KazAvtoZhol signs $700 million financing agreement with three Kazakhstani banks
Kazakhstan’s national road operator, KazAvtoZhol, has signed a loan agreement worth up to $700 million with a consortium of Kazakhstani banks to support road infrastructure development and expand financing for national infrastructure projects, Qazinform News Agency cites primeminister.kz.
The agreement was signed during a roundtable discussion on financing the road sector and involving second-tier banks in infrastructure development.
The consortium comprises Halyk Bank, Bank CenterCredit and Eurasian Bank. The financing will help expand the pool of investment resources available for KazAvtoZhol’s projects, which previously received support from the Development Bank of Kazakhstan (DBK).
In previous years, the DBK provided financing for road repairs and modernization. Under the new agreement, cooperation will shift to a long-term arrangement extending until 2034. Halyk Bank will serve as the organizer of the syndicated financing and as the agent bank.
Deputy Prime Minister and Minister of National Economy Serik Zhumangarin said the agreement would help redistribute the credit burden among financial institutions and free up part of the DBK’s lending capacity to finance new priority infrastructure projects.
Zhumangarin emphasized that the agreement reflects Kazakhstan’s efforts to increase the involvement of commercial banks in financing the real sector of the economy and attract private capital to major infrastructure projects.
He noted that the arrangement does not involve raising new loans for road construction. Instead, it provides for refinancing existing obligations to the DBK using funds from commercial banks.
According to the deputy prime minister, this approach will expand the banking sector’s participation in infrastructure financing while allowing the DBK to redirect its resources toward new development priorities.
Greater involvement of commercial banks in road infrastructure development is expected to mobilize additional domestic investment and reduce the dependence of major national projects on state financing.
The mechanism is also intended to encourage a more active role for commercial banks in economic development without significantly increasing government budget expenditures.
Earlier, Qazinform reported the Development Bank of Kazakhstan (DBK), a subsidiary of Baiterek Holding, had provided financing for the development of a solar power plant park in the Kyzylorda region, supporting Kazakhstan’s transition to renewable energy.