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ADB starts providing Kazakhstan's state-owned enterprises with sovereign-guaranteed loans

Business Materials 15 April 2020 16:29 (UTC +04:00)
ADB starts providing Kazakhstan's state-owned enterprises with sovereign-guaranteed loans

BAKU, Azerbaijan, Apr.15

By Nargiz Sadikhova - Trend:

Asian Development Bank’s (ADB) operations in Kazakhstan now also include provisions for sovereign-guaranteed loans with state-owned enterprises (SOE) as borrowers, a representative of ADB told Trend.

The official said that the ADB and Kazakhstan’s government agreed to amend the Partnership Framework Agreement (PFA), which was signed in 2014, to also include provisions for these types of loans.

Talking the benefits of these amendments, the official said that the ratification of the amended PFA will enforce provisions of loan agreements with SOEs and ensure borrowers’ compliance with ADB’s policies and rules and effective project implementation, especially in the case of discrepancy with national legislation.

Unlike sovereign loans, the official said, sovereign-guaranteed loan agreements are not ratified by the country’s parliament, thus leaving borrowers exposed to compliance risks with respect to ADB’s rules and regulations.

Sovereign guarantee loan modality, the official said, extends ADB’s exposure to different sectors, where the bank’s operations will add value by creating jobs, fostering innovation, building capacities, providing broad knowledge-based support, and introducing international best practices.

“The focus of ADB operations is placed on enhancing Kazakhstan’s macroeconomic resilience; modernizing the country’s infrastructure and utilities; promoting agriculture sector development; improving access to finance for small and medium-sized enterprises; and enhancing investment in infrastructure and social sectors,” the official reminded.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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