Project description
National Company Kazakhstan Temir Zholy JSC (“KTZ”) is embarking on a capital expenditure program (“CAPEX program”) during the period 2025-2029 to rehabilitate and repair its existing railway tracks network, as well as to modernize, upgrade and expand its fleet of electric locomotives, and passenger cars to improve its freight and passenger transport safety, speed and capacity. In addition, this CAPEX program will contribute to the realization of KTZ’s low-carbon pathway strategy.
The proposed MIGA non-honoring of a state-owned Enterprise obligations (NHSOE) cover is to guarantee the financial obligation of KTZ on US$ 200 million (or the equivalent in CHF) seven-year loan from Standard Chartered Bank, United Kingdom, and/or other financial institution yet to be identified to finance its green qualifying CAPEX Program needs for the period of 2025-26. MIGA Gross Guarantee Amount will be up to US$ 232.75 million (or the equivalent in CHF), covering the loan principal amount, future interest, MIGA premium and other related transaction costs.
This project builds on previous MIGA support to KTZ green capex program for 2023-2024.
KTZ is a vertically integrated group and is 100% state-owned enterprise (via Samruk-Kazyna JSC, Kazakhstan’s Sovereign Wealth Fund). The group owns and operates all the state railway network and is the country’s largest owner of rolling stock. KTZ plays a key role in the national and regional transport system, providing economic connectivity with 17 regions of Kazakhstan, and with five neighboring countries, rendering KTZ as one of the 15 largest railway companies in the world in terms of freight turnover.
Environmental Categorization
The Project is a Category B under MIGA’s Policy on Environmental and Social Sustainability (2013). Click here to view the Environmental and Social Review Summary.
Development Impact
KTZ is central to Kazakhstan’s freight and passenger transport, and a leading provider of cross-border/transit railway freight services in the region. By supporting the KTZ’s CAPEX program, the Project is expected to rehabilitate aging railway track infrastructure that has been subject to physical deterioration to improve reliability, safety and quality of services. In addition, the acquisition of electric locomotives will allow KTZ to accommodate the growing domestic and transit freight volumes and enhance the travel speed. The purchase of electric passenger cars to replace the depreciated existing cars is expected to improve the reliability, speed, and safety of passengers’ transport services. The Project is also expected to contribute to strengthening domestic supply chains and regional connectivity by improving service quality and reliability of freight and passenger services across the country and facilitating integration into global value chains.
The Project aligns with the WBG priorities in Kazakhstan as detailed in the Country Partnership Framework (CPF) FY2020-2025, particularly the objective of “strengthening connectivity infrastructure and regional service delivery for better local and regional integration”. The Project is also aligned with the Systematic Country Diagnostics pillar on integration and connectivity through its focus on maintaining transport infrastructure. Additionally, the Project supports the Country Climate and Development Report (CCDR) recommendation to continue rail electrification and logistical improvements as near‑term measures to improve Kazakhstan’s rail efficiency and reliability and contribute to decarbonization.
