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EBRD co-finances key Kazakh road project

By EBRD  Press Office

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The EBRD is providing a loan of up to $180 million for the rehabilitation and upgrade of the Western Europe – Western China International Transit Corridor, a key international transport link connecting Europe with China.

Beginning in Moscow and leading to Kazan, the corridor enters Kazakhstan near the city of Aktobe and runs almost 3,000 km through the country before finally entering China. The corridor also integrates the Central Asian republics into the international road network. However, to be able to fulfil this role the road requires urgent rehabilitation.

As part of an international effort, the EBRD will finance the upgrade of a 102 km section between the border with Russia and the city of Aktobe. Other sections of the corridor will be rehabilitated with loans provided by the World Bank, the Asian Development Bank, the Islamic Development Bank and the Government of Kazakhstan.

The improvements will facilitate the transit of goods and passengers and will form an important element in the economic development of Kazakhstan. The vast country is very scarcely populated and improved travel and transport links will support a better integration of the country’s economy.

Acknowledging the importance of good and well-maintained roads, the Kazakh authorities have invested significant amounts into the improvement of the national network. However, after years of serious under-investment and rapidly rising traffic levels require even bigger efforts.

The EBRD will not only finance the rehabilitation of the 102 km-section, but also lay the groundwork for a public-private partnership concession. The project is being developed with a $1.5 million grant from the Japan/Europe Cooperation Fund. An environmental and social impact assessment funded by the EBRD will have an important role in the actual road construction works.

EBRD First Vice President Varel Freeman said the project “demonstrates our expertise in infrastructure projects, where we can combine state and private activities to the best possible effect. Especially during the current global financial turbulence the EBRD’s role in financing key investments is more needed than ever. We are confident that the upgraded corridor will make an important contribution to Kazakhstan’s future growth.”

Since the beginning of its operations in Kazakhstan in 1991, the EBRD and its partners have invested around $6 billion in more than 100 projects in the country and the Bank has become the largest single investor in Kazakhstan outside the oil and gas sector. The EBRD signed its first road project in the country in December 2000 with a $28.5 million loan for the rehabilitation of the road from Almaty to Bishkek and has since acquired significant experience in the sector in Kazakhstan with further investments.

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