Kurty-Burybaital Road Project Extension II

Location:

Kazakhstan

Project number:

50006

Business sector:

Transport

Notice type:

Public

Environmental category:

A

Approval date:

05 Jun 2019

Status:

Disbursing

PSD disclosed:

08 Aug 2018

Translated version of this PSD: Russian

Project Description

The Bank will provide a sovereign guaranteed loan of up to USD 90 million in KZT equivalent to JSC KazAvtoZhol, 100 per cent state-owned national road operator, for reconstruction of a 67 km long Kurty-Kapshagai road section of the Almaty-Astana highway, Centre-South transport corridor in Kazakhstan.

The loan is a second extension under the Kurty Burybaital project. In 2016, the Bank provided a USD 103 million financing for the improvement of an 81 km long section of the Almaty-Astana highway between villages of Kurty and Buribaytal and subsequently a USD 86 million extension for the improvement of an adjacent 62 km long section.

Project Objectives

  • Reconstruction of the last 67 km long Kurty-Kapshagai road section of the Almaty-Astana highway.
  • Contribution to the improved inter-regional connectivity, increased road capacity, reduced travel time and proper safety standards.

Transition Impact

The Project supports material quality improvements to the current infrastructure between regions that are inadequately integrated, and introduces new benchmarks for monitoring road connectivity and improved sustainability, as well as the use of innovative and environmentally friendly technologies in repair and construction of roads in Kazakhstan. It is also aimed at improving corporate governance and institutional frameworks in the road sector.

Client Information

KAZAVTOZHOL JSC

EBRD Finance Summary

USD 90,000,000.00

Total Project Cost

USD 102 million

Environmental and Social Summary

Categorised A (ESP 2014). The requested loan extension involves the refurbishment and widening of an additional 67 km road section adjacent to two previously approved road projects which involved refurbishment and widening of 81 km and 62 km road sections. Both previous projects were categorised A (2014 ESP) and were approved in December 2015 and September 2016, respectively after completion of their 120 days ESIA disclosures.  

This refurbishment of this additional 67 km road section is also categorised A, and required an Environmental and Social Impact Assessment (ESIA). Independent consultants were engaged to develop the updated ESIA disclosure package in English, Kazakh and Russian languages comprising a supplementary ESIA, Stakeholder Engagement Plan (SEP), Non-Technical Summary (NTS), Livelihood Restoration Framework (LRF), 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 14 August 2018 and no issues have been raised to date by any Civil Society Organisations (CSO) or the general public.

Under the Kazakh regulatory regime a national Environmental Impact Assessment (EIA) was also prepared and disclosed in Russian with public hearings organised in all Project related settlements. The translation of the EIA is available upon request.  The issues raised during the Public Hearings were around land acquisition, cattle underpasses and possible business opportunities along the road during and after construction. The EIA was approved by the State Expertise. 

ESDD confirmed that no significant environmental or social impacts are expected from the 67 km road section rehabilitation. Findings from the ESDD indicate that the Company is on track working on the implementation of the previously agreed ESAP and is fully aware and committed to the diligent implementation of the EBRD Performance Requirements (PRs) under the previous and new road sections. 

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, and no vulnerable groups will be negatively impacted by the Project. Potential impacts may be felt by affected communities resulting from the construction camps potentially being located close to villages and the influx of workers, particularly if foreign contractors are used for the road works. Requirements for the construction camps, accommodation facilities of contractor's workers, and labour management practices, including a code of conduct have been developed and will be included as part of the tender specifications for the contractors to implement.

In order to minimise any potential access restrictions and impacts to local communities during construction, requirements for implementation of safety have been included in the ESAP. While no physical resettlement is required for the Project, land acquisition along the road will need to take place for the land plots where limited portions of land is acquired. An LRF was developed to assure that users and land owners of land, which will be permanently or temporarily used for the Project are fully compensated for their losses in such a manner that livelihoods are restored. The Project will need to be closely monitored including site visits as necessary.

The Project does not bisect any areas designated for their importance to nature conservation (or equivalent). The closest such area is the Altun Emel National Park (IUCN Management Category II), which is located approximately 135 km to the east of the Project at its closest point.

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. Although the  road has the potential to increase the risk of collisions and road traffic accidents involving animals (livestock / wildlife) by virtue of increasing traffic volumes, the design includes fencing and cattle underpasses  to  mitigate and reduce this risk. A Road safety audit has been undertaken for the Project and included a review of road safety incidents and accident blackspots, project design features and occupational road risk at the construction stage.  A number of the mitigation measures will be included into the Project as part of the Road Safety Action Plan and part of the ESAP. 

An ESAP has been developed to address a number of actions identified by the ESDD to structure the project to meet EBRD PRs. The ESAP will require the client to implement the corrective and improvement measures such as: enhancement of corporate EHS management systems, resettlement and livelihood restoration, improve monitoring and contractors management arrangements and develop procedures for public and occupational road safety during construction. E&S requirements will also be required to be included in contract specifications covering such issues as worker accommodation and code of conduct.  

The Client will be required to provide the Bank with annual environmental and social reports. The Bank will be monitor the Project's performance and compliance with the ESAP, regulatory requirements and the EBRD's PRs by reviewing these reports and periodic site visits as required.

Technical Cooperation

Pre-signing. Funded by the Bank:

  • Preparation of the local feasibility study for the project, including submission for state approvals and support throughout the approvals process.
  • Avanced procurement support of the project, including support during tendering, evaluation and contracts awards.
  • Technical due diligence of the project, including the calculation of Economic IRR.
  • Environmental and Social due diligence, including the Environmental and Social Impact Assessment (ESIA) and Road Safety Audit.

Post-signing: Funded form the loan:

  • A study on the use of innovative and environmentally friendly technologies in repair and road construction in Kazakhstan: A review of international best practice and identification of options that would contribute to making road rehabilitation in Kazakhstan more sustainable.
  • Support for corporate governance improvements.

Company Contact Information

Arman Kairbekov
kairbekov.a@kazautozhol.kz

Business opportunities

For business opportunities or procurement, contact the client company.

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