June 2013 Building the New Silk Road: EBRD transport infrastructure investments in Central Asia Askar Namazbayev, Infrastructure Russia and Central Asia.

June 2013

Building the New Silk Road: EBRD transport infrastructure investments in

Central Asia

Askar Namazbayev,

Infrastructure Russia and Central Asia

1. What is the EBRD?

2. EBRD transport Infrastructure investments in Central Asia

3. Case studies

What is the EBRD?

The European Bank for Reconstruction and Development:

•International financial institution dedicated to promote transition to market economies by investing mainly in the private sector development and entrepreneurship.

•Established in 1991. Headquartered in London, the Bank has 36 regional offices.

•Owned by 64 countries and two intergovernmental institutions (AAA rated)

•Largest single investor in the region (34 countries from Central Europe to Central Asia): €78.8bn in more than 3,644 projects since 1991

Where we operateMay 2012

EBRD projects span every business sector

Transport

Industry, Commerce& Agribusiness

Financial Institutions

Manufacturing & Services

Municipal & Environmental Infrastructure

Power & Energy

Natural Resources

Property & Tourism

Telecommunications, Informatics & Media

The Bank invests in a broad range of Transport projects including, but not limited to..

Road Road rehabilitation and construction of new highways, secondary and rural roads, by-passes, maintenance equipment and contracting, toll-motorway construction and operation

Rail

Aviation

Ports &Shipping

Rehabilitation, maintenance and construction of rail infrastructure (track, signaling, power supply, civil structures), Rail operations (rolling stock, maintenance facilities)

Rehabilitation and construction of port infrastructure (berths, quays, land access), superstructure (warehouses, gantries), inland waterways, and vessels

Rehabilitation and construction of airport infrastructure and terminals for passenger & cargo, airline finance, air navigation services (ANS)

Logistics & Intermodal

Construction of intermodal terminals & logistic centres, support to intermodal operators

1. What is the EBRD?

2. EBRD transport Infrastructure investments in Central Asia

3. Case studies

Transport infrastructure investments in CA

Portfolio by Region Portfolio by Sector

In Central Asia the Bank’s portfolio in transport sector exceeds EUR 1 billion in 20 projects, with Kazakhstan being the largest country of operation;

Road infrastructure in Kazakhstan

- Kazakhstan has a strategic location between Europe and Asia;

- The Government plans to improve transit corridors for trade with China, Russia and Europe;

- One of the most important corridors is the Western China – Western Europe International Transport Corridor, running 2,800 km across the country (running along ancient Silk Road routes);

- The construction started in 2009 and expected to finish in 2014/15. The total cost of construction is estimated to top USD 5.7 billion. IFIs, including EBRD provide funding.

WC-WE is part of CAREC transport corridors..

- The Central Asia Regional Economic Cooperation, or CAREC Programme was established by the Asian Development Bank (ADB) in 1997 in cooperation with six multilateral institutions, including EBRD.

- The Programme is active the Central Asia as well as several other countries outside the region.

- CAREC aims to achieve its overall development objectives by promoting regional cooperation in four priority areas: Transport; Trade Facilitation; Energy, and Trade Policy.

- EBRD’s engagement in the CAREC programme has so far focussed mainly on transport projects. The majority of CAREC’s transport projects have been in the road sub-sector.

- Going forward CAREC related investments are expected to reach USD 23 billion to boost regional integration.

1. What is the EBRD?

2. EBRD transport Infrastructure investments in Central Asia

3. Case studies

Client: Ministry of Finance of Kazakhstan

EBRD finance: USD 180 million

Type of finance: Sovereign debt

Total Project cost:

USD 207 million

Year: 2009

Project description:

The Project is to rehabilitate and upgrade the 102 km long road section from Aktobe to the border of the Russian Federation. This is the most northerly link in Kazakhstan of the WC-WE Transit corridor.

Impact: Fostering expansion of private sector participation in the development, management and operation of road infrastructure by assisting the Government with structuring a first pilot PPP.

Increase the role of private sector in the route road maintenance by introduction of Service-Level agreements.

Case Study

Aktobe-Martuk road rehabilitation project

Client: Ministry of Finance of Kazakhstan

EBRD finance: USD 142 million

Type of finance: Sovereign debt, co-financing with ADB

Total Project cost:

USD 378 million

Year: 2012

Project description:

The Project is to reconstruct and upgrade the 99 km long road section from the city of Shymkent to the border with Uzbekistan. This is the most southerly link in Kazakhstan of the WC-WE Transit corridor.

Impact: Improving the efficiency of the road sector administration by facilitating the establishing an independent road agency.

Increase the role of private sector in the route road maintenance by assisting with structuring a pilot performance based maintenance contract.

Case Study

Shymkent-Tashkent road rehabilitation project

Case Study

Structuring the first road PPP in Kazakhstan – work in progress

The Government requested the Bank to assist with structuring the first pilot road PPP in Kazakhstan and chose the Greater Almaty Ring Road for the purposes of the pilot (also known as BAKAD).

The city of Almaty is the largest city in Kazakhstan (population >1.6m) and lies on the WC-WE transit corridor.

In July 2012 EBRD joined forces with IFC in order to facilitate structuring. Preparation of the feasibility study and update of technical parameters is under way (March 2013).

The tender launch is planned for the second half of 2013.

Key highlights of the project:

4- 6-lane road with total length of 64 km, passing major international corridors around the city of Almaty.

Estimated construction cost is USD 730 m

Almaty

Contacts

Askar Namazbayev

Principal Banker, Infrastructure

t: + 7 7172 58 02 04

e: [email protected]

EBRD

Samal distr., 12, Astana Business Tower

Astana, Kazakhstan

For all further enquiries, please contact :