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EBRD finances completion of Kazakh power line
North-South line brings long-term finance from international commercial banks
The European Bank for Reconstruction and Development is lending $87.8 million
for the completion of a new transmission line allowing the north of Kazakhstan
to transmit its surplus power to the more populated south of the country. This
will both aid the development of a Central Asian regional energy market and,
by benefiting both populations and businesses based in the south, promote the
diversification of Kazakhstan’s economy away from dependence on oil and gas.
The loan to the state-owned Kazakhstan Electricity Grid Operating Company
(KEGOC) finances the construction of the second and third sections of the new
500 kV North-South electricity transmission line over the 865 km of the line
running between Ekibastuz and YukGres. Two substations will also be expanded.
This deal follows a $60 million loan agreement signed last year for the first,
270 km, of line between YukGres and Shu.
The EBRD is acting as lender of record for the full $87.8 million. Of this, a
total of $35 million has been syndicated to Raiffeisen Zentralbank Oesterreich
(RZB), Bayerische Landesbank (BLB), Calyon and Citibank.
This commercial financing demonstrates KEGOC’s ability to attract
international commercial banks for long maturities on the basis of a
domestically based security, said EBRD President Jean Lemierre at the signing
in Almaty. The EBRD’s $52.8 million portion is being lent for 12 years, with
commercial banks providing 9-12 year credit. The Development Bank of
Kazakhstan is also lending the equivalent of $53 million, and the
International Bank for Reconstruction and Development has agreed to provide a
$100 million sovereign-guarantee loan for the project.
The financing constitutes an important milestone in KEGOC’s corporate
development, in particular in its ability to attract competitive financing
from international commercial banks without the benefit of a sovereign
guarantee, said Anthony Marsh, Director of the EBRD’s Power and Energy Team.
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