The World Bank and the Republic of Kazakhstan on Friday signed a US$ 2.125 billion loan agreement for the Kazakhstan South-West Roads Project to help upgrade a 1,062 km stretch of the international trade corridor linking China to Russia and Western Europe through Kazakhstan.

The Loan Agreement was signed by Mr. Shigeo Katsu, World Bank Vice President for Europe and Central Asia on behalf of the World Bank, and Mr. Bolat Zhamishev, Minister of Finance on behalf of the Republic of Kazakhstan.

The objective of the project funded by the World Bank is to increase transport efficiency on the road sections between Aktobe/Kyzylorda oblast border and Shymkent, and to improve road management and traffic safety in Kazakhstan. The project will boost country''s competitiveness and bring significant economic benefits to Kazakhstan, as well as to Kyrgyz Republic, Tajikistan and Uzbekistan.

This project is part of a US$ 6.7 billion International Transit Corridor development program of the Government of Kazakhstan to upgrade approximately 2,800 km of the CAREC corridors within Kazakhstan linking China (at Khorgos) to Russia (at Zhaisan).

"Fully modernized road will offer high quality transportation services to freighters and we expect that traffic along the newly reconstructed corridor will increase significantly because this route is 3,000 km shorter than any other transport corridor connecting Europe and China," said Shigeo Katsu, World Bank Vice-President for Europe and Central Asia. "The project will also have significant positive social impacts by creating new jobs and helping local communities with better access to health and education services."

The World Bank loan has a maturity of 25 years including 5 year grace period. It is planned that the Loan Agreement will be ratified by the Parliament of the RK in September 2009 and that the first construction contracts will be issued later in fall 2009. The main agency responsible for project implementation is the Committee for Roads of the Ministry of Transport and Communication.