Since Almaty is such an important contributor to the country’s economy and job generation, finding a way around its traffic woes topped the government’s to-do list. The new Almaty Ring Road, an IFC-supported public-private partnership (PPP), will increase road safety, cut transportation costs, and shorten travel times for commuters by up to an hour. It will also reduce city noise and pollution.
IFC was the lead advisor for this PPP, a 20-year concession to design, build, finance, operate, and maintain the road. The winning bidder, a consortium of companies from Turkey and South Korea, will maintain the road in compliance with predefined performance criteria and collect tolls on behalf of the government. In exchange, the government will provide the private partner with annual payments.
This landmark PPP was the first of its type and scale in Kazakhstan, and will be a significant part of the New Silk Road connecting Western China with Western Europe—turning Kazakhstan into a logistical hub. When finished, the Almaty Ring Road is expected to improve the country’s access to global markets for local businesses, spurring trade and driving economic growth.
The Almaty Ring Road project is an example of the World Bank Group’s Maximizing Finance for Development approach— whereby the World Bank Group and other development partners like the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank, and the Islamic Development Bank help a country maximize its development resources by drawing on private financing.
IFC’s support is part of a wider effort to encourage investment and increase competitiveness of Kazakhstan’s key non-oil sectors, helping the country transform into a high-income country and pursue its development ambitions.
Transforming Kazakhstan’s transport sector and allocating the resources needed to sustain growth have been high priorities for the Government of Kazakhstan during the last decade, and the Almaty Ring Road will be a critical component in helping achieve these goals.
Original source: IFC
Published on 08 June 2018
