KTZ CHF Eurobonds

Location:

Kazakhstan

Project number:

50536

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Approval date:

31 Oct 2018

Status:

Signed

PSD disclosed:

06 Dec 2018

Translated version of this PSD: Russian

Project Description

EBRD's subscription to the CHF 170 million Eurobond issue of Kazakhstan Temir Zholy, Kazakhstan's National Railways Company (KTZ).

The proceeds from the Bank's subscription to the Eurobond will be used to refinance KTZ's existing non-CHF hard-currency debt.

Project Objectives

The Project will support the risk management measures, which will improve KTZ's financial sustainability. In particular the transaction will help to reduce the Company's exposure to foreign
exchange risk by refinancing non-CHF hard currency loans, which cannot be naturally hedged against the Company's transit or domestic revenues. In addition, the placement will help to optimise
its debt maturity profile and improve its liquidity position.

Transition Impact

Good

The transition impact of the Project is expected to originate from its contribution to the development of financial markets, as well as improvements to the client procurement procedures and introduction of a more predictable tariff-setting mechanism.

Client Information

KAZAKHSTAN TEMIR ZHOLY NATIONAL COMPANY JSC

KTZ is a vertically integrated state-owned holding company managing railway infrastructure and operating freight and passenger train services. KTZ plays a key role in the Kazakh national transport sector with a leading position in freight and passenger traffic.

EBRD Finance Summary

CHF 34,000,000.00

EBRD participation in the KTZ Eurobond issue alongside other institutional investors.

Total Project Cost

CHF 170,000,000.00

Environmental and Social Summary

Categorised B in accordance with the EBRD's 2014 Environmental and Social Policy. The proceeds of the bond will be used for refinancing of the existing debt only and will not be used for any Capex. The review of Company's strategic investment plans for 2018-2020 indicates that the Company will be investing into infrastructure and rolling stock, and some of the potential infrastructure investments may be associated with significant E&S impacts and thus require careful preparation and management of the construction and operation stages.

KTZ is a long-standing Bank client which has steadily worked on improving its E&S performance and reporting under past operations. Under the existing consolidated corporate ESAP, the Company has also advanced in implementing its E&S commitments and improving associated management practices. The latest annual reporting was satisfactory and demonstrated the Company's increasing focus on E&S issues and development of EHS management systems. Particular emphasis over the past two years has been placed on the high level of worker injuries and fatalities reported across KTZ due to incidents involving electrocution, falls from height and impacts from moving rolling stock.

The Company's management and staff have received additional support and training on this from Bank-funded external OHS consultants and IOSH experts to address and prevent typical injuries
associated with such incidents. The Bank will continue to monitor these issues and will carry out site visits as and when required.

Technical Cooperation

None.

Company Contact Information

Daniyar Bektursynov, Deputy Head of Funding and Investor Relations
Bektursynov_d@Railways.kz
Page 3
+7 717 260 3721
www.railways.kz

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Share this page: