KTZ Transtelecom Communication Infrastructure Modernisation

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The EBRD is considering arranging a senior A/B loan of USD 105 ml, to be syndicated to commercial banks, to extend the construction of a fibre optic communications network along the railway tracks of Kazakhstan Temir Zholy – Kazakhstan’s National Railways Company (KTZ). The project is initiated by JSC Transtelecom. The project has a dual purpose: The project will be procured in accordance with EBRD’s Procurement Policies and Rules. The project will help to facilitate KTZ’s corporate restructuring plan by making its subsidiary (JSC Transtelecom) more independent and based on market relationships. The project will also create greater competition in the Kazakh telecommunication sector via enhancing the scope of Transtelecom’s market activities whilst at the same time expanding railway infrastructure capacity, thus improving the base for economic growth. JSC Transtelecom is 100% subsidiary of KTZ. It is the only telecom services provider to KTZ, which also provides services to national and international telecommunications operators over its fiber optic cable network. EBRD is considering arranging a senior A/B loan of USD 105 ml to be syndicated to commercial banks. USD 135 million. 1. Screening category and justification Screened B/1. The Bank's funding will be directed toward capital expenditure for equipment and civil works. The Project, however, is unlikely to be associated with any significant environmental impacts. The project requires a corporate environmental audit and environmental analysis of the project. 2. Due diligence undertaken and outcomes The project involves the underground installation of the special polyethylene pipe at the depth of 1.2 meters along the existing train tracks. The project involves no significant environmental impacts. The completed Environmental Questionnaire (May 2008) confirms the following: the project design documentation and the cable route are approved by the all relevant institutions; the list of the approvals was checked by the state environmental expertise which is required for the project; the project takes place along the railway tracks mainly in the non-populated step areas; the cable routes do not pass through the nature reserves; the project does not include the construction of high voltage transmission lines, micro ware radio towers or satellite dishes; the project does not include the use of hazardous materials, substances and equipment; and the civil work will be conducted in accordance with the national labour code. 3. Implementation requirements The project is required the following: to ensure that the project complies with national and EU environmental, health and safety standards, local and national public consultation requirements, national employment laws and standards and Conventions of the International Labour Organisation related to the employment of children, discrimination at work, and forced labour; to submit an annual report on environmental, health and safety issues; and to report immediately to the Bank any material environmental issues associated with the project. The Bank will monitor the project's environmental and social performance during the life of the project by reviewing Annual Environmental Report and site visits if necessary and appropriate. None.