Azerbaijan, Baku, Dec. 2 / Trend A.Yusifzade /
The European Bank for Reconstruction and Development (EBRD) is supporting the modernization of the railway network in Kazakhstan with a $ 200 million (€145 million) loan to Kaztemirtrans (KTT), a freight transport subsidiary of Kazakhstan Temir Zholy (Kazakh Railways or KTZ), EBRD reported.
The 8-year corporate loan will be split into two equal tranches and disbursed in US$ and in Tenge in equal proportions. The loan is structured with the view to support the state-owned railway in the implementation of the restructuring of KTT. The loan will foster improvement of the corporate governance standards within a vital sector of Kazakhstan's economy.
EBRD's financing will be used to support the renewal of KTT's railway wagon fleet by purchasing more than 3,000 freight wagons. In addition, the project will promote reassessment of the railways' regulatory set-up in Kazakhstan, including addressing the need for establishing an independent railway sector regulator to promote in the transition towards a more efficient and competitive railway sector.
This loan would be closely tied to the ambitious reform objectives that KTZ and the government of Kazakhstan have set for the sector, including restructuring of freight operations and improving sector regulation. The EBRD, as the largest financial investor in Kazakhstan outside the oil and gas sector, is proud to participate in this process, EBRD President Thomas Mirow said.
Kazakh Railways operates one of the world's largest railway networks. With Kazakhstan's vast territory and no significant water transport alternative, it also plays a key role in the national transport sector, accounting for some 59 per cent of all freight movements and 11 per cent of passenger traffic.
Since the beginning of its operations in Kazakhstan, the EBRD has invested over €2.8 billion in over 130 projects in various sectors of the Kazakh economy, mobilizing additional investments in excess of about €7 billion, with 65 per cent of the projects' being investments into the development of the country's private sector.