China Eximbank provides RMB 2.062 billion government concessional loan for Border Checkpoint Technology and Equipment Modernization Project

Project narrative

On June 7, 2018, China Eximbank and the Government of Kazakhstan signed a preferential loan framework agreement for the improvement of border checkpoints. Then, on June 18, 2019, Kazakhstan’s Prime Minister, Kassym-Jomart Tokayev, signed an executive decree, formally approving the framework agreement. Several months later, on September 11, 2019, China Eximbank and the Government of Kazakhstan signed an RMB 2,062,000,000 ($307.4 million) government concessional loan (GCL) agreement for the Border Checkpoint Technology and Equipment Modernization Project. The GCL carried the following borrowing terms: a 20-year maturity, a 5-year grace period, a 2% interest rate, a 0% default (penalty) interest rate, a 0.25% commitment fee, and a 0.25% management fee (RMB 5,154,320.50). The proceeds of the GCL were to be used by the borrower to finance a commercial contract between the State Revenue Committee (SRC) of Ministry of Finance of Kazakhstan and Nuctech Company Limited (Nuctech), which was signed on September 10, 2019. The purpose of the project was to modernize and technically re-equip Kazakhstan's border checkpoints with China and Uzbekistan, More specifically, the project will support 9 highway checkpoints, one railway checkpoint, and the situation center of the State Revenue Committee (SRC) of the Ministry of Finance of Kazakhstan. These checkpoints and project sites are located in Alakol (Алакөл), Kalzhat (Қалжат), Maikapshagai (Майқапшағай), Bakhty (Бахты), Atameken (Атамекен), Kaplanbek (Қапланбек), Kazygurt (Қазығұрт), Temir Baba (Темір баба), Tazhen (Тәжен), Silk Road (Жібек Жолы), and Friendship (Достық). Nuctech is the EPC contractor responsible for implementation. Project implementation was originally scheduled to commence at the end of 2019 and reach completion in 2022. However, as of early 2022, AidData had not yet identified any evidence of implementation. Upon completion, the project is expect to increase customs supervision, improve border checkpoint (port) infrastructure, reduce corruption risks, and reduce the cost of international commerce.