How can Kazakhstan attract investments for sustainable growth

What were the highlights of Kazakhstan's economy in 2024, and what could support its sustainable growth in the future?

According to our estimates, GDP grew by 4.0%, largely due to expanded government spending and increased household borrowing. An important indicator is the gradual decline in inflation to 8.4% compared to 9.8% in December 2023, which, however, exceeds the target of 5%.

Experts, businesses, and our government counterparts widely agree that diversifying beyond extractive industries is vital for the country’s long-term economic stability. However, the significant state presence in key economic sectors—typical across Central Asia, including Kazakhstan—can limit competition and hinder private sector growth. Addressing these barriers can foster entrepreneurial activity and attract greater foreign direct investment.

You’ve highlighted the importance of attracting investments. How has Kazakhstan’s foreign direct investment (FDI) landscape evolved in terms of volume and structure over recent years?

Net FDI inflows have averaged around 3.5% of GDP over the past decade, with significant annual fluctuations. The bulk of investment goes into the extractive sector. In 2023, FDI reached $24 billion, but the pace slowed in 2024, with flows in the first nine months amounting to around $13 billion. The World Bank Group projects FDI to fall below 2% of GDP in 2024–26, reflecting the slowdown in 2024.

At the same time, I am pleased to note that Moody’s has assigned the country a Baa1 rating with a stable outlook, the highest level ever achieved by Kazakhstan. This rating underlines economy’s attractiveness for long-term investment.

Despite the dominance of the extractive sector in attracting investments, recent large-scale agreements in renewable energy and unfolding privatization in telecommunications and banking sectors offer opportunities to diversify the economy and drive sustainable growth.

What are the key opportunities for Kazakhstan to attract investments into its non-extractive sectors?

Among the various opportunities, in my opinion, infrastructure emerges as one of the most promising areas. For example, airport modernization and urban infrastructure projects, along with the development of the transport network under the Trans-Caspian International Transport Route—which includes automobile and railway corridors—present vast prospects for private investment. The BAKAD project and the new terminal at Almaty Airport are prime examples of this potential being realized.

In this context, public-private partnerships (PPPs) serve as an effective mechanism for attracting investors to infrastructure projects. Global experience demonstrates that, when organized properly, PPPs can facilitate better risk-allocation, introduce modern technologies, and optimize the use of public resources.

IFC is actively supporting the development of public-private partnerships (PPPs) in Kazakhstan. Notably, our role in shaping and facilitating the successful tender for the BAKAD project. To further facilitate such initiatives, IFC, with support from the Government of Japan, is conducting training for government and quasi-government sector employees under the international CP3P certification program. This program enables specialists to adopt global best practices in planning and implementing PPP projects.

What global trends are shaping Kazakhstan’s investment outlook?

Kazakhstan faces the task of adapting to the global “green transition,” and significant steps have already been taken in this direction. The country was the first in the region to declare its commitment to achieving carbon neutrality by 2060 and has joined the Global Methane Pledge (GMP), an initiative aimed at reducing methane emissions. One of Kazakhstan’s key achievements is a 70% reduction in flaring, the primary source of methane emissions, demonstrating notable progress on the environmental agenda.

The transition to a sustainable economy also requires integrating ESG principles into corporate governance, an area where Kazakhstan has already made notable advancements. The Agency for Regulation and Development of the Financial Market is the first regulator in Central Asia to introduce ESG Disclosure Guidelines and Environmental and Social Risk Management Guidelines. These initiatives have been supported by comprehensive training for market participants and a phased shift from voluntary to mandatory disclosures starting in 2025. Additionally, Kazakhstan’s stock exchanges, KASE and Astana International Exchange (AIX), are actively growing the green bond market. Together, these efforts are shaping a transparent corporate environment that aligns with global standards.

How else is IFC contributing to Kazakhstan’s transition toward a sustainable economy?

Over the years, IFC has invested and mobilized more than $2.5 billion in over 60 projects through financing and advisory support.

We consistently support small and medium-sized businesses through local financial institutions, with a special focus on women entrepreneurs and agribusinesses in rural areas of the country.

In the infrastructure sector, we take pride in IFC’s financing of $222 million of Almaty Airport project and in structuring and successfully tendering the BAKAD project—the first concession of this scale in Central Asia. These initiatives underscore our commitment to advancing key infrastructure in the region.

On the environmental front, we assist with analyses of methane emissions and prioritization strategies to help Kazakhstan meet its commitments under the Global Methane Pledge. Additionally, we supported the development of Central Asia’s first ESG Disclosure Guidelines and Environmental and Social Risk Management Guidelines, helping to enhance environmental sustainability and improve corporate governance practices in the region.

How does IFC ensure the sustainability of its projects in Kazakhstan to prevent negative environmental impacts?

Sustainability is at the heart of IFC’s approach to financing, including the projects we support in Kazakhstan. Through our Environmental and Social Sustainability Policy, we ensure that projects are structured to effectively manage environmental and social risks throughout their implementation. Our approach is guided by IFC’s Performance Standards, which have become a benchmark for many other development finance institutions. These standards also emphasize the importance of engaging with local communities and civil society at every stage of project development.

We take this approach by working closely with our clients, helping them meet these standards from the outset—starting with a rigorous assessment even before an investment decision is made. In some cases, we also provide advisory services to help companies implement best practices for minimizing negative impacts. This includes improving resource and energy efficiency, responsible water management, ensuring workplace health and safety, protecting the rights of local communities, and integrating biodiversity conservation measures.

Our goal is not just to finance projects but to create the conditions for their long-term and sustainable success. We will continue to leverage our resources and global expertise to support private sector growth in Kazakhstan, including initiatives in green energy and agribusiness. Ultimately, we strive to contribute to Kazakhstan’s long-term sustainable development goals, laying the foundation for stable economic growth and a better quality of life for its people.

Earlier, it was reported that Prime Minister Olzhas Bektenov has chaired a meeting of the Board of Directors of the Samruk Kazyna National Welfare Fund to focus on the attraction of private investment.