'New Silk Road' to link Europe and Asia
By Richard High18 November 2008
The Asian Development Bank (ADB) is to lend Kazakhstan US$ 700 million to help improve a major road it says will transform the country's economy.
The new "Central Asian Regional Economic Cooperation (CAREC) Transport Corridor I" will run 2715 km, from Khorgos on Kazakhstan's border with the China, through Almaty and Shymkent, and to the western border with Russia.
Commenting on the loan, Juan Miranda, director general of ADB's Central and West Asia Department, said, "This new silk road will boost trade between Beijing and Brussels, and create extraordinary economic opportunities for the people of Kazakhstan and their neighbours."
ADB will partner with the Islamic Development Bank (IDB) and the Japan International Cooperation Agency (JICA) to improve a 480 km section of the road network in the southern part of Kazakhstan. The overall investment for the project is put at U$ 6.7 billion. The ADB will provide a US$ 700 million multi-tranche financing facility, while the IDB will provide US$ 414 million and the JICA US$ 150 million.
Other financiers behind the overall corridor development plan include the Government of Kazakhstan, the private sector, the World Bank, and European Bank for Reconstruction and Development (EBRD).By 2020, the road is expected to increase Kazakhstan's gross domestic product (GDP) by +68% above the 2010 baseline, and to increase the GDP of neighbouring Central Asian countries by +43%.
China, Russia, and the European Union (EU) will also benefit from the road project. By 2020, the China's GDP is expected to grow +6% over its 2010 baseline levels, while the GDP of Russia and the EU are expected to grow an additional +4%.