Kazakhstan Road Sector Development Project

complete

An EBRD loan to facilitate the rehabilitation of the Almaty-Bishkek road (245km) and finance small–scale improvements to access roads. The project would promote regional economic cooperation in Central Asia, and will enable the Government of Kazakhstan to improve the planning and finance of the road sector. The main objectives of the Project are to promote regional co-operation in Central Asia, rehabilitate the principal regional road transport link between Almaty and Bishkek, facilitate border transit, and assist the Government of Kazakhstan in improving the planning and finance of the road sector. The transition impact of this operation derives from: the signature of inter-Governmental Cross-Border Agreement; the regional importance of the Almaty-Bishkek Road and corresponding high economic rate of return of the project; proposed improvements to road safety; reform of the sector legal environment; and proposed improvements to sector financing. The Bank will also assist the Government with the preparation of a Highway Investment and restructuring Plan. The Government of Kazakhstan, represented by the Ministry of Finance, will be the borrower under the loan. The beneficiary will be the Ministry of Transport and Communications of the Republic of Kazakhstan, and the Ministry’s Roads Committee will implement the project. The Roads Committee is an organisation responsible for the administration of the state road network in Kazakhstan. The EBRD would provide a sovereign loan of US$ 28.5 million. The EBRD project will primarily finance the rehabilitation of a 50.5km section of a four lane road from the Almaty City border (11.5-62km). The project will include a small component for road sector investments, which are complementary to sections of the main project such as the maintenance and improvements to structures (bridges, culverts, etc), and other small scale investments. The Asian Development Bank (ADB) will finance the remainder of the route to Bishkek (63-216km). The ADB will also finance equipment for road maintenance and for laboratory testing, and some consulting assistance. EU-Tacis will provide grants for consultants and for some equipment. The project cost will be US$ 119 million. This will include US$ 65 million from the ADB, US$ 28.5 million from the EBRD, co-financing in amount of approximately US$ 24 million from the Government of Kazakhstan and TC grants of approximately US$ 2 million. The environmental impacts associated with the rehabilitation of an existing road (ie, with minimal change in geometry) are not significant and are adequately addressed in a B-level Environmental Analysis. EU-Tacis approval in principal has been received to provide grant funds to finance further project preparation and implementation effort, including it is hoped for the Sector Highway Investment and Restructuring Plan.