Kyzylorda-Zhezkazgan Road Reconstruction

Location:

Kazakhstan

Project number:

52149

Business sector:

Transport

Notice type:

State

Environmental category:

B

Approval date:

21 Jul 2021

Status:

Approved

PSD disclosed:

25 Sep 2020

Project Description

The provision of a  loan of up to USD 240 million  in local currency split into two tranches under sovereign guarantee to JSC KazAvtoZhol, 100 per cent state-owned national road operator. The first tranche in the amount equivalent to USD 187.4 million in local currency will finance  the reconstruction of a 204 km long road section between the cities of Kyzylorda and Zhezkazgan. The second uncommitted tranche of USD 52.6 million will finance construction of a 14.8 km bypass around Kyzylorda, adjacent to the motorway.

Project Objectives

  • 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.

Transition Impact

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.

Client Information

KAZAVTOZHOL JSC

JSC KazAvtoZhol - the state-owned national road operator in Kazakhstan

EBRD Finance Summary

USD 240,000,000.00

Total Project Cost

USD 268,500,000.00

Additionality

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 related to greenfield by-pass construction is categorised A (ESP 2019) and will require a full Environmental Social Impact Assessment, which is on-going, as per the Bank's PRs. The ESIA Disclosure Package will need to be separately disclosed for a minimum of 120 days and this PSD will be updated.

 

The Bank will monitor the Company's environmental and social performance and implementation of the ESAP through annual E&S reports and monitoring site visits when necessary.

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

Raushan Taenova
'taenova.r@kazautozhol.kz'

Implementation summary


PSD last updated

22 Jun 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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