China Eximbank provides RMB 697 million government concessional loan for the Aral-Kazarman Section (195 km-291 km) of the Alternative North-South Road Project (Linked to Project ID#40491 and #53585)

On June 15, 2015, China Eximbank and the Government of the Kyrgyz Republic's Ministry of Finance signed a RMB 697,562,608.76 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2015) 9 TOTAL NO. 548] for the construction of the Aral-Kazarman Section (195 km-291 km) of the Alternative North-South Road Project. This project is also known as Phase 2 of the Alternative North-South Road Project (or “Строительство альтернативной автомобильной дороги Север-Юг, фаза 2”). The loan carried the following terms: 25 year maturity, 11 year grace period, 1.5% interest rate, 0.18% management fee, and 0.18% commitment fee. The proceeds from the loan were used to support a May 4, 2014 commercial contract [EXMB/KG/NS-05] between the Ministry of Transport and Communications of the Kyrgyz Republic and China Road and Bridge Corporation. The aim of this international North-South transport corridor is to reduce trade costs and connect Russia, Central Asia, Iran, and India. This road section runs from Aral to Kazarman (195 km to 291 km). More locational details can be found within the sources 'Kyrgyzstan and the Belt and Road Initiative,' 'Static.AkiPress,' 'Alternative North-South Road Aral - Kazarman (Construction),' 'Financing the Construction of an Alternative North-South Road in Kyrgyzstan' and 'Министерство транспорта и дорог Кыргызской Республики.' Construction began on August 10, 2015. As of 2019, this project was still implementation. It was scheduled for completion on April 10, 2020. This project has been plagued by controversy. According to a 2018 investigation, former Minister of Transport and Communications Kalykbek Sultanov and the Minister of Transport and Communications at the time (Zhamshitbek Kalilov) may have colluded with the contractor responsible for project implementation (CRBC) to embezzle funds that were allocated for the Alternative North-South Road by China Eximbank. The investigation found the project input costs were inflated by several orders of magnitude — from paying $1.1 per kilogram of cement (while the cost on the local market was $0.07) to paying $2,000 a month to provide office space to an engineer on the construction site.

Additional details

The Alternative North-South Road Project (Russian: строительства альтернативной дороги Север—Юг; Chinese: “北-南公路”) is being implemented in three parts and financed with 3 different China Eximbank loans: Phase 1 of the project [Kazarman-Jalal Abad Section (km291-km433) and Balykchy-Aral Section (km183+500-195+486)] is being financed with a $399,989,041 PBC from China Eximbank (Project ID# 40491). Phase 2 of the project [the Aral-Kazarman Section (195 km-291 km)] is being financed with a RMB 697,562,608.76 government concessional loan (GCL) from China Eximbank (Project ID#46350) and a 185,254,119 PBC from China Eximbank (Project ID#53585). Phase 3 of the project [the Balykchy-Kyzyl-Zhyldyz Section (0-183km) was funded by the Asian Development Bank.

Number of official sources

9

Number of unofficial sources

10