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EBRD arranges US$ 300 million syndicated loan for Kazakh Railways, KTZ

By Svitlana  Pyrkalo

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Restructuring and modernisation programme will include railway sector reform

The European Bank for Reconstruction and Development (EBRD) and a group of international commercial banks are providing a syndicated financing package of US$ 300 million in support of a comprehensive modernisation and restructuring programme of the Kazakhstani rail operator, Joint Stock Company National Company “Kazakhstan Temir Zholy” (KTZ).

KTZ is a national railway company which manages railway infrastructure and operates freight and a large share of passenger train services.

The EBRD will extend US$ 150 million of this amount for its own account and syndicate the remaining US$ 150 million to commercial banks. The syndicate comprises the following banks: Citibank, NA, London branch; Mizuho Bank, Ltd; Société Générale; Sumitomo Mitsui Banking Corporation; and the Bank of Tokyo-Mitsubishi UFJ, Ltd.

The signing ceremony took place in the EBRD headquarters in London, in the presence of representatives of the EBRD, KTZ and the Embassy of the Republic of Kazakhstan in the UK.

The proceeds of the loan will be used to refinance KTZ’s eurobonds.

As part of the project, the EBRD will engage with KTZ on tariff system reform and the ongoing business transformation of the company. KTZ will also continue to implement sustainable energy technologies, which are a constant feature of its long-term cooperation with the EBRD.

Natalia Khanjenkova, EBRD Managing Director for Turkey and Central Asia, said at the signing at the Bank’s Headquarters in London: “We are proud to further support railway sector reform in Kazakhstan with this syndicated financing package. International financiers’ interest in the project demonstrates investor confidence in KTZ and Kazakhstan.”

Sholpan Omarbekova, KTZ Managing Director for Finance and Economics, added: “With this new transaction the EBRD will not only provide financing, but also assist KTZ with advancing the reform of the regulatory framework in the sector.”

To date, the EBRD has invested over US$ 7 billion in various sectors of the country’s economy. The Bank is the largest investor in the non-oil and gas sectors of the Kazakhstani economy.

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