Kyrgyzstan will receive a $305 million soft loan from China to meet its financial obligations on China — Kyrgyzstan — Uzbekistan railway project.
The framework agreement between the two countries was approved today by the Zhogorku Kenesh Committee on Fuel and Energy, Transport, Architecture, and Construction.
According to Deputy Minister of Transport and Communications Almaz Turgunbaev, the loan is provided for 25 years with a five-year grace period at 1.5 percent per annum. A grant element makes up 35 percent of the total loan amount, making the financing terms highly preferential.
The official noted that the total cost of the project is estimated at $5 billion. The lion’s share of the funds—$4.7 billion—will be used for the construction of the section passing through Kyrgyzstan. Uzbekistan mostly has existing railway infrastructure; only repair work is planned.
To implement the project, the three countries established a joint venture. Kyrgyzstan’s financial share is 24.5 percent. Bishkek will cover its share through the state budget and a loan from China, which will finance the project equally.
