Kyrgyzstan

Rehabilitation of the Bishkek-Naryn-Torugart Highway

Location: Bishkek-Naryn-Torugart, Kyrgyzstan
Sector: Rail and Road Connectivity
Total cost: $ 445.78 mln 
Chinese partner: The Export - Import Bank of China
China Road and Bridge Corporation
Kyrgyzstani partner: Kyrgyzstan Ministry of Transport and Roads
Other partners: The Arab Coordination Group
The Asian Development Bank
Construction start: 2010
Putting into commission: 2015 

Partners summary

The Export-Import Bank of China is a state-owned policy bank with the status of an independent legal entity. ExIm Bank plays a crucial role in promoting steady economic growth and structural adjustment, supporting foreign trade, and implementing the “going global” strategy. The Bank has been active in various projects in Kyrgyzstan, often linked to BRI. In May 2018, the Kyrgyzstani debt to this bank amounted to $ 1.5 bln, which should be paid back in a period of 5 years. [1]

China Road and Bridge Corporation is one of the four large state-owned companies in China that earliest entered into the international engineering contracting market. CRBC mainly undertakes contracting, investment, development and operation projects such as road, bridge, port, railway, airport, tunnel, real estate and industrial parks. Guided by the “Go Global” and “Belt and Road” initiative of China has seized the opportunity for CRBC to expand business and raise core competitiveness. China Road and Bridge Corporation (CRBC) entered the market of Kyrgyzstan in 2001 and formally established the Kyrgyzstani Office in 2002. Since then, it has undertaken over 20 projects with an accumulating distance of 658 km. [2]

The Asian Development Bank in partnership with member governments, independent specialists and other financial institutions is focused on delivering projects in developing member countries that create economic and development impact. ADB assists its members, and partners, by providing loans, technical assistance, grants, and equity investments to promote social and economic development. The Kyrgyz Republic joined ADB in 1994 and the bank has since approved 44 loans ($1.2 billion) and 40 grants ($662 million) from the Asian Development Fund (ADF) as well as 6 grants ($7.5 million) from Japan Fund for Poverty Reduction. ADB has also financed 104 technical assistance projects ($60.2 million). [3]

The Arab Coordination Group origins developed from the need, identified by the members, to consult to optimize the application of resources and the giving of aid by the various Arab Development Funds. This was adopted as the principal objective of the group. A further objective is to derive benefit from coordinating financing efforts and the accompanying procedures, particularly for major projects and programs that exceed the capacity of any single institution. The Coordination Group currently consists of ten institutions, four of which are national institutions including the Kuwait Fund for Arab Economic Development, the Saudi Fund for Development, the Abu Dhabi Fund for Development, the Qatar Development Fund, and five regional organizations consisting of the Arab Fund for Economic and Social Development, Islamic Development Bank, OPEC Fund for International Development, the Arab Bank for Economic Development in Africa, the Arab Gulf Program for United Nations Development Organizations (AGFUND) as well as the Arab Monetary Fund. 

Description of the project

Bishkek-Naryn-Torugart road is one of the main transport routes of Kyrgyz Republic and the part of "Europe-East Asia" CAREC Transport Corridor. The road connects the three regions of the country (Chui, Naryn and Issyk-Kul) and allows traffic to transit through the country’s territories, from the Torugart border point in the south to the Kordai settlement in Kazakhstan in the north. It is the most important of the two main routes linking Kyrgyzstan to China, from where, via the Karakum highway, it provides access to Pakistan and the ports of the Indian Ocean. The total length of the road is 539 km. It was constructed about 60 years ago, and over the last 20 years was operated without capital repair. [4]

Under the rehabilitation project the following agreements were signed.

1. The Agreement between the Government of Kyrgyz Republic and Exim Bank of China on allocation of loan to finance the road section from 9 to 272 km dated October 15, 2009.

2. The Grant Agreement between the Government of the Kyrgyz Republic and Asian Development Bank to finance the road section from 400 to 439 km. [5]

3. The Financial Agreement between the Government of the Kyrgyz Republic and Asian Development Bank dated August 5, 2009. At the expense of these funds, the road section from km 365 to km 400 and from km 439 to km 470 will be rehabilitated. [6]

4. The Loan Agreement between the Government of the Kyrgyz Republic and Arab Coordination Group on financing a part of the works at the section from 272 to 365 km. [7]

5. The Loan Agreement between the Government of the Kyrgyz Republic and Asian Development Bank on financing the section from 479 to 539 km. [8]