President Shavkat Mirziyoyev's approval on July 8, following the signing of a cooperation agreement in Beijing on June 6, marks a pivotal moment in regional cooperation efforts. The railway route is set to connect Kashgar in China through Torugart, Makmal, Jalalabad, and Andijan in Kyrgyzstan, before reaching Uzbekistan.
According to a presidential decree, Uzbekistan Railways will gradually receive loans from the Fund for Reconstruction and Development totaling $255mn. This funding aims to establish Uzbekistan's stake in the joint project company "China-Kyrgyzstan-Uzbekistan". By the end of this year, $14mn will be allocated. The loans carry a 5% annual interest rate over 15 years, including a 7-year grace period.
As per the agreement signed on June 6, Uzbekistan and Kyrgyzstan will each hold a 24.5% share in the project company, with the remaining 51% owned by China. The projected authorized capital of the company is expected to reach at least $1.04bn.
The Ministry of Transport of Uzbekistan has been tasked with overseeing the project's implementation within the country, under the monitoring of the Cabinet of Ministers and relevant ministries. This railway initiative is expected to significantly enhance transport capabilities, facilitating smoother movement of goods and passengers between these countries.
Preparations for this extensive railway network began in 2022, with the agreement on a 454 km route finalized after detailed discussions and feasibility studies. Challenges in funding delayed the project, with estimates varying between $5bn and $8bn. However, recent commitments from Kyrgyzstan, including $500mn earmarked for initial construction, and ongoing negotiations indicate a renewed momentum towards realizing this critical infrastructure.
Comments (0)