EBRD co-finances key Centre-South highway in Kazakhstan

By Svitlana  Pyrkalo

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Russian Translation

US$ 103 million to national road operator for upgrade of Kurty-Burylbaital stretch of Astana-Almaty road

The European Bank for Reconstruction and Development (EBRD) is continuing to promote modern infrastructure and regional connectivity in Central Asia by supporting a key road link in Kazakhstan.

The Bank is extending a US$ 103 million loan to Kazavtozhol, a national road operator, under the sovereign guarantee for the reconstruction and widening of an 80 km section of the so-called Centre-South Road Corridor, leading from Astana to Almaty, between the villages of Kurty and Buribaytal in the Almaty region.

The EBRD loan is part of a wider programme to rehabilitate and upgrade a 228-km stretch of the highway which remains unmodernised.

The project was signed by Bakhyt Sultanov, Minister of Finance of Kazakhstan, Sir Suma Chakrabarti, President of the EBRD and Yermek Kizatov, CEO of Kazavtozhol, during a high-level Central Asia Investment Forum, organised by the EBRD and the Financial Times, in Istanbul in the presence of Turkey’s Deputy Prime Minister Mehmet Şimşek.

EBRD President Chakrabarti said: “The EBRD and Kazakhstan have recently agreed to further increase investment in infrastructure, and I am very pleased that only three months later we are signing this project, hopefully the first of many. The EBRD believes that modern road infrastructure in Kazakhstan is crucial for the country’s own economy as well as for boosting regional trade”.

Minister Sultanov added during the signing ceremony in Istanbul: “For Kazakhstan, the project we are signing today with the EBRD is much more than just a financing package. The project also envisages reforms in the road sector that will improve the entire sector’s financial sustainability.”

The full reconstruction of roads in the transport corridor connecting Astana and Almaty is part of Kazakhstan’s Strategic Plan 2020. The majority of roads within the Centre-South Corridor have already been rehabilitated with only one remaining section still in need for reconstruction, restraining transit of goods and passengers. After the reconstruction, the highway between Almaty and Astana will be complete. The EBRD loan is part of a road rehabilitation programme co-financed by the World Bank and the government of Kazakhstan.

As part of the project, the EBRD is also working with the government to explore more sustainable ways for road financing and maintenance such as the introduction of charges for heavy vehicles and the rollout of a tolling system in the country. Some of these innovations will play a key role in any future infrastructure PPP (public-private partnership) financing.

In November 2015, the EBRD and the government of Kazakhstan agreed in a Memorandum of Understanding to boost cooperation on road sector reform and investment. The Kurty-Buribaytal road project is part of that agreement. To date, the EBRD has invested over US$ 7 billion in the Kazakhstani economy.

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