The authors of the report emphasize that many countries face restrictions on attracting funds from a single source, which is necessary to maintain financial sustainability and the stability of public debt.
In this context, the implementation of the infrastructure project may require investments comparable to the economy of an entire country.
“For example, the total cost of constructing the section of the Kyrgyz railway China — Kyrgyzstan — Uzbekistan is estimated at $4.7 billion, which is equivalent to about one-third of the GDP of the Kyrgyz Republic for 2023,” the experts note.
The EDB believes that cooperation among multilateral development banks could be an effective solution for financing such large-scale projects.
Note:
The loan agreement for the implementation of the China—Kyrgyzstan—Uzbekistan railway project was signed between the LLC "China—Kyrgyzstan—Uzbekistan Railway Company" (Joint Project Company) and a syndicate of banks from the People's Republic of China, which includes the China Development Bank and Exim Bank.
The total cost of this project is estimated at $4.7 billion. Of this amount, about $2.3 billion will be provided by China in the form of a 35-year loan to the Joint Project Company established by the three countries.
The repayment of this amount will be carried out by the Joint Project Company. Another $2.3 billion will be contributed by the three countries to the authorized capital of this company in the following percentage ratio: China – 51%, Kyrgyzstan and Uzbekistan – 24.5% each.
