Almaty Ring Road PPP nearer to realisation
The heavily DFI-backed Almaty Ring Road (BAKAD) PPP project in Kazakhstan has reached commercial close – 16 years since first being approved by the Kazakh government in 2002.
The four-year-construction-plus-16-year availability-based BOT concession was awarded last week to a consortium comprising Alsim Alarko, Makyol, SK Engineering & Construction and Korea Expressway. The $730 million project – the first major infrastructure PPP scheme in Kazakhstan – includes construction of 21 bridges and eight interchanges, and the 66km ring road will feature both four and six lane sections.
The project is to be funded by the EBRD, IFC, Asian Development Bank and the Islamic Development Bank – each expected to provide around $120 million of dollar denominated debt. Commercial bank appetite for 12-year B loans, under the EBRD or IFC umbrellas, will be tested later in the year prior to full financial close.
The deal comes with significant sovereign guarantees for termination compensation and defaults. Availability payments will be in tenge, but exchange rate risk is also covered by the Kazakh government. The structure also includes a local currency debt conversion provision under which conversion costs will be borne by government.Unicase is advising IFC, EBRD and the Kazakh government on the project.
