WORLD Bank subsidiary International Finance Corporation (IFC) has announced that, in conjunction with lending banks, it will provide Kazakhstan Railways (KTZ) with up to $US 300m to finance the 130km electrified line now under construction to avoid Almaty, easing a major bottleneck on the Middle Corridor or Trans-Caspian International Transport Route (TITR) connecting China with Europe.
Alongside an IFC investment of up to $US 50m, KTZ will receive a loan of up to $US 150m from the Asian Infrastructure Investment Bank (AIIB). Standard Chartered is lending up to $US 100m, supported by a proposed guarantee from the Multilateral Investment Guarantee Agency (Miga).
By enabling freight trains to avoid the largest city in Kazakhstan, the bypass is expected to reduce congestion around Almaty by over 40%, cut transit times by up to 24 hours, and improve the flow of traffic along the Middle Corridor.
As the Middle Corridor has grown in importance as an alternative to the Northen Corridor via Russa, IFC says that congestion has intensified, highlighting the need for targeted infrastructure investment. In addition to cutting transit times, the Almaty bypass will help meet this demand by adding capacity and strengthening reliability.
IFC says that the project represents a major milestone in collaboration between international financial institutions and KTZ on infrastructure financing. It provides a model for future projects in Kazakhstan by incorporating strong financial and operational due diligence, high environmental and social standards and the use of guarantees to mobilise private capital.
“The Almaty railway bypass will enable KTZ to handle growing long-haul freight volumes more efficiently, strengthen the resilience of regional logistics, and enhance the competitiveness of the Trans-Caspian transport corridor as a reliable bridge between Asia and Europe,” says KTZ CFO, Dair Kusherov.
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