NUR-SULTAN
The European Bank for Reconstruction and Development (EBRD) has allocated a $240 million loan to Kazakhstan’s state-owned company KazAvtoZhol to finance a major road project in the Central Asian country to improve connections between regions.
The sovereign loan will be used for the reconstruction of a 204-km road section between the cities of Kyzylorda and Zhezkazgan, as well as construction of a 14.8-km bypass road around Kyzylorda, a city in south-central Kazakhstan, the bank said.
The road will improve passenger and cargo transport along the strategic route, which links western China with the Ural region of Russia.
The funds, which will help reconstruct approximately half of the road between the two cities, will be disbursed in the local currency, the tenge.
“At the EBRD, we believe that improved connectivity will provide new opportunities both for Kazakhstan and Central Asia. It is important for the country to create the right transport infrastructure to boost economic integration and post-COVID-19 recovery,” Odile Renaud-Basso, the EBRD president, said in a statement.
The Asian Development Bank will finance the reconstruction of the remaining road section.
KazAvtoZhol operates national highways across Kazakhstan and is a longstanding EBRD client.
The EBRD said last week it planned to finance projects in Kazakhstan worth $600 million before the end of this year to support sustainable development and economic growth.
The agreement was reached during recent talks between Kazakhstan’s Prime Minister Askar Mamin and EBRD President Renault-Basso.
The parties discussed the practical implementation of the framework partnership agreement signed in March between Kazakhstan’s government and the EBRD. The further expansion of the EBRD’s participation in infrastructure development, the implementation of the decarbonisation programme for the energy sector, the EBRD Green Cities projects, the modernisation of sewage treatment facilities, as well as support for small and medium-sized businesses were considered.
Earlier this month, the EBRD allocated a 4.9 billion tenge ($11.5 million) loan to improve the financial stability of the Mangistau regional electric grid company (MEDNC), a major distributor of electricity in western Kazakhstan.
The loan was allocated by MEDNC, the operator of 500 supply transformer substations and a network of power transmission lines with a length of more than 5,000 km, to restructure the balance sheet and increase resistance to exchange rate risks, as well as to minimise the impact of the COVID-19 pandemic.