WASHINGTON, February 13, 2015 – The World Bank’s Board of Executive Directors today approved a US$195 million IBRD loan for the Pap-Angren Railway Project in Uzbekistan.
The project will help improve transport connectivity in the Ferghana Valley by enhancing the efficiency of transport services into and out of the Uzbekistan part of the Valley. The railway link will improve year round inter-regional accessibility for a population of 7.6 million. Small and medium enterprises will be able to expand their market access and increase their profits. The construction of the railway will also stimulate enterprises’ growing demand for workers in some key sectors such as textiles or the services sectors.
The project contributes to the Central Asia Regional Economic Cooperation or CAREC Program that is implementing a Transport and Trade Facilitation Strategy focused on 6 transport corridors. The Pap-Angren investment is located along Corridor 2 that runs from the east to the west, from China to the Caucasus. The project also supports the government’s Medium Term Industrial Modernization and Infrastructure Development Program and is aligned with the main pillars of the World Bank Country Partnership Strategy for 2012-2015.
“The project aligns well with the World Bank Group twin goals of reducing poverty and enhancing shared prosperity,” said Mr. Junghun Cho, Country Manager for Uzbekistan. “It will help reduce the income disparity between the Uzbek part of the Ferghana Valley and the rest of Uzbekistan. The project will raise employment and business opportunities by increasing the rate of economic growth in the Ferghana Valley. It will also facilitate diversification of the economy by improving infrastructure to increase economic productivity and competitiveness.”
The project development objectives are to reduce transport costs and to increase transport capacity and reliability through the construction of a rail link between the Uzbek part of the Ferghana Valley and the rest of Uzbekistan. The line will offer a faster, cheaper, all season, and safer and more reliable transport service. The State Joint Stock Railway Company “Uzbekistan Temir Yullary” (UTY) is forecasting about 600,000 passengers to use the new infrastructure and about 4.6 million tons goods to be transported during the first year of operation. The project is expected to reduce greenhouse gas emissions by about 200,000 tons annually.
The total project cost is US$1,633.75, of which US$1,088.75 million is provided from the UTY own funds, the state budget and the Fund for Reconstruction and Development of Uzbekistan, US$350 million from China Exim Bank, and US$195 million from the World Bank (in particular, the International Bank for Reconstruction of Development or IBRD).
The project to build a single 124 km track rail link between Angren and Pap, including a 19.2 km rail tunnel through the Kamchik Pass, includes the following six components:
- Rail Main Infrastructure (estimated total cost US$1,438.75 million)
- Rail Electrification, Signaling, Track Maintenance and Railway Video Surveillance System (estimated total cost US$154 million, 100% IBRD financing)
- Power Distribution Line (estimated total cost US$35 million, 100% IBRD financing)
- Technical assistance to UTY for Supporting Railway Construction (estimated cost US$0.5 million, 100% IBRD financing)
- Technical Assistance to UTY for Improving Railway Logistics (estimated cost US$1.0 million, 100% IBRD financing)
- Implementation Support (estimated cost US$4.5 million, 100% IBRD financing)
Uzbekistan joined the World Bank in 1992. The World Bank’s mission in the country is to improve people’s livelihoods through being a partner in economic reforms, supporting the modernization of the country’s social sectors and infrastructure, and sharing its knowledge and experience with the government and the people of Uzbekistan. Current World Bank commitments to Uzbekistan amount to about US$1.6 billion.