Kyrgyzstan has approved the allocation of $14mn to support the construction of the China-Kyrgyzstan-Uzbekistan railway, a critical infrastructure project aimed at enhancing regional connectivity and trade. The Cabinet of Ministers of Kyrgyzstan, under the direction of Prime Minister Akylbek Zhaparov, signed an order to provide the funds to a project company responsible for the construction.
The allocated funds will be used as a contribution to the authorized capital of the joint venture, represented by Kyrgyz Temir Zholu, the state-owned railway company. The Ministry of Finance has been instructed to transfer the equivalent of $14mn at the National Bank exchange rate, in coordination with the Committee on Budget, Economic, and Fiscal Policy of the Jogorku Kenesh (Supreme Council).
This funding marks the first step in a broader investment plan. According to the draft state budget for 2025, Kyrgyzstan plans to invest KGS 11bn ($131.4mn) over the next three years in the railway project. The investment will be phased in over three years, with KGS 2.42bn ($28.67mn) allocated in 2024, followed by KGS 4.29bn ($50.87mn) in 2026 and KGS 4.37bn ($51.85mn) in 2027.
The railway, which is expected to span 454 kilometers, was agreed upon by Uzbekistan, Kyrgyzstan, and China in September 2022. The project aims to improve regional trade routes and strengthen ties between the three countries. Financial discussions have been a major focus, with estimates for the project's total cost varying. Uzbek Deputy Minister of Transport Jasurbek Choriev initially pegged the cost at $5bn, while Kyrgyz Prime Minister Akylbek Zhaparov suggested a figure of $8bn.
The final agreement on the project was signed in June 2024. Under the terms of the agreement, China will hold a 51% stake in the joint venture, while Uzbekistan and Kyrgyzstan will each hold 24.5%. The total estimated cost of the project stands at $4.7bn. Of this amount, half will be financed by the participating countries, with China providing an additional $2.35bn in the form of a non-commercial loan.
In July, Uzbekistan's President Shavkat Mirziyoyev approved the allocation of $255mn by Uzbekistan Railways for the project, with the first $14mn expected to be allocated by the end of 2024.
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