The provision of a loan of KZT 96.9 billion split into two tranches under sovereign guarantee to JSC KazAvtoZhol, 100 per cent state-owned national road operator. The first tranche of KZT 74.8 billion will finance the reconstruction of a 204 km long road section between the cities of Kyzylorda and Zhezkazgan. The second uncommitted tranche of KZT 22.1 billion will finance construction of a 14.8 km bypass around Kyzylorda, adjacent to the motorway.
- Reconstruction of the 204 km long Kyzylorda-Zhezkazgan road in Kazakhstan.
- Construction of a 14.8 km bypass around the city of Kyzylorda.
- Contribution to the improved inter-regional connectivity, safety standards, increased road capacity and reduced travel time.
ETI score: 65
The Project supports improving regional connectivity and road safety standards as well as expansion of tolling system and performance based maintenance contracts to ensure better maintenance of rehabilitated roads. In addition, it supports Kazakhstan to develop a readiness strategy for road infrastructure development that will support roll-out of electric vehicles on the national road network. The Project incorporates climate change adaptation measures that improve the resilience of the road to increasing extreme weather conditions. It also aims to address gender concerns in road infrastructure design and implementation.
JSC KazAvtoZhol - the state-owned national road operator in Kazakhstan
EBRD Finance Summary
Total Project Cost
The EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, e.g. a longer tenor/grace period that is rarely available in the market and provides support to strengthen Kazavtozhol JSC capacity with respect to procurement, environmental and social issues and sector reforms.
Environmental and Social Summary
Tranche 1 is categorised B (2019 ESP). The independent environmental and social due diligence ("ESDD") of the Company and the project has confirmed) that any adverse future environmental and social impacts associated with Tranche 1 (largely associated with the existing road rehabilitation) will be temporary in nature and primarily limited to the construction activities. The ESDD has further confirmed that the Borrower's overall capacity, and related Environmental, Health&Safety and Security management systems, are generally aligned with the Bank's Performance Requirements (PRs). Furthermore, the Borrower is an existing client of the Bank and has demonstrated satisfactory EHSS performance on the previous projects.
Local EIA (OVOS) has been undertaken in accordance with national requirements to evaluate the risks and impacts associated with the project. Findings from the ESDD have identified that the OVOS report is in line with Kazakh national requirements. Disclosure of the project related information and public engagement was organised and completed in accordance with national requirements.
Whilst the project is generally structured to meet the EBRD PRs, the ESDD has identified a number of gaps to be further addressed. Stakeholder engagement activities will need to be improved and implemented according to the project specific Stakeholder Engagement Plan (SEP) including enhanced communication with the local communities and road users during the construction stage. Occupational health and safety (OHS), and labour risks are mainly related to the construction phase and will be further elaborated and included into the Construction Environmental and Social Management Plan to be prepared by the contractors.
Whilst limited land acquisition impacts are likely to occur, as the works are largely rehabilitation and within existing alignments, there may be some impacts to 3 cafes and 2 car service areas. The client will try to avoid such impacts through design based solutions i as required under the Land Acquisition and Resettlement Framework (LARF) that will be adopted by the Borrower and will be additionally publicly disclosed. The LARF will be applicable for both Tranche 1 and Tranche 2.
No significant negative biodiversity impacts are expected as the project is not located near to protected areas, working is largely within existing alignments , but pre-construction surveys will be carried out prior to construction.
Although no issues related to cultural heritage have been identified in the OVOS report, additional archaeological surveys will be commissioned as part of pre-construction surveys at the next stage in the projects development .
A road safety audit has been completed and specific improvements and mitigation measures have been included into the project.
An Environmental and Social Action Plan (ESAP) has been developed to address the issues raised above, and also to further improve environmental and social management at all stages of the project implementation. The ESAP includes the following actions: improvements to contractors management; preparation and implementation of a Construction Environmental and Social Management Plan; development of a structured and integrated Environmental, Health and Safety, Labour Management System; improvements in water monitoring; formalising and developing better labour and OHS practices; safety and emergency response procedures during construction. The ESAP also requires : the development of a formal human resources policy including standards for working conditions and employment policies (non-discrimination, promotion of equal opportunities); the introduction of employment contracts for all the workforce; improvement of safety at workplaces during construction; adoption of gender-based violence and harassment policies; training programmes; a workers grievance mechanism; obtaining and maintaining all applicable permits. If contractors provide housing facilities, these will have to designed and managed as per EBRD/IFC guidelines for workers accommodation 2009 and national guidelines for protection against COVID-19.
Tranche 2 is categorised A (2019 ESP). Independent consultants were engaged to undertake Environmental and Social Impact Assessment and prepare an ESIA disclosure package in English and Russian languages comprising an ESIA, Stakeholder Engagement Plan (SEP), Non-Technical Summary (NTS), Environmental and Social Action Plan (ESAP), and Environmental and Social Management Plan (ESMP) to include specific details on the new road section. The ESIA package was disclosed on 5th of August 2021 and no issues have been raised to date by any Civil Society Organisations (CSO) or the general public.
The ESIA has confirmed that any adverse future environmental and social impacts associated with the greenfield construction of bypass will be temporary in nature and primarily limited to the construction activities.
Local EIA (OVOS) has been undertaken to evaluate the risks and impacts associated with the project and disclosure of the project related information and public engagement was organised and completed in accordance with national requirements.
ESDD determined that no significant impacts on local communities are expected, as there are no residential dwellings or businesses adjacent to the road alignment. There is no intensive agriculture in this geographic area either, and no vulnerable groups will be negatively impacted by the Project. Potential impacts may be felt by some local communities resulting from the construction camps potentially being located close to villages and the associated influx of workers, particularly if significant foreign contractors' workforce are used for the construction works. Requirements for the construction camps, temporary accommodation facilities of contractor's workers, and labour management practices, including a code of conduct, have been developed as part of ESMP and will be included into the tender specifications for the contractors to implement.
The implementation of the project works under tranche 2 may require an acquisition of one land plot and provision of a replacement plot to the affected person. No other impacts are expected in relation to resettlement and land acquisition. In case there will be change in project scope and unanticipated land acquisition impacts take place, the Client has committed to addressing such impacts as per requirements of EBRD Performance Requirement 5 and the Land Acquisition and Resettlement Framework (LARF) that has been adopted by the Borrower. The LARF has already been disclosed and will be applicable for both Tranche 1 and Tranche 2.
The ESIA confirmed that construction activities will result in localised disturbance that may disturb fauna however, given the low sensitivity of the receptor (habitat value), the effects of this loss are considered to be minor and not significant. The project is not located near to protected areas and is close to the existing urban developments and within already disturbed natural environment. Additional studies confirmed no impact on Saiga as the project location is well outside their migration routes.
Baseline surveys also confirmed that no issues related to cultural heritage have been identified. A road safety audit has been completed and specific improvements and mitigation measures have been included into the project. An ESAP has been further updated developed to address the issues identified, and also to further improve environmental and social management at all stages of the project implementation.
Technical Cooperation and Grant Financing
TC1: Road Safety Audit
TC2: Environmental and Social Due Diligence
TC3: Environmental and Social Impact Assessment (Kyzylorda Bypass)
TC4: Strategic Roads Risk Assessment
TC5: EV Readiness Strategy Development
Company Contact Information
PSD last updated
01 Nov 2021
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