Kyrgyzstan Invests $14 Million in Strategic Railway Project with China and Uzbekistan
Kyrgyzstan has earmarked $14 million for the construction of the China-Kyrgyzstan-Uzbekistan railway, a strategic project intended to enhance regional connectivity and trade. Under Prime Minister Akylbek Zhaparov’s directive, this allocation is part of a broader investment strategy, with $131.4 million planned over three years. Financial stakeholders include China, which will hold a majority stake in the joint venture, underscoring a significant international collaboration.
The government of Kyrgyzstan has sanctioned a budget of $14 million to facilitate the construction of the China-Kyrgyzstan-Uzbekistan railway, an essential infrastructure initiative designed to bolster regional connectivity and promote trade. This funding decision was formalized by the Cabinet of Ministers, led by Prime Minister Akylbek Zhaparov, whereby the allotted funds will contribute to the joint venture’s capital established with Kyrgyz Temir Zholu, the national railway entity. Additionally, the Kyrgyz Ministry of Finance is tasked with transferring the funds according to the current exchange rate set by the National Bank, and in consultation with the Supreme Council’s fiscal committee. This initial investment signals the commencement of a more expansive financial commitment to the railway project. The proposed state budget for 2025 outlines an ambitious plan for a total investment of KGS 11 billion ($131.4 million) over the next three years to support the establishment of this railway system, with disbursements spaced across subsequent years. The railway project, anticipated to cover a distance of 454 kilometers, was collectively endorsed by Uzbekistan, Kyrgyzstan, and China in September 2022, reflecting a shared vision for enhanced trade routes and stronger regional relations. Nevertheless, financial specifics remain fluid; while estimates of the overall project cost have ranged widely, with initial figures of $5 billion cited by Uzbek officials, Kyrgyz authorities have projected a higher total of $8 billion. In June 2024, a final agreement was reached regarding the project’s ownership structure, with China securing a 51% stake and both Uzbekistan and Kyrgyzstan maintaining equal shares of 24.5%. The total expected financial outlay has been reduced to $4.7 billion, with half of these costs borne by the partnering nations and a supplementary $2.35 billion provided by China as a non-commercial loan. In July, the President of Uzbekistan, Shavkat Mirziyoyev, solidified Uzbekistan Railways’ pledge of $255 million for the project, with an initial $14 million scheduled for release by the end of 2024.
The China-Kyrgyzstan-Uzbekistan railway is a fundamental infrastructure project that seeks to enhance connectivity and trade among the three nations involved. The initiation of this venture underlines the growing importance of regional cooperation in Central Asia, particularly as nations strive to improve their logistical capabilities and economic ties. The project was agreed upon following discussions among Uzbek, Kyrgyz, and Chinese officials, with the plans evolving since September 2022. Financial considerations are central to the initiative, given varying estimates of total project costs and the distribution of investment responsibilities among the participating countries.
In conclusion, the Kyrgyz government’s allocation of $14 million towards the China-Kyrgyzstan-Uzbekistan railway marks a significant step in a collaborative infrastructure endeavor aimed at strengthening regional ties and trade. The commitment of additional funding over the coming years demonstrates Kyrgyzstan’s dedication to this essential project, facilitating economic growth and improved connectivity within Central Asia. The involvement of China and Uzbekistan, along with the financial strategies in place, will be pivotal in bringing this ambitious project to fruition.
Original Source: daryo.uz
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