EBRD to lend $225 mln to Kazakh railway operator KTZ for debt restructuring

ALMATY. July 24 (Interfax) - The European Bank for Reconstruction and Development (EBRD) has provided a senior corporate loan of up to 200 million Swiss francs ($225 million or about 106 billion tenge) to national railway operator Kazakhstan Temir Zholy (KTZ), the EBRD said in a statement.

"Loan proceeds will enable the borrower to restructure its financial obligations maturing in 2024, free up capital and mobilize additional financial resources to continue implementation of infrastructure investment projects to support further development of the Trans-Caspian International Transport Route," it said.

The loan facility was approved on July 3.

No details of terms and conditions of the loan have been provided.

In June 2024, the chairman of the Supreme Audit Chamber of Kazakhstan, Alikhan Smailov, said that KTZ was unable to pay its debts and was on the verge of default. As at January 1, 2024, the company's debts stood at 2.9 trillion tenge and continued to grow. As much as 1.3 trillion tenge or 45% of the total debts will have to be used to restructure the previous financial obligations, he added.

Smailov also said that 73% of the total cargo turnover of KTZ for the period from 2020 to 2023 was transported at rates below the actual cost. Losses on regulated tariffs amounted to 907 billion tenge.

KTZ is a transport, warehousing and distribution company, which is part of Kazakhstan's National Wealth Fund Samruk-Kazyna. KTZ operates the country's railways, the infrastructure of seaports and airports, transportation and warehousing facilities.

The Trans-Caspian International Transport Route (TITR) is an international transport corridor that runs through China, Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and further to Turkey and European countries. The Baku-Tbilisi-Kars railway is part of the corridor. The capacity of TITR is expected to reach 10 million tonnes of cargoes a year by 2025.