The World Bank (WB) will provide the State Stock Railway Company Uzbekistan Railways with a loan of $200 million for construction of a railway line through Kamchik pass in east of the country.

The Bank together with the Uzbek government started in March preparation of a project documentation for the loan, to be completed in August this year. According to preliminary information, the loan can be approved by the WB Board of Directors in January 2015. The loan will be used for purchase of necessary equipment and machinery.

Uzbekistan Railways started in July 2013 construction of an electrified railway line Angren-Pap with length of 129 kilometers. The road passes through Kamchik pass and links the Fergana Valley with the rest of Uzbekistan. Construction of a tunnel for the new line worth USD455 million was carried out by the China Railway Tunnel Group.

The project worth USD 1.77 billion will be financed by loans from international financial institutions and equity funds of the Uzbek side. Construction period - five years. AKIpress News Agency

According to the World Bank, railway is the dominant mode for freight transport and has a large share of the long-distance passenger transport market in Uzbekistan. However, the internal connectivity of Uzbekistan has been affected by the dissolution of the Soviet Union. The Soviet rail network was driven by a Moscow-centered economy without regard to internal boundaries. Since the 1990s, national boundaries have created new barriers to trade flows and market access. Newly erected border crossings worsened internal connectivity as many of its rail and road routes cross into neighboring countries before crossing back into Uzbekistan. Similarly, neighboring countries depend on Uzbekistan transport network to transport its good and passengers (e.g. southern Uzbekistan provides transit for Tajikistan and Kyrgyzstan and northern Uzbekistan provides transit for Kazakhstan). Uzbekistan part of the Ferghana Valley is most affected by the lack of internal connectivity.