The first-of-a-kind road public-private partnership (PPP) - Big Almaty ring road PPP project (BAKAD) in Kazakhstan has reached financial close. The largest infrastructure project in Kazakhstan outside the oil and gas sector will help remove a major transport bottleneck in Almaty and increase the transit throughput capacity while reducing local air pollution.

The project is being developed under a 20-year availability-based concession agreement signed on 8 February 2018, and is supported by equity funding provided by Turkish-Korean consortium formed by Alsim Alarko Sanayi Tesisleri ve Ticaret A. Ş., Makyol Inşaat Sanayi Turizm ve Ticaret A.Ş, Korea Expressway Corporation and SK Engineering & Construction Co. Ltd.

The USD585 million debt financing involves two debt tranches provided by the European Bank for Reconstruction and Development and Eurasian Development Bank, alongside a bespoke installment sale structure developed to meet Islamic Development Bank’s specific shariah requirements within local law and transaction constraints. The banks were advised by Allen & Overy.

The financing package of US$ 585 million consists of an A-loan of US$ 225 million for the EBRD’s own account, B-loan of US$ 125 million syndicated to Bank of China (US$ 100 million) and PGGM (US$ 25 million), as well as parallel loan facilities of US$ 135 million by the Eurasian Development Bank and of US$ 100 million by the Islamic Development Bank.

The project is the first road concession to be awarded and the first public-private partnership (PPP) project in Kazakhstan. It is also the country’s first large infrastructure project to be completed with private capital outside the commodities sector and is expected to be the precursor of several road concession projects in the foreseeable future.

The project involves the development of a 66-km long ring road around Almaty. When complete, the road will comprise a 51.5 km long six-lane section and a 14.5 km long four-lane section. The project also includes the construction of eight junctions, 21 bridges, 18 viaducts and one railway truss. The new Almaty Ring Road will increase road safety, cut transportation costs, and shorten travel times for commuters by up to an hour. It will also reduce city noise and pollution.

The Kazakhstan legal counsel to the development banks was AEQUITAS Law Firm.

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