JSC “Kazakhstan Temir Zholy” balance sheet restructuring loan

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 47598

Status Complete

Location

Kazakhstan

Business Sector

Transport

Notice Type

State

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 47598

Status Complete

Location

Kazakhstan

Business Sector

Transport

Notice Type

State

Environmental Category

Approval Date

22 Jul 2015

Disclosure date

10 Apr 2015

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Translated version of this PSD: Russian

Project description and objectives

The EBRD is considering
providing a senior loan of up to KZT 37.2 billion (EUR 185 million equivalent)
to restructure balance sheet of JSC National Company “Kazakhstan Temir Zholy”, Kazakhstan’s
National Railways Company (KTZ). Funding will be used to repay maturing in May
2016 Eurobonds. The loan will be provided in local currency, assisting KTZ with
creating natural currency hedge, aligning currency of its credit portfolio and
revenue streams

Transition impact

Transition impact is expected to be derived from the following:

Frameworks for markets

The Bank will make use of this opportunity to take stock of the reform progress and agree on the revised reform agenda and timetable

Demonstration of Successful Restructuring –Financial Restructuring

This will include (i) assisting with balance sheet restructuring to make it more sustainable; (ii) implementation of the new tariff methodology and (iii) implementation of Public Service Obligations services for railway passenger transportation

Demonstration of Successful Restructuring –Institutional Restructuring

The Project will focus of assisting KTZ and the Government with implementation of proposed corporatisation/privatisation of freight operations in a timely manner.

The expected transition impact rating is ‘strong to good’.

The client

KTZ (100 per cent owned by Samruk-Kazyna) is a vertically integrated company that
manages railway infrastructure and operates freight and passenger train services. KTZ plays a key role in the Kazakh national transport sector with leading position in freight and passenger traffic.

EBRD finance

Senior loan of up to Tenge 37.2 billion (EUR 185 million equivalent).

Total project cost

KZT 65 billion (EUR 324 million equivalent)

Environmental impact

Categorised C (2014 ESP). This fifth EBRD project with KTZ provides general corporate finance for restructuring of KTZ’s current debt liabilities and will not
involve any capex investments. Therefore, the project will have no adverse future

environmental and social impacts. The environmental and social due diligence (ESDD) will build on the ESDD undertaken for the previous projects and review the implementation of corporate E&S management systems and the existing ESAPs by KTZ and its subsidiaries such as KTT and KTZE.

The review will focus on the progress in finalising and implementation of the KTZ retrenchment plan, as well as specific plans for rolling out ESAP commitments to the subsidiary level operations on the ground. ESDD will also review the status of the expansion plans for KTZ/KTZE operations into logistics business under bond financing, clarification of the extent of implementation of the previously agreed E&S Procedures for new investments. The Bank is in the process of providing a TC for a Corporate Development and Environmental Capacity Building Programme for KTZE to assist KTZE in capacity building to assess and manage environmental and social risks in line with EBRD’s Performance Requirements (PRs), as well as strengthen monitoring and supervision of KTZ and KTZE’s performance on E&S matters.

The Bank will continue closely monitoring performance of KTZ and its subsidiaries and implementation of the ESAPs through reviewing annual reports provided by the Company and carrying out monitoring visits, when deemed necessary. This section will be updated upon completion of the ESDD.

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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