Kazakhstan to get $800 million :
Improve roads, boost regional trade
The Asian Development Bank (ADB) is extending a loan facility of up
to $800 million to Kazakhstan to upgrade roads and boost transit trade
along a key Central Asia transport corridor.
The multitranche facility for the Central Asia Regional Economic
Cooperation Corridor 2 Investment Program will finance the investment
program reconstructing around 790 kilometers of roads in Mangystau
Oblast (province), Kazakhstan’s main oil- and mineral-producing region
on the eastern shore of the Caspian Sea. The total cost of the
investment program is estimated at $1.2 billion and the government will
provide $412 million equivalent as a counterpart contribution.
Vehicles stuck in a muddy road |
The eight countries and six multilateral institutions, including ADB,
which make up the Central Asia Regional Economic Cooperation Program (CAREC),
have an action plan to develop six corridors connecting the region to
other parts of Asia and Europe. Kazakhstan, with its ideal strategic
location and abundant resources, is an integral part of the strategy.
Trade between Asia and Europe reached $700 billion in 2009 and is
expected to grow to $1 trillion by 2015, with around 20 percent passing
through Kazakhstan, generating an estimated $1.1 billion in revenues for
the country.
Mangystau’s capital, Aktau, is a hub for transporting oil and oil
products to European and Asian countries, and the growing movement of
goods through the port has seen a corresponding rise in road freight
traffic. However, the province’s roads are in poor shape, with over half
of them still gravel or earth surfaces, while most paved sections have
deteriorated due to lack of maintenance. As a result, average driving
speeds are low, costs are rising, and transit trade is running well
below expectations.
The first project of the investment program will reconstruct around
200 kilometers of the road linking Manasha to Beki, and improve bridges,
culverts and other infrastructure. Subsequent projects will focus on
rehabilitating other key roads along CAREC Corridor 2 which links
Kazakhstan to Azerbaijan and Europe through the Caspian Sea in the west;
to the Russian Federation in the north; and to Uzbekistan and
Turkmenistan in the southeast and south. Funds will also be used to
strengthen the capacity of agencies involved in preparing, implementing
and managing program activities.
“The outcome of this program will be faster, more efficient road
connectivity which in turn will contribute to sustained economic
development and stronger regional cooperation in CAREC,” Principal
Transport Specialist in ADB’s Central and West Asia Department Eunkyung
Kwon said.
It is also tailored to ensure poor, rural women share equally in the
benefits, with a community and gender action plan drawn up to help
maximize new opportunities for women in project areas, including small
roadside businesses and farm skills training.
The loan from ADB’s ordinary capital resources is expected to be
released in three tranches, pending Government request, with the amount
of $283 million earmarked for the first tranche project. Annual interest
rate charges will be based on ADB’s LIBOR-based lending facility. The
Government will provide counterpart funds of $50 million equivalent.
The Ministry of Transport and Communications is the executing agency
for the program, which is expected to be completed by June 2017.
ADB |