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 mln 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 $1,633.75, of which $1,088.75 mln is provided from the UTY own funds, the state budget and the Fund for Reconstruction and Development of Uzbekistan, $350 mln from China Exim Bank, and $195 mln 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 $1,438.75 mln)
• Rail Electrification, Signaling, Track Maintenance and Railway Video Surveillance System (estimated total cost $154 mln, 100% IBRD financing)
• Power Distribution Line (estimated total cost $35 mln, 100% IBRD financing)
• Technical assistance to UTY for Supporting Railway Construction (estimated cost $0.5 mln, 100% IBRD financing)
• Technical Assistance to UTY for Improving Railway Logistics (estimated cost $1.0 mln, 100% IBRD financing)
• Implementation Support (estimated cost $4.5 mln, 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 $1.6 bln.