The European Bank for Reconstruction and Development has teamed up with Kazakhstan’s railway authorities with an accord to promote energy efficiency activities across the country’s railways network.
A Memorandum of Understanding with railway group JSC National Company Kazakhstan Temir Zholy, KTZ, was signed on the eve of the EBRD’s 20th Annual Meeting in Kazakh capital Astana committing both parties to increase their cooperation to make the railways more energy efficient.
By the end of this year, a joint working group will come up with an investment programme to implement energy efficiency priorities, cutting the national railways’ carbon footprint by reducing energy consumption and CO2 emissions.
“Energy efficiency is potentially the most effective way to reduce carbon emissions in short to medium term. We are proud to support Kazakh Railways in making improvements in energy efficiency which will strengthen the company’s economic competitiveness and energy security. It will also help the national railways to become the country’s leader in promoting energy efficiency,” EBRD President Thomas Mirow said during the signing of the Memorandum.
KTZ is among the largest users of energy in the country. The EBRD confirmed its willingness to support the modernisation of the railways infrastructure by providing relevant financing and technical cooperation assistance. The Bank will consider providing long term financing later this year in the range of US$ 100-200 million to support the energy efficiency investment programme.
Kazakh Railways operates one of the world’s largest railway networks. With Kazakhstan’s vast territory and no significant water transport alternative, it also plays a key role in the national transport sector, accounting for some 59 per cent of all freight movements and 11 per cent of passenger traffic.
The EBRD is committed to addressing the twin challenges of energy efficiency and climate change in the Bank’s region – which covers some of the world’s most energy intensive economies, including Azerbaijan, Ukraine, Uzbekistan as well as Kazkahstan itself.
Since the Bank launched its Sustainable Energy Initiative (SEI) in 2006, it has already invested €6.6 billion through 369 SEI projects covering 29 transition countries. It is estimated that expected CO2 emission reductions from the EBRD’s completed SEI projects will reach 39.6 million tonnes.
The MOU signed today enhances the bilateral cooperation between the EBRD and Kazakh Railways. Over the past few years, the EBRD has signed three transactions with KTZ for over US$ 350 million to modernise its fleet and improve the country’s overall transit potential. This complements a US$ 180 million loan to the government to rehabilitate the Western China-Western Europe corridor.
In line with its current investment strategy for Kazakhstan, the EBRD focuses on strengthening the country’s financial sector, promoting economic diversification and innovation, developing infrastructure, addressing energy imbalances and improving energy efficiency.
Since the beginning of its operations in Kazakhstan, the EBRD has invested over €2.8 billion in over 130 projects in various sectors of the Kazakh economy, mobilising additional investments in excess of about €6 billion, with about 70 per cent of the projects’ being investments into the development of the country’s private sector.