The Asian Development Bank and the
Kazakhstan government will sign off on a $2.75bn partnership and co-financing
arrangement today, Emerging Markets can reveal.
The new deal would enlarge the scope of
co-operation between the regional bank and the Central Asian government. We
expect very shortly to sign a very important partnership framework and
co-financing arrangement with the government. This would further the
collaboration that we have, said Klaus Gerhaeusser, director general of
Central and West Asia at the ADB.
The co-financing agreement will be in areas
of mutual interest, Gerhaeusser added, but in line with the ADB country
strategy. The programme is set to focus on creating opportunities for small and
medium enterprises (SMEs) as well as boosting Kazakhstans banking sector.
The government has a very strong focus on
SMEs and private sector development, said Gerhaeusser. Industrial development
is part of the [countrys] diversification. The financial sector still has some
issues here in Kazakhstan, so [we are] tackling the banking system.
The general director did not confirm the
amount but said that it would be quite sizeable and would be in addition to
the country agreements already in place, which are around $1.6bn.
The new co-operation and co-financing
arrangement will respond to the pressing items on the reform agenda. President
[Nursultan] Nazarbayev has a very strong focus on getting employment generation
in SME activities, said Gerhaeusser.
The co-operation with Kazakhstan, on the
back of a 2012 agreement, revolves primarily around energy, for example on
district heating projects. Other areas of involvement include transport
infrastructure, such as the creation of transport corridors.
According to the Kazakh foreign
minister, Erlan Idrisov, the broader co-operation with the ADB will
help the country achieve its goal of joining the worlds top 30 economies
He said recently that water, energy,
poverty reduction and business development were all high on the countrys
priority list and that Kazakhstan was looking to grow its support for the
The existing partnership between Kazakhstan
and the ADB dates back to the period following the countrys independence in
1991. The collaboration has so far touched on a number of areas including
agriculture, finance and education. The agreement has recently operated within
the framework of the Central Asia Regional Economic Cooperation Programme.
The signing comes after last weeks
announcement by the World Bank of a $100m loan agreement to improve the
countrys water irrigation systems.
That programme is meant to further the
Kazakh governments green economy agenda and is set to last until 2021. Almaty,
Kyzylorda, South Kazakhstan and Zhambyl areas will be the primary focus of the
Gerhaeusser confirmed that the ADB was not
directly involved in the irrigation project.
Last December the ADB announced the second
tranche of up to $500m to support SME lending in the country. According to
ADB data, overall lending to Kazakhstan so far has been $3.2bn as of December