Report no. 106375



                                               Kazakhstan

                       Center West Regional Development Corridor Project

                                             Chair Summary*

                                               June 9, 2016
The Executive Directors approved a loan for the Republic of Kazakhstan in the amount of
US$977.86 million for the Center West Regional Development Corridor Project on the terms and
conditions set out in the President’s Memorandum. Mr. De Villeroche and Ms. Robinson wished
to be recorded as abstaining.

Directors acknowledged the achievements Kazakhstan has made to sustain growth and reduce
poverty during the past decade. They welcomed efforts in the areas of macroeconomic reform,
development of the fiscal framework, strengthening public financial management, allocation of
resources for social services, and critical investments in infrastructure. However, they noted that
challenges remain as the country faces an uncertain external environment, reduced commodity
revenue, and weaker growth among key trading partners. Directors recognized the importance of
the government’s Nurly Zhol program in mitigating potential shocks but noted that a growing
fiscal deficit exists, exacerbated by lower oil revenues. They stressed the importance of long-term
macroeconomic and external debt sustainability and reduction of the current account deficit.

Directors noted the project’s alignment with the Kazakhstan CPS for FY12-17 as well as the
country’s objective of improving infrastructure connectivity. They welcomed the project’s
complementarity with ongoing efforts to remove barriers to trade and transport and to improve
access to services, markets, and employment opportunities in low income and vulnerable
populations along the corridor. Directors stressed the potential of corridor development for
Kazakhstan, the strategic importance of improving connectivity with neighboring countries, and
the promotion of regional integration, global economic growth, and competitiveness. Directors
also appreciated the attention to environmental and social impacts in the project design. Directors
stressed the importance of increasing the leverage of World Bank resources for large infrastructure
projects, seeking greater financial partnership with other stakeholders such as development
institutions and the private sector.

While the project is transformational, Directors noted that it involves substantial risk. They
emphasized the importance of monitoring and risk mitigation during implementation, particularly
in the area of project financial management. Directors also underscored the importance of
mitigating the substantial risk related to institutional capacity for implementation, and
recommended extra attention to implementation support.




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*This summary is not an approved record.