‘Milestone Kazakh PPP’ event at EBRD attracts over 100 companies

By Svitlana  Pyrkalo

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The Ring Road will be located in the suburban zone of Almaty City, running through Karasai, Ili and Talgar districts of the Almaty Region.
The first public presentation of the Almaty Ring Road Concession project was held today in London, at the headquarters of the European Bank for Reconstruction and Development (EBRD). The presentation was led by representatives of the government of Kazakhstan, as well as by the International Finance Corporation (IFC), which acts as an advisor to the project, and the EBRD, which also provides advisory services and expects to become an investor in the project. The event, opened by Yerbolat Dosayev, the Minister of National Economy of Kazakhstan, was attended by over 100 representatives of international companies. 
The Almaty Ring Road Concession project, also known as BAKAD, is the first public-private partnership (PPP) structured under the new regulatory framework for such ventures. Substantial amendments to the existing legislation were passed in June 2014 as part of a new reform programme in Kazakhstan. In its current form, the legislation creates the necessary conditions that enable international investors to invest in PPPs such as BAKAD.
EBRD Managing Director for Infrastructure, Thomas Maier, said: “If successful, the Almaty Ring Road PPP will serve as a blueprint for new public-private partnerships in Kazakhstan in the transport infrastructure sector and possibly in other sectors that need to attract private funding. This will be the first PPP structure of its type not only in Kazakhstan but in whole of Central Asia.”
Janet Heckman, EBRD Director for Kazakhstan, added: “The EBRD is on track to invest a record US$ 750 million this year in Kazakhstan. But we offer more than financing. Innovative structures and projects such as BAKAD can really open up the industry to foreign investors.”
The Almaty ring road project involves the construction of a 66 km road around Kazakhstan’s largest city, under a 20-year concession contract. The contract is based on an availability payment scheme, which means a lower risk for the operator (compensation is based on the number of lanes available instead of the less-predictable traffic volume). The authorities selected this project as a pilot, to demonstrate the viability of PPP/concession funding structures in the Kazakh road sector. The government mandated the IFC advisory team and the advisors appointed by the EBRD to prepare the project.
“Providing better and more efficient infrastructure services is one of the highest priorities for the government of Kazakhstan, and an effort that IFC strongly supports,” said Moazzam Mekan, IFC Regional Manager for Central Asia. “This project underscores the great value of public-private partnerships in meeting the country’s infrastructure needs, and opens up opportunities for private-sector investment in PPP projects in Kazakhstan.”
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