BAKU, Azerbaijan, January 3
By Nargiz Sadikhova - Trend:
The European Bank for Reconstruction and Development (EBRD) have continued to cooperate with Kazakhstan over 2021 through a number of new projects and bilateral documents signed.
Thus, on January 12, it was announced that EBRD will support small and medium-sized enterprises (SMEs) in Kazakhstan by providing fresh funds jointly with its financial intermediaries. The Bank agreed to share up to 50 percent of risk on a 450 million tenge (around $1.1 million) loan provided by its long-term partner - Bank CenterCredit to the local packaging producer - INTELLPACK.
This is the first transaction of this type signed by the EBRD in Kazakhstan under the Risk Sharing Facility between the EBRD and Bank CenterCredit. The loan was to be used to help INTELLPACK complete the renovation of a warehouse facility, enhance operations in its principal business location in Almaty and to finance working capital needs.
On March 30, it was announced that EBRD and the government of Kazakhstan have agreed an Enhanced Partnership Framework Arrangement (EPFA) to boost the resilience, modernisation, digitalisation and regional integration of the national economy, with a view to speeding its recovery following the Covid-19 pandemic.
The new EPFA will foster greater cooperation on the promotion of sustainable development and growth in Kazakhstan and foresees joint activities.
Furthermore, EBRD and Kazakhstan have also agreed to develop a long-term cooperation strategy to achieve carbon neutrality of the country’s power sector by 2060.
As part of the cooperation strategy, the EBRD and Kazakhstan will cooperate, among other things, on the development of renewable energy and the carbon market, the enhancement of the electrical grid and the decommissioning of old thermal capacity. The Bank is committed to financing renewable energy projects implemented through an auction mechanism in order to promote competitive pricing and to stimulate investment in renewable energy.
In June it was also announced that EBRD will support an upgrade of the wastewater treatment facilities at the Atyrau oil refinery, through a $80 million-equivalent loan.
The EBRD loan, to be disbursed in Kazakh tenge, will help the Atyrau oil refinery, a wholly owned subsidiary of KazMunayGas, Kazakhstan’s leading vertically integrated oil and gas company, modernize industrial wastewater treatment facilities, construct a secure 3.5 kilometre sewage pipeline and overhaul 860 hectares of evaporation ponds, which are located close to the city boundary.
Later on June 16, it was announced that EBRD will promote green financing, lending to micro, small and medium-sized enterprises (SME) and women entrepreneurs in Kazakhstan by providing a loan package of $60 million in tenge equivalent to the country’s leading lender Bank CenterCredit (BCC).
The Kazakh lender is to receive a loan of up to $20 million in under the EBRD’s Green Economy Financing Facility (GEFF) designed to support domestic SMEs ready to invest in climate mitigation and adaptation technologies and services. The financing will be supported by grant funding from the Global Environment Facility (GEF) and Austria. GEFF is part of the EBRD’s commitment to scale up its climate and environmental finance under the Green Economy Transition (GET) approach with the aim to become a majority green bank by 2025.
In August it was announced that EBRD will offer a multicurrency loan equivalent to $50 million to help Air Astana develop its infrastructure and operations of its maintenance and training center in Nur-Sultan with a full flight simulator for pilots.
On September 8, EBRD announced it will pledge new funds to improve the financial sustainability of Mangistau Regional Distribution Company (MREK), a major electricity distributor in western Kazakhstan.
A senior loan of up to 4.9 billion tenge (equivalent to 9.5 million euro) was to help MREK, which operates 500 supply transformer substations and a network of more than 5,000 km of electricity lines, to restructure its balance sheet and increase its resilience to future foreign-exchange risks, as well as to the macroeconomic uncertainty caused by the COVID-19 pandemic.
On September 23, EBRD announced a sovereign loan to the improvement of regional connectivity in Central Asia and beyond by supporting a major road project in central Kazakhstan.
A sovereign loan of up to $240 million to the state-owned road company - KazAvtoZhol financed the reconstruction of a 204 km road section between the cities of Kyzylorda and Zhezkazgan, as well as the construction of a 14.8 km bypass road around Kyzylorda, a city in south-central Kazakhstan.
Furthermore, in November EBRD announced it is is supporting the development of the local capital market in Kazakhstan by issuing the first ever local-currency bond linked to the new tenge overnight index average rate, or TONIA.
A total of 12.5 billion tenge ($28.9 million) worth of the three-year bonds were auctioned at full issue price on the Kazakhstan Stock Exchange (KASE). Tengri Partners, a Central Asia-based merchant banking group, acted as arranger.
The three-year bonds pay a flat (zero-spread) coupon of the TONIA risk-free rate, calculated using the TONIA Compounded Index (TCI).
Lastly, on December 13, it was announced that EBRD is promoting green financing in Kazakhstan by offering new funds to micro, small and medium-sized enterprises (MSMEs) that are planning to invest in energy-saving solutions. Shinhan Bank Kazakhstan (SBK) became the latest financial institution in the country to join the EBRD’s Green Economy Financing Facility (GEFF).
The EBRD is a leading institutional investor in Kazakhstan. To date, the Bank has invested more than US$ 10.2 billion in Kazakhstan’s economy through 293 projects.
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