(MENAFN- Trend News Agency) BAKU, Azerbaijan, February 27. The European
Bank for Reconstruction and Development (EBRD) will make major
investments in the development of cargo flows along the
Trans-Caspian International Transport Route (TITR, or Middle
Corridor), Huseyin Ozhan, the EBRD Director for Kazakhstan, told
Trend in an
exclusive interview.
Investment needs to significantly improve the Central
Trans-Caspian Network
At the Second European Union (EU)-Central Asia Economic Forum,
held at the end of May 2023, the European Bank for Reconstruction
and Development (EBRD) presented a report on sustainable transport
linkages between Central Asia and Europe. The European Commission
funded the study, which identified country-specific needs and
methods to cut transportation costs, improve operational
efficiency, and promote private-sector engagement. These included
digitizing transportation documentation, strengthening the
public-private partnership (PPP) environment, easing trade,
promoting market liberalization, and improving tariff-setting
systems.
The study argued that the Trans-Caspian Corridor, which connects
Central Asian countries, could be the ideal cargo transit route,
complementing the geopolitical constraint on the Eurasian Northern
Corridor through Russia. At the same time, it stated that upgrading
and expanding this transport corridor will considerably help
regional trade in Central Asia. With freight increasing along this
route, the present Caspian Sea infrastructure may create a
bottleneck. The report emphasized the importance of rehabilitating
and modernizing rail and road networks, increasing rolling stock,
improving border crossings, and constructing multimodal logistics
centers and auxiliary network links throughout Central Asia.
According to the Bank's estimates, the overall investment needs for
34 identified priority projects necessary to considerably upgrade
the Central Trans-Caspian Network are in the region of 18.5 billion
euros.
EBRD's investment to develop cargo flows across
Kazakhstan and along the TITR
Kazakhstan is the world's ninth-largest country, covering an
area of 2,700,000 square kilometers (the same size as Western
Europe). Building new or improving existing infrastructure to
accommodate increased cargo traffic is not a simple process. For
many years, the EBRD has worked with key public and private sector
enterprises in Kazakhstan, including KTZ (Kazakhstan Railways), to
increase operational efficiency and optimize traffic patterns. Last
year, the EBRD inked a number of projects in Kazakhstan that help
to keep freight traffic moving across the country and along the
Trans-Caspian International Transport Route (TITR).
Transit cargo through Kazakhstan often begins its journey in the
town of Khorgos, on the Chinese border. It then has to pass through
the country's largest city, Almaty, with its congested traffic.
This is home to Kazakhstan's largest private rolling-stock
operator, Eastcomtrans. An EBRD loan of US$40 million (36.9 million
euros) will help Eastcomtrans expand its container handling
capacity at one of the most congested junctions and ensure the
uninterrupted operation of its railway park, which represents
around 8 percent of the country's total rolling stock. The funds
will also be used to develop the Zhetygen logistical center,
acquire up to 250 new rail cars, and maintain existing ones.
Situated close to the border, the upgraded logistical hub will
serve as an important junction on the Trans-Caspian Corridor.
In 2023, the EBRD also provided a 25 million euro loan to one of
the fast-growing local logistics companies, Atasu Group, and a €2.8
million loan to Temirservice Astana, which operates last-mile
railway infrastructure and railway tracks around the capital city.
These are dynamic and rapidly developing private logistics
companies. The bank's funds will be used to increase their
efficiency and will contribute to greater reliability in the supply
and distribution of goods for regional and domestic needs.
The EBRD boosted the financial and operational resilience of
Kazakhstan Temir Zholy (KTZ, or Kazakhstan Railways) by investing
up to 100 million euros in its Eurobond. The investment will help
Kazakhstan's state-owned railway operator implement a range of
crisis response measures, including the reorganization of its
transit freight operations.
The Middle Corridor's capacity growth
potential
The EU's Global Gateway strategy estimates that the volume of
cargo moving through the Central Trans-Caspian Network could
increase from 18,000 20-foot equivalent units (TEUs) of cargo or
containers currently to 130,000 TEUs by 2040.
For customers in Europe and Asia, it is important to know not
only how long it will take their container to travel to their
desired destination but also exactly when it will get there so they
can better manage commodity stocks and plan trade cycles. Modern
and efficient logistics and transportation methods are essential to
achieving an optimal free-flow transit time of less than 2 weeks to
cross Kazakhstan and the Caspian Sea, and with relevant
investments, this is achievable.
EBRD's major investment to develop the Middle
Corridor
Indeed, in January 2024, at the Investors Forum for EU-Central
Asia Transport Connectivity in Brussels, the EBRD expressed its
readiness to invest around 1.5 billion euros in Trans-Caspian
Corridor-related infrastructure and associated transport solutions
over the next 2–3 years.
At the Brussels Forum, the Ministry of Transport of the Republic
of Kazakhstan and the EBRD agreed to cooperate on strategic
initiatives in road, rail, port, and logistics infrastructure to
develop the TITR. According to the memorandum of understanding
signed by EBRD Vice President Mark Bowman and Kazakhstan Minister
of Transport Marat Karabayev, the parties will work to facilitate
the increase in freight traffic between Central Asia and Europe
through Kazakhstan by implementing necessary reforms and securing
the financing needed for sustainable multimodal transport
infrastructure.
Priority projects will include the modernization of container
handling equipment and the development of a container terminal at
the Aktau Port, double tracking and the electrification of the
national railway network, the development of the Shalkar-Beyneu
road, and the rehabilitation of road sections along or adjacent to
the TITR, such as relevant sections of Aktobe-Kyzylorda.
The Bank is also exploring a number of PPP initiatives and
sustainable infrastructure projects in Uzbekistan and the Kyrgyz
Republic related to the TITR.
EBRD's contribution to the development of the transport
sector in Kazakhstan
Over the last decade, the EBRD has provided around 2.4 billion
euros to support transport sector projects in Kazakhstan. Our
current portfolio of infrastructure projects in the country is 1.38
billion euros through 41 projects. 82 percent of them are in the
public sector.
Reliable transport and regional connectivity are vital for
Kazakhstan. The EBRD has been supporting the national road
operator, KazAvtoZhol, by financing the rehabilitation and upgrade
of key roads between various regions of the country and by
connecting Kazakhstan with neighboring countries.
The EBRD has played a major role in organizing financing for the
construction of the 66-kilometer BAKAD ring road around the city of
Almaty and brought the deal to a financial close, making this the
largest public-private partnership (PPP) project in both Kazakhstan
and Central Asia. It is also the first PPP project in the region to
have been structured with the involvement of international advisers
and through an open, international competitive process.
In 2021, the EBRD facilitated better regional and international
connectivity for air travelers by arranging a loan to develop key
infrastructure at Almaty International Airport. The biggest-ever
private investment in airport infrastructure in Kazakhstan and the
region will help boost operations at the busiest airport in Central
Asia.
The Bank has helped the national airline, Air Astana, construct
the first aircraft maintenance facility in the country and in the
whole of Central Asia. It has also granted liquidity assistance to
the national carrier, which has been impacted by the pandemic.
Various funding facilities granted by the EBRD to Kazakhstan's
state railway corporation, Kazakhstan Temir Zholy (KTZ, or
Kazakhstan Railways), aided in improving operational efficiency and
implementing energy-saving measures throughout the railway
network.
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