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A&O advises international development banks on first-of-a-kind public private partnership road concession in Kazakhstan

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Bayliss Lorraine
Lorraine Bayliss



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07 August 2020

Allen & Overy has advised international development banks on the USD585 million debt financing of a 66-km ring road around Almaty in Kazakhstan to be constructed by BAKAD Investment and Operation LLP.  

The project is being developed under a 20-year availability-based concession agreement signed on 8 February 2018, and is supported by equity funding provided by Turkish sponsors Alarko and Makyol alongside Korean sponsors SK Engineering & Construction and Korea Expressway Corporation. 

The limited recourse project financing involves two debt tranches provided by the European Bank for Reconstruction and Development and Eurasian Development Bank, alongside a bespoke instalment sale structure developed to meet Islamic Development Bank’s specific shariah requirements within local law and transaction constraints.  

The project is the first road concession to be awarded and the first public private partnership (PPP) project in Kazakhstan. It is also the country’s first large infrastructure project to be completed with private capital outside the commodities sector and is expected to be the precursor of several road concession projects in the foreseeable future.

Lorraine Bayliss, a partner in A&O's banking practice in London, commented: "We are proud to have advised the international development banks and to have been part of the successful closing of this highly complex financing during an unprecedented time for the global economy. This transaction will put Kazakhstan firmly on the map for future international investment, and enable increased regional and international trade both within Kazakhstan and between Europe and Asia." 

When complete, the road will comprise a 51.5 km long six-lane section and a 14.5 km long four-lane section. The project also includes construction of eight junctions, 21 bridges, 18 viaducts and one railway truss.

The Allen & Overy team was led by partners Lorraine Bayliss and Henry Sohn and included senior associates Christopher O’Hara and Seán McGrenaghan, and associates Joanna Mobed and Jecolia Tong, with wider team support from partner Hakkı Gedik, counsel Sajjad Khoshroo, senior associate Utku Ünver and associates Géza Orbán and Dimitri Kolias. The Kazakhstan legal counsel to the development banks was AEQUITAS Law Firm.