kazakhstan and Turkey, increasing freight volumes along the Baku-Tbilisi-Kars railway, and expanding cargo flows between China and Europe. KTZ has also held discussions with Mersin International Port, part of PSA International, on expanding cooperation to strengthen the Middle Corridor and develop more efficient multimodal logistics links between Asia and Europe. KTZ Chairman Talgat Aldybergenov reaffirmed both sides’ commitment to ensuring stable freight volumes and highlighted Mersin’s role as a strategic transshipment hub for the corridor. To further strengthen the logistics chain, Kazakhstan has proposed leveraging the potential of KPMC, a joint venture between KTZ and PSA International, which is already involved in developing multimodal services along the Xi’an-Istanbul route.