The Road to the SDGs

PURPOSE X The BAKAD Almaty Ring Road Project is a major infrastructure initiative that will transform lives and businesses in Kazakhstan. Having recently won international recognition with the title of Europe Transport Deal of the Year at the PFI Awards 2020, the project will help Almaty City in Kazakhstan to build a ring road that will address the following needs: – Reduction of travel times, traffic congestion and traffic accidents in the city – Creation of a bypass for commercial vehicles following the ‘Western China — Western Europe’ transnational highway, which is part of the Chinese ‘One Belt, One Road’ initiative – Advancing the integration of the city and region into the Central Asian economies. X The project’s objective is the financing, construction and operation of 66 km of tolled highway. X By removing a major transport bottleneck in Almaty, the project will lead to a reduction in local air pollution and greenhouse gas emissions. X It is the largest infrastructure project in Kazakhstan outside the oil and gas sector. X It is expected to move the economy away from reliance on oil and gas by encouraging new methods of investment such as PPPs. X The ring road project will help Kazakhstan to achieve its stated aspiration to join the ranks of the 30 most developed countries of the world by achieving OECD standards and improving its chances of achieving its targets for the SDGs. METHOD X In response to the identified needs, IsDB worked with various co-financiers to provide funding for the BAKAD Investment and Operation Limited Liability Partnership to be set up as a project company to develop and operate a 66km ring road north of the city of Almaty. X The funding is arranged on a PPP basis and this is the first PPP project to take place in Kazakhstan. X IsDB’s Murabahah approach (also known as cost-plus) allows for the lender to inform the borrower of a fixed mark-up on repayments in place of an interest rate. Crowding-in market resources: first project of its kind in Kazakhstan I sDB is collaborating with other multilateral co-financiers to provide joint funding of US$ 585 million for a ring road project in Kazakhstan, heralding the first public-private partnership in the country The BAKAD Almaty Ring Road Project is expected to serve as a benchmark for international investors to exploit PPP models for infrastructure projects in the region in the future [ 46 ] SDGs