EBRD supports Astana airport upgrade, tariff reform with €42.5 million loan
June 03. EBRD
By Svitlana Pyrkalo
The European Bank for Reconstruction and Development (EBRD) is supporting the development of Kazakhstan’s air transport sector with funding for a comprehensive programme to upgrade the airport in Astana.
Built before Astana became the capital of Kazakhstan, the airport has already reached full capacity. It urgently needs to expand so it can cope with an increasing flow of traffic and with spikes expected during future events such as Astana Expo in 2017.
The EBRD is providing a 15-year, 8.5 billion tenge (€42.5 million) loan to JSC Astana International Airport (wholly owned by the railway operator KTZ) for the expansion and modernisation programme.
The Development Bank of Kazakhstan is also supporting the project with a 20-year loan for the same amount.
The runway, taxi and apron areas will be modernised and new lighting and meteorological equipment will be purchased in order to double the capacity of the airport. The project will bring the airport into compliance with UN civil aviation regulations in areas such as safety and standard of services.
The project will also include reforms to some important aspects of the airport’s operation. Private sector companies will be able to double the amount of non-aviation services provided to the airport, including sales of food and luggage handling.
An important aspect of the project is tariff reform in the air transport sector of Kazakhstan, which will affect all of the country’s airports, including the privately owned. The tariffs for regulated airport services, set as far back as 2004, will be made flexible and cost-reflective.
Signing the loan agreement in Astana, ahead of a meeting of Kazakhstan’s Foreign Investors Council, EBRD President, Sir Suma Chakrabarti, said: “The Astana airport project is our first major investment in the airport sector in Kazakhstan, but for me what is most significant are the reforms that are built into the project. Since we entered an Enhanced Partnership Agreement with the government of Kazakhstan a year ago, we have been cooperating very closely on liberalising state-run and municipal services, and this project will demonstrate how public and private sectors can work together to benefit all.”
Since the beginning of its operations in Kazakhstan 22 years ago, the EBRD has invested over US$ 7 billion in the country’s economy.