Kazakhstan expands ties-up with IFOs

In his opening remarks, the Kazakh Prime Minister stressed the strategic role international financial institutions play in implementing structural reforms and introducing best practices aimed at ensuring high-quality economic growth.

Bektenov said restructuring the work of the Coordinating Council and the mechanisms of interaction with international financial organizations is underway on the direct instruction from the President, highlighting the degree of importance the state places on working with reputable financial institutions.

We have already completed many successful joint projects, and I am assured we are capable of achieving even more. Our country holds considerable potential, and with your support, I believe we can fully unlock it, he said.

The meeting focused on increasing the participation of international financial organizations in projects that provide a multiplier effect on Kazakhstan’s economy.

The press service of the Kazakh government said in a report that specific initiatives in the area of public-private partnership development were reviewed, as well as issues of independent fundraising by the regions of Kazakhstan and a number of joint projects with IFIs aimed at further expanding transport potential and scaling up financial support programs for micro-, small-, and medium-sized enterprises.

As for the application of the PPP mechanism, attention was given to the new edition of the public-private partnership law, aimed at introducing the mechanism of program PPP to improve project quality, shorten planning timelines, and reduce budget expenditures through the optimization of several procedures.

To date, seven large-scale projects are being implemented jointly with IFIs in the sectors of energy, healthcare, education, water supply, and transport. In total, more than 1,100 PPP contracts (including completed ones) have been concluded, amounting to 2.7 trillion tenge, reads the report.

Zafar Khashimov, an IFC representative in Kazakhstan, presented proposals on further improvement of the regulatory framework, project tendering procedures, and active promotion of Kazakhstan’s investment opportunities on international platforms.

The ADB is a partner of Kazakhstan and is ready to support the Government in its initiatives, especially improving the conditions for public-private partnership. We consider identifying a pipeline of PPP projects an important step. This helps attract reliable investors and contributes to strengthening competition in the Kazakhstani market. This approach corresponds to earlier recommendations by the ADB. We highly appreciate the proactive role of the PPP Center in promoting this important stage, said ADB Country Director Utsav Kumar.

Deputy Chief of the EBRD in Kazakhstan, Askar Namazbayev, raised issues regarding foreign-exchange risk budgeting, reduction of administrative barriers, and the use of PPP mechanisms for the implementation of infrastructure projects, etc.

Deputy Prime Minister – Minister of National Economy Serik Zhumangarin and Deputy Head of the Presidential Administration Yerbolat Dosaev commented on the issues raised.

The Kazakh Prime Minister highlighted the importance of partnership with international financial institutions in the housing and utilities sector, including within the national project Modernization of the Energy and Utilities Sector, as well as in the development of digital technologies and the introduction of artificial intelligence.

During the discussion of independent fundraising mechanisms for investment projects in cities of republican significance, the meeting’s participants noted the Government’s continuous efforts to strengthen the budgetary autonomy of regions. A number of tax revenues have been transferred from the republican to the local level. The new Budget Code contains provisions expanding the financial powers of local budgets and increasing their stability. Currently, the city of Almaty has the ability to directly borrow funds from international financial institutions. The confirmation of the city’s credit rating at the ‘BBB+’ level by the international rating agency Fitch also ensures favorable conditions for attracting external financing. The IFC and EBRD officials expressed their readiness to support the implementation of environmental projects in Almaty.

Attention was given to the capital investment program of Kazakhstan Railways, involving borrowed financing under World Bank investment guarantees. The program provides for reconstruction, restoration, and repair of the railway network, as well as the acquisition of electric rolling stock, including locomotives and passenger coaches.

Andrei Mikhnev, World Bank country manager for Kazakhstan, emphasized the importance of strengthening the country's transit potential and expressed readiness to provide comprehensive support for this program.

Issues of cooperation between the national investment holding Baiterek and the ADB within the Orleu program aimed at stimulating entrepreneurial activity were discussed. Under this program, additional funds are expected to be allocated next year to finance SMEs at preferential rates. This will ensure the creation of new jobs in the regions.

The Government supports major projects aimed at economic growth and the development of the country's export potential, around which a belt of small and medium-sized enterprises is formed. At the same time, SMEs are the main source of employment for the population. In this regard, as noted by the Prime Minister, broad coverage of SME support measures remains a priority for the state. Therefore, it is important to keep this area of work in focus.

The President and the Government pay great attention to effective interaction with international financial institutions. This allows the state to implement large-scale projects while using budgetary resources rationally. You have a global presence and can see how various issues are addressed in different countries. Therefore, if there are recommendations regarding improving the business climate, attracting investment, and other economic matters, we will gladly accept them. Overall, the Government is committed to constructive cooperation with all financial institutions, stated Bektenov.

Following the meeting, the Prime Minister instructed the heads of government agencies to strengthen oversight over the high-quality implementation and targeted use of loans from financial institutions. The Ministry of National Economy and other bodies were instructed to work through all proposals and recommendations.

Earlier, Qazinform News Agency reported Prime Minister of Kazakhstan Olzhas Bektenov held a meeting of the Digital Headquarters.