China Eximbank provides $434.5 million preferential buyer’s credit for the 415 km Kalbatau-Maykapshagai Road Reconstruction Project (Linked to Project ID#54989, #54991, and #55016)

On May 15, 2017, the Export-Import Bank of China and JSC KazAutoZhol National Company Joint Stock Company (JSC NC KazAvtoZhol or азАвтоЖол)— a Kazakh state-owned transportation company — signed a $434.5 million preferential buyer’s credit (PBC) agreement for the 415 km Kalbatau-Maykapshagai Road Reconstruction Project. The PBC carries the following borrowing terms: a 2% interest rate, 5-year grace period, and a 20-year maturity. 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 $511 million commercial (EPC) contract between China Xinxing Construction and Development Co. Ltd (Xinxing Construction) and KazAutoZhol. The purpose of the project is to upgrade a 415 km road that runs from the village of Kalbatau and the checkpoint Maykapshagai on the border with China in the East Kazakhstan region. Xinxing Construction (211 km in total) and JV KazGerStroy LLP (204 km in total) were the general EPC contractors responsible for implementation. However, China General Technology Group (Genertec) is also involved in implementation. Quality control of the work performed is carried out by YuVPEC-Astana LLP. As of December 2021, 127 km of roads had been covered with new asphalt concrete pavement. Construction began in May 2019 and the project was originally expected to reach completion in June 2022. However, it has encountered several implementation problems, including the COVID-19 pandemic, an increase in the cost of road construction materials, and contractor performance problems. In October 2021, Xinxing Construction completed one of the eight road sections (measuring 43.228 in length).

Additional details

1. The Chinese project title is 卡尔巴套-麦卡普沙盖公路改造 or 卡尔巴套-麦卡普沙盖公路 or 的卡尔巴套-迈哈布奇盖公路项目（415公里). The Russian project title is  реконструкции участка автодороги "Калбатау-Майкапшагай”. The project is sometimes known as the "KM415 Project" in English. 2. In its 2018 financial statements, JSC NC KazAutoZhol disclosed that it signed 4 preferential buyer’s credit (PBC) agreements with China Eximbank in 2017 worth $1,667,577,000 to support 4 road reconstruction projects: a $434.5 million PBC for the Kalbatau–Maikapshagai Road Reconstruction Project (captured via Project ID#54990), a $796 million PBC for the Taldy-Korgan-Kalbatau-Ust-Kamenogorsk Road Reconstruction Project (captured via Project ID#55016), a $253.3 million PBC for the Merke-Burylbaital Highway Reconstruction Project (captured via Project ID#54989), and a $183.95 million PBC for the Astana Bypass Road Reconstruction Project (captured via Project ID#54991) (see that the loans were PBCs at "哈萨克斯坦总理马明视察中国企业承建公路项目": see rest at pg.14 of "Financial Statements for the year ended 31 December 2018"). The combined monetary value of these 4 PBC is $1,667,750,000, which is very close to $1,667,577,000 figure reported in the 2018 financial statements of JSC NC KazAutoZhol. 3. 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. 4. 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).

Number of official sources

19

Number of total sources

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