KTZ restructuring bonds



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

04 May 2022



PSD disclosed:

29 Jul 2022

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

A bond investment of KZT 45.8 billion in favour of the National Company "Kazakhstan Temir Zholy" JSC (KTZ - Kazakhstan Railways).

Project Objectives

Issue of the local currency bond will allow KTZ to:

  • refinance its maturing hard currency and Russian rouble financial debt;
  • free up capital to finance the modernisation of the Middle Corridor infrastructure. 

Transition Impact

ETI score: 63

The Project supports capacity improvement on the East-West corridor and to support the Middle Corridor development. It also promotes access to skills for young people in the transport and logistics industry by introducing two new National Occupational Skills Standards ("NOSS") and new or improved accredited learning programmes in partnership with the Academy of Logistics and Transport on the basis of the developed NOSS.

Client Information


KTZ is a vertically-integrated holding company that manages railway infrastructure and operating freight and passenger train services in Kazakhstan. KTZ owns and operates the railway network of 16,000 km in total length, more than 1,720 locomotives, 47,300 freight and 2,300 passenger wagons. KTZ is fully state-owned through Sovereign Wealth Fund "Samruk-Kazyna" JSC (Samruk-Kazyna). In 2021 KTZ reported revenues of US$ 3.12 billion (€2.82 billion) and EBITDA of US$ 906 million (€ 820 million).

EBRD Finance Summary

KZT 45,798,006,200.00

Total Project Cost

KZT 164,752,212,400.00


The EBRD offers financing structure, effectively bridges a financing gap due to adverse market conditions and risk mitigation. In the current market environment the EBRD's participation will be critical for KTZ to reach expected subscription level and support investors' confidence. This is EBRD's first investment in a local currency bond in Kazakhstan, and firts issuance of TONIA-linked bonds by a loacal company.   

Environmental and Social Summary

Categorised B (ESP 2019) and this is a capital market transaction with due diligence being limited to publicly available information. The proceeds of the new bonds would be used to refinance the Client's existing bonds issued in 2014 for general corporate purposes, and are not envisaged to be directed at specific physical assets or any new CAPEX investments. Therefore, ESDD was focussed on assessing the risks and impacts associated with the KTZ's existing E&S management systems, practices and compliance record and review of the risks associated with the existing operations. This has been done through review of documentation and reporting which the client has produced on previous projects. Past annual E&S reporting from KTZ has been satisfactory. Overall, KTZ continues to have capacity and capability to implement the PRs.

The Company proactively focusses its efforts on enhancing its ESG performance and aligning it in line with good international practice, supporting the move towards a low-carbon competitive economy and wider use of the digitalisation. KTZ continuously works to improve their internal EHS capacity, enhance managerial leadership and overall management of industrial safety, occupational health and safety practice and environmental protection. The Company considers safety as one of its primary objectives and is committed to Vision Zero in both day-to-day operations and at the top management level to bring the number of accidents down. Further corrective measures required at the corporate level to meet the EBRD Performance Requirements (PRs) will be addressed through the Side Agreement.

The indicative anticipated KTZ's Capex investment programme for 2022-2026, that would be financed by KTZ's own resources mostly, includes predominantly new rolling stock for passenger and freight transportation, incl. electrical trains, modernisation of the existing infrastructure as well as the development and construction of the train station complex in Nur-Sultan. To ensure any risks and impacts associated with KTZ's current and future operations are adequately addressed, the Side Agreement with the client would need to clearly specify that (i) after subscription, the Bank will require the Client to comply with the PRs, and (ii) any high risk projects or projects categorised "A" in line with the EBRD's E&S Policy 2019 will not be financed through this bond refinancing. The Bank will monitor the project through review of annual E&S reports and site visits, as required.

Technical Cooperation and Grant Financing


Company Contact Information

Ainagul Ysabekova
Kunayev Str 6D, Nur-Sultan, 010000, Kazakhstan

PSD last updated

29 Jul 2022

Understanding Transition

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

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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.

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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.

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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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