Narrative
Full Description
Project narrative
In 2018, JSC KazAvtoZhol National Company Joint Stock Company (JSC NC KazAvtoZhol or азАвтоЖол)— a Kazakh state-owned transportation company — and the Export-Import Bank of China signed a preferential buyer's credit (PBC) agreement worth $727,212,309 for the 326.6 km Karaganda-Balkhash Highway Reconstruction Project. The PBC carries the following borrowing terms: a 2% interest rate, a 20-year maturity, and a 5-year grace period. The Government of Kazakhstan provided a sovereign guarantee for the loan. The proceeds of the PBC were to be used by the borrower to finance 85% of the cost of a $855 million commercial (EPC) contract between CITIC Construction Co. Ltd and KazAvtoZhol, which was signed on May 17, 2018. The purpose of the project is to upgrade a 362.6 km road between Karaganda and Balkhash (in 8 sections) from a 3rd-grade road to a first-grade road. Upon completion, the road will will become a key component of the Astana-Khorgos International Passageway. The ugrade included the construction of "11 bridges, 32 overpasses for agricultural machinery, three transport junctions, one overpass over the railway...18 recreation areas, 24 bus stops...[and] 1452 lighting poles". A consortium consisting of CITIC Construction Co. Ltd and JV KazGerStroy LLP is responsible for implementation. Construction began in April 2019 and was expected to be completed by 2021; however, the project had only achieved a 31% completion rate as of the end of 2020 and a 50% completion rate as of April 2021. The project was completed and opened on December 6, 2024.
Staff comments
1. This project is also known as the Karaganda-Balkhash Highway Renovation Project and the KB Expressway Upgrade Project. The Russian project title is Строительство трассы Караганда - Балхаш начн or проект по реконструкции участков автомобильной дороги «Караганда-Балхаш».. The Chinese project title is 卡拉干达-巴尔喀什公路改造计划 or “卡拉干达-巴尔哈什”公路改造项目 or 卡拉干达-巴尔哈什公路改造项目 or 哈萨克斯坦KB公路改造项目 or 卡拉干达-巴尔喀什公路项目（363公里）. 2. This China Eximbank loan is not included in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020. 3. The borrowing terms of the loan are specified in this official source (https://www.dropbox.com/s/5bx9wt7r2tq10ag/%D0%93%D0%BE%D0%B4%D0%BE%D0%B2%D0%BE%D0%B9%20%D0%BE%D1%82%D1%87%D0%B5%D1%82%20%D0%B7%D0%B0%202020%D0%B3.pdf?dl=0). 4. In its 2018 financial statements, JSC NC KazAvtoZhol disclosed that it signed 5 preferential buyer’s credit (PBC) agreements with China Eximbank in 2017 and 2018 worth $2,394,789,000 to support 5 road reconstruction projects: a $434.5 million PBC for the Kalbatau–Maikapshagai Road Reconstruction Project (captured via Record ID#54990), a $796 million PBC for the Taldy-Korgan-Kalbatau-Ust-Kamenogorsk Road Reconstruction Project (captured via Record ID#55016), a $253.3 million PBC for the Merke-Burylbaital Highway Reconstruction Project (captured via Record ID#54989), a $183.95 million PBC for the Astana Bypass Road Reconstruction Project (captured via Record ID#54991), and a $727.2 million PBC for the 326.6 km Karaganda-Balkhash Highway Reconstruction Project (captured via Record ID#53554). The combined monetary value of these 5 PBC is $2,394,962,309, which is very close to $2,394,789,000 figure reported in the 2018 financial statements of JSC NC KazAvtoZhol (https://www.dropbox.com/s/5d5y0hhe1xy9wuu/KazAvtoZhol_2018_FS_ENG.pdf?dl=0). 5. The annual financial statements of JSC NC KazAvtoZhol can be accessed via https://kz.qaj.kz/company/reports/