What happened
The joint railway project company “China — Kyrgyzstan — Uzbekistan” signed a financing agreement with a syndicate of Chinese banks. The ceremony took place on December 16 in Bishkek.
The State Development Bank of China and the Export-Import Bank of China will allocate a loan of $2.3 billion, which is half of the project’s estimated cost. The funds are provided for a period of 35 years, the repayment of which will be carried out by the joint design company.
The remaining portion of the investments will be made by the participating countries as contributions to the company’s authorized capital.
Why is this important
The financial closure is a key step in launching one of the region’s largest infrastructure projects. The railway will strengthen the transport connectivity of Central Asia with China, reduce logistics routes, and increase the transit potential of Uzbekistan and Kyrgyzstan. Early fulfillment of the terms of the investment agreement reduces the risk of delays and increases investor confidence.
Numbers and facts
- $2.3 billion — loan volume from Chinese banks (50% of the project cost).
- The loan term is 35 years.
- Shares in the authorized capital of the project company:
— China — 51%;
— Uzbekistan — 24.5%;
— Kyrgyzstan — 24.5%. - The length of the railway in Kyrgyzstan is 304 km.
- About 40% of the route will be covered by 50 bridges and 29 tunnels with a total length of 120 km.
Context
According to the terms of the investment agreement, the full financial support of the project was to be completed by December 20. According to Kyrgyzstan’s vice-premier, Bakyt Torobayev, the demand was fulfilled ahead of schedule. The management of the joint venture emphasized that the priority will be the effective use of funds and the timely fulfillment of obligations. The project is considered strategic for the development of international transport corridors.
