On September 19, 2023, The Multilateral Investment Guarantee Agency (“MIGA”) a member of the World Bank Group, issued a CHF 554.7 million (the equivalent of US$ 621.2 million) guarantee covering the principal and interest on a loan from Citibank N.A (United States of America), ) and Banco Santander, S.A (Spain) to National Railway Company Kazakhstan Temir Zholy JSC (“KTZ”).
Moreover, on May 2, 2025, Citibank N.A. assigned a portion of its loan participation and partially assigned the contract of guarantee to DZ BANK AG Deutsche Zentral-Genossenschaftsbank, New York Branch (Germany) and KfW IPEX-Bank GmbH (Germany).
MIGA’s guarantee provides cover for a 10-year period of the loan against the risk of Non-Honoring of Financial Obligations by a State-Owned Enterprise (NHFO-SOE). The Guarantee will help KTZ to access long term international commercial financing at favorable terms.
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 14 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.
KTZ is embarking on a capital expenditure program during the period 2022-2027 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 capital expenditure program will contribute to the realization of KTZ’s low-carbon pathway strategy. The proceeds of MIGA-guaranteed loan will be used to finance KTZ’s capital expenditure program needs for the years 2023 and 2024.
Environmental Categorization:
The Project is Category B under MIGA’s Policy on Environmental and Social Sustainability (2013). Click here to view the Environmental and Social Review Summary.
Development Impact:
The realization of KTZ’s capital expenditure program is expected to increase the reliability of its railway services and track network that has been subject to substantial physical degradation and is expected to improve the trains safety and increase the travel speed of the trains, while reducing the travel time. The rehabilitation of the railway track will also support KTZ’s efforts to reduce its maintenance and operational costs and increase the useful life of the railway track by 40 years. Similarly, the acquisition of electric locomotives and passenger cars will contribute to the modernization of KTZ’s rolling stock to provide a better-quality service for freight and passenger transportation, increase the travel speed, as well as the expansion of its fleet to accommodate the growing domestic and transit freight volumes and passenger traffic. In addition, the Project will contribute towards enhancing domestic supply chains and regional connectivity within Kazakhstan and supporting domestic suppliers. Furthermore, KTZ’s capital expenditure program will increase the electrification ratio of its rolling stock, contributing to the realization of KTZ’s low-carbon pathway strategy.
MIGA’s guarantee is the first step toward a long-term World Bank Group’s collaboration to support KTZ’s development projects.
