China Eximbank provides loan worth approximately $479 million to KazAutoZhol for unspecified road project

On or around April 25, 2019, JSC KazAutoZhol National Company Joint Stock Company (JSC NC KazAutoZhol or азАвтоЖол)— a Kazakh state-owned transportation company — and the Export-Import Bank of China signed a loan agreement for an unspecified road project. The estimated face value of the loan is $479,020,691. The borrowing terms of the loan are unknown. The proceeds of the loan will likely be used by the borrower to finance (a) a commercial contract (with an unknown monetary value) for the 144 km Podstepnoe-Fedorovka-Russian Border (A30) National Expressway Upgrade Project that was signed by CITIC Construction Co. Ltd and KazAutoZhol on June 27, 2019; and/or (b) a commercial contract worth approximately 92 billion tenge ($211,363,928) for the Kabanbay Batyr Avenue Reconstruction Project that was signed by a Kazakh-Chinese consortium (consisting of China Xinxing Construction and Development Co. Ltd and JV Sine Midas Stroy LLP) and KazAutoZhol on May 14, 2020. However, the question of how the loan proceeds are being used requires further investigation.

Additional details

1. Evidence that China Eximbank and KazAutoZhol signed a loan agreement in April 2019 is provided by the following sources: https://www.financialnews.com.cn/yh/shd/201904/t20190429_159106_5.html and https://language.chinadaily.com.cn/a/201904/28/WS5cc50ab7a3104842260b8d8e.html and http://www.beltandroadforum.org/english/n100/2019/0427/c36-1312.html. 2. The Russian translation of the 144 km Podstepnoe-Fedorovka-Russian Border (A30) National Expressway Upgrade Project is «Подстепное-Федоровка-гр. РФ». Участок км 0-36 or Подстепное–Федоровка (144 км) or А-30 «Подстепное – Федоровка – Граница РФ», км 0-144. The Chinese translation is A30公路改造项目 or “波德斯捷普诺耶-费奥多罗夫卡-俄罗斯边境”A30公路改造项目. The Kazakh translation is "Орал-Орынбор" автомобиль жолының ұзындығы 144 км "Подстепное-Федоровка-РФ шекарасы (Илекке)" учаскесін реконструкциялау. 3. In its 2018 financial statements, JSC NC KazAutoZhol 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 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), a $183.95 million PBC for the Astana Bypass Road Reconstruction Project (captured via Project ID#54991), and a $727.2 million PBC for the 326.6 km Karaganda-Balkhash Highway Reconstruction Project (captured via Project 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 KazAutoZhol (https://www.dropbox.com/s/5d5y0hhe1xy9wuu/KazAvtoZhol_2018_FS_ENG.pdf?dl=0). Then, in its 2019 financial statements (https://www.dropbox.com/s/6goifhh40v6gwt5/FS%20KazAvtoZhol%202019%20RUS.pdf?dl=0), JSC NC KazAutoZhol disclosed that as of January 2020 it had borrowed $2,873,983,000 from China Eximbank for various road projects. Therefore, to estimate the face value of the China Eximbank loan that was issued to KazAutoZhol in April 2019, AidData subtracted $2,394,962,309 from $2,873,983,000. 4. 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. 5. It is likely that the April 2019 loan was issued in the form of a preferential buyer’s credit (since all previous China Eximbank loans to KazA8toZhol were provided as preferential buyer’s credits). However, AidData has not yet independently confirmed that the loan was issued as a preferential buyer’s credit. This issue warrants further investigation.

Number of official sources

2

Number of total sources

8