BAKU, Azerbaijan, Jan.13
By Nargiz Sadikhova - Trend:
Overall 2019 was a busy and successful year for Asian Development Bank (ADB) in Kazakhstan and ADB hopes to further build on the projects and initiatives that were launched, a representative of ADB told Trend.
According to the representative, 2019 marked the 25th anniversary of Kazakhstan-ADB partnership. This year ADB approved three sovereign local currency loans for a total of $517 million-equivalent in transport, finance and agriculture and three non-sovereign loans in support of solar power development and agribusiness for a total amount of $61.5 million.
Thus, ADB has a current active sovereign loan portfolio worth $755 million for three projects.
"They include strengthening access to finance for micro, small, and medium-sized enterprises (MSMEs), especially those located in rural areas and led by women and modernizing transport infrastructure along the Aktobe-Makat and Zhetybai-Zhanaozen roads in West Kazakhstan. At the request of the Kostanay region authorities, ADB is also providing technical assistance and analytical support to the local government to foster SME creation and entrepreneurship," the official said.
In turn, bank’s non-sovereign loan portfolio in Kazakhstan includes three projects for about $162 million. Ongoing private sector projects include a loan to Samruk-Energy, Kazakhstan’s largest power generation company, to support its overall business restructuring and transformation plan, and two loans to support the construction and operation of solar power plants of a 50MW and 100 MW installed capacity in the Southern Kazakhstan.
"In 2019, we also started activities under the new facility, ADB Ventures, to invest in business startups and facilitate the transfer of critical technology and innovative business models. Thirteen companies have already been selected for the first acceleration program in the country, leading the most successful companies to receive investment and advisory support," the official said.
To combat climate change and promote the use of clean and renewable resources, ADB is providing technical assistance to prepare a low-carbon growth strategy and an integrated water masterplan for Kazakh capital, Nur-Sultan.
"In November, we launched a pilot clean technology project in Nur-Sultan that installs engine block heaters in cars to reduce the environmental impacts of starting a vehicle’s cold engine during the winter months," the representative said.
The bank is also working closely with the United Nations to provide support to Kazakhstan in achieving the Sustainable Development Goals.
"In November, we supported the First Regional Sustainable Development Goals Summit: Mobilizing Finance for SDGs organized by the government of Kazakhstan in Almaty. This year’s discussions focused on energy, water and climate resilience," the report said.
Talking about the impact of these projects, the official noted that the purpose of banl’s MSMEs support project is to help Kazakhstan in economic diversification by promoting private sector development and improving access to finance.
"It also helps reduce income inequalities and foster gender mainstreaming. The project has managed to sustain the flow of credit to the real sector, against the backdrop of an economic downturn following the decline in hydrocarbon prices that started in 2014. Funds were provided to over 16,000 local businesses, with 50 percent of loans directed to promote women-owned businesses, whereas over 70 percent of ADB-financed loans were provided to MSMEs located in regions outside the cities of Nur-Sultan and Almaty," the official said.
In turn, Aktobe-Makat and Zhetybai-Zhanaozen road projects, once completed, are expected to boost regional connectivity, promote inclusive economic growth, and increase the country’s trade links with markets in East Asia, Europe, and the Caspian Sea subregion. The solar power plants in South Kazakhstan that ADB is financing will support the development of an early-stage solar power sector in the country and help replace imports of electricity in power-deficient southern Kazakhstan with indigenous renewable sources.
In 2020, ADB is planning to work on the implementation of ongoing and newly approved sovereign and non-sovereign projects named above and continue providing advisory support through technical assistance.
"As for the sovereign financing planned for 2020, new approvals are expected to be in the order of $640 million, covering sectors such as agriculture, transport, water supply and sanitation, as well as finance. We are guided by three strategic pillars of our Country Partnership Strategy for Kazakhstan: the first pillar is to help the country diversify its economy; second is to promote inclusive development; and the third one is to strengthen a green and sustainable growth," the official concluded.
Follow the author on twitter: @nargiz_sadikh