China Eximbank provides $281.1 million buyer’s credit loan for the 1st Stage of the Dushanbe-Khujand-Chanak Road Construction Project (Linked to Record ID#40351)

Project narrative

On June 15, 2006, at the Shanghai Cooperation Organization (SCO) summit, China Eximbank and the Ministry of Finance of the Republic of Tajikistan signed a $281,105,000 buyer’s credit loan (BLA) agreement [ID#BLA06014] for the 1st Stage of the Dushanbe-Khujand-Chanak Road Construction Project. The PBC carried the following borrowing terms: a maturity of 20 years, a grace period of 5 years, an interest rate of 2%, a default (penalty) interest rate of 1%, a 0.2% commitment fee, and a 0.2% ($562,210) management fee. The borrower was expected to use the proceeds of the PBC to finance 95% of the cost of a $295.9 million commercial contract between Tajikistan's Ministry of Transport and China Road and Bridge Corporation (CRBC). The loan was originally scheduled to disburse in 3 annual tranches: $112.4 million in 2007, $112.4 million in 2008, and $56.2 million in 2009. The purpose of the project — also known as the Tajikistan-Uzbekistan Highway Rehabilitation/Reconstruction Project — was to reconstruct the 354 km highway connecting Dushanbe with Khujand, the center of the northern province, and the town of Chanak on the border with Uzbekistan. The project also involved the construction of the 5253 meter Shahristan tunnel (at a cost of $88,424), the 1047 meter Dusti tunnel, the Maikhura tunnel, 39 big and small bridges, and 6 km of avalanche defenses. CRBC was the contractor responsible for project implementation. Construction began on July 11, 2006. The construction period was originally scheduled to be 38 months in duration. The highway was commissioned in 2010, but work continued on the Shahristan tunnel. The project was completed on October 27, 2012, with an opening ceremony for the Shahristan tunnel that was attended by President of Tajikistan Emomali Rahmon. The project reportedly reduced driving times from 12 hours to 4 hours and the Shahristan tunnel was reportedly the longest tunnel in Central Asia when it completed. To help repay the loan and cover the costs of maintaining the road, the Tajik Government made the highway a toll road in 2010 and allowed the private company Innovative Road Solutions to collect tolls.