News Column

KTZ Local Currency Loan

July 19, 2014

Project Status : Active Project Location : Planning Country:Kazakhstan Project number: 46852 Business sector:Transport Public/Private: Public Target Board date:17 Sept 2014 Status: Pending concept review PSD disclosed: 18 July 2014 Project Description : The EBRD is considering providing a local currency facility to Kazakh Railways (KTZ) to finance its logistics and infrastructure programme, which includes a number of components such as purchase of dry cargo vessels for logistic operations, equipment for emergency response and equipment for routine maintenance works on existing rail lines of KTZ. Part of the financing will be used for the restructuring of KTZ s liabilities. Transition Impact : The project will continue the Bank s support of the railway reform programme and will be focused on more widespread private participation and eventually private ownership within the KTZ Group. In line with the Government s plans to reduce state involvement in the economy and strengthen its foundations by increasing private sector participation, the Bank will support KTZ to transfer ownership to the private sector: by (i) providing technical assistance for developing an Action Plan (including timetable and required institutional changes before privatisation) for privatisation of key operating subsidiaries of KTZ; and (ii) supporting the privatisation of KTZ s non-core assets/companies, including wagon construction and repair/maintenance. This will strengthen the government plans to transfer KTZ s assets to a competitive environment. The Client : KTZ (100 per cent owned by Samruk-Kazyna) is a vertically integrated company that manages railway infrastructure and operates freight and passenger train services in Kazakhstan. KTZ plays a key role in the national transport sector with a leading position in freight and passenger traffic. EBRD Finance : Senior loan of up to 120 million equivalent in Kazakh tenge. Project Cost : 120 million. Environmental Impact : Categorised B. This is a new loan to the existing client KTZ and part of the environmental and social due diligence (ESDD) has been completed in June 2014 under the earlier Eurobond operation (Project Sakura) with support from independent external consultants. It identified that while KTZ is working on improving its corporate EHS management systems, standards and practices, its performance in implementing previously agreed Environmental and Social Action Plans (ESAPs) under the existing loans is not yet up to the expected standard and requires improvement to bring the company s and its operating subsidiaries performance in compliance with EBRD s requirements. The Bank has also recently agreed a new corporate ESAP for KTZ s logistics operations subsidiary KTZE, requiring it to develop corporate EHS management systems, build its internal management capacity and provide training for staff, develop its contractor management and supervision procedures, and implement E&S Procedures to struc

Project completion date : 2015-07-31 12:00:00

Major organization : KTZ

Address : 010000, Republic of Kazakhstan Astana city, Konaeva street, 6 Kazakhstan Website :

Country :Kazakhstan

Email :

Financier : European Bank for Reconstruction and Development (EBRD),

Financier address : Financier: European Bank for Reconstruction and Development (EBRD) One Exchange Square London EC2A 2JN United Kingdom Website :

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Source: TendersInfo (India)

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