Turkmenistan Gets $125 Million ADB Loan for a Regional Railway Project

Turkmenistan will receive a $125 million loan, its first from the Asian Development Bank (ADB), to fund the North–South Railway Project, to install power, signaling, and telecommunication systems on 311 kilometers (km) of the 934 km planned North–South Railway Corridor. The line will improve Turkmenistan’s access to Kazakhstan, Persian Gulf Countries, the Russian Federation, and South Asia, expanding economic opportunities at home and supporting increased trade with Central Asia and beyond.

The project will fund track maintenance and safety equipment, as well as capacity development for the Ministry of Railway Transport to effectively manage the project and its overall assets and finances.

ADB Project Officer Shakeel Khan said, “This line will become the region’s main rail route for transporting bulk goods such as oil, agricultural products and textiles, which will significantly boost regional trade and provide new sustainable economic growth and opportunities at home.”

With the new rail line in place, the distance to transport goods from Central Asia to Persian Gulf ports is expected to be cut by about 680 km. This will reduce travel time and costs, provide direct employment, support small business development, and open up opportunities for tapping coal, gold, and other minerals in areas along the route.

The loan from ADB’s ordinary capital resources will make up 75% of the total project cost of $166.7 million, with the Government of Turkmenistan funding the balance. The loan will have a 25-year term, with a 5-year grace period. The Ministry of Railway Transport acts as the project’s executing agency and the project should be completed by September 2012.

Meanwhile, the Government of Turkmenistan, together with the Islamic Development Bank, is financing the rail track. This track is expected to become an important part of a transcontinental transport corridor being developed under the Central Asia Regional Economic Cooperation Program.

Project Link: North–South Railway Project – Loan
News Release: Turkmenistan Gets First ADB Loan for Regional Rail Link