Translated version of this PSD: Russian
EBRD subscription to the CHF 285 million Eurobond issue of Kazakhstan Temir Zholy, Kazakhstan’s National Railways Company (KTZ).
The proceeds from the Bank’s subscription to the Eurobond will be used to finance general corporate purposes of KTZ with the emphasis on logistics industry to attract additional transit cargo traffic to the country, in particular on the China-EU route.
The Project will continue the Bank’s support of the railway reform programme and the transition impact is expected to be derived from the widening the private sector’s role in the logistics area and strengthening the corporate governance practices of KTZ’s logistics operator JSC KTZ Express, namely:
1. Setting Standards of Corporate Governance and Business Conduct
The Project will contribute to the commercialisation of the logistic infrastructure subsidiary JSC KTZ-Express by providing assistance to improve corporate governance standards and management practices at KTZ Express.
2. More widespread private ownership
The proposed Project will target more widespread private participation and eventually private ownership in the logistics industry through engaging professional dry cargo private managers for KTZ’s logistics projects and assisting KTZ with structuring pilot logistic project with private sector participation.
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 participation in the KTZ Eurobond issue alongside other investors.
CHF 285 million.
Categorised B in accordance with the EBRD’s 2008 Environmental and Social Policy. Environmental and social due diligence (ESDD) has been carried out with support from independent external consultants and focussed on a corporate E&S review of KTZ's and KTZE's procedures, capacity, management practices and the implementation status of the previously agreed environmental and social action plans (ESAPs). The ESDD identified that KTZ is, in accordance with the ESAPs agreed under the existing loans, working on improving its corporate environmental, health and safety management systems and standards and undertaking the necessary steps towards obtaining ISO 14001 and OHSAS 18001 certifications to cover their operations. It also showed that the implementation of the environmental, health and safety requirements at the operational/subsidiary level has not been efficient and requires better coordination and supervision at the corporate level. The Bank developed a new corporate ESAP for KTZE, requiring it to develop corporate EHS management systems, build its internal management capacity and provide training for staff, develop its contractor management and supervision procedures, and implement E&S Procedures to structure the logistic infrastructure projects financed from the Eurobond proceeds to meet EBRD PRs. The E&S Procedures provide KTZE with a comprehensive environmental and social risk assessment and management framework accompanied with guidance on the Bank’s requirements. The Bank will continue closely monitoring KTZ’s and KTZE’s performance and implementation of the ESAPs through reviewing annual reports provided by the Company and carrying out monitoring visits, when deemed necessary.
TC support to improve the corporate governance and management practices of KTZ’s logistics operator JSC KTZ Express, assist KTZE in capacity building to assess and manage environmental and social risks in line with EBRD’s requirements and help KTZ Express to structure a pilot logistic hub with the private sector participation.
For business opportunities or procurement, contact the client company.
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