NUR-SULTAN

The European Bank for Reconstruction and Development (EBRD) has invested $630 million in 18 projects in Kazakhstan in 2021 in a move to support sustainable development and economic growth in the Central Asian country.

Forty percent of projects were aimed at promoting the green economy, the EBRD said.

“The EBRD will also support Kazakhstan in implementing its long-term cooperation strategy to achieve carbon neutrality by 2060,” the bank said in a report.

The list of the major projects included the infrastructure upgrades at the Almaty International Airport and investments in the Mangistau region. In September 2021, the EBRD has allocated a 4.9 billion tenge ($11.5 million) loan to improve the financial stability of the Mangistau regional electric grid company (MEDNC), a major distributor of electricity in western Kazakhstan.

The loan was allocated by MEDNC, which is the operator of 500 supply transformer substations    and a network of power transmission lines with a length of more than 5,000 km, to restructure the  balance sheet and increase resistance to exchange rate risks, as well as to minimize the impact of  the negative macroeconomic situation caused by the COVID-19 pandemic.

The financing provided ensures that MEDNC can continue to implement its strategic development goals, including the integration of renewable energy sources into the power system of Kazakhstan. The loan supports the company’s current investment programme until 2025.

The EBRD has also focused on strengthening the banking sector and supporting local small and medium-sized enterprises (SMEs). Last year, the EBRD supported the SMEs in Kazakhstan through 234 advisory projects with local and international experts.

In November, the EBRD issued the first-ever local-currency bond linked to the new tenge overnight index average rate or TONIA. Some 12,500 million tenge of the three-year bonds were auctioned at full issue price on the Kazakhstan Stock Exchange (KASE).

“TONIA is a robust benchmark, anchored in the liquid overnight tenge repurchase agreement (repo) market. In line with market practices for indexing transactions to similar overnight risk-free rates in other currencies, TONIA will be compounded daily and the compounded rate is then calculated at the end of each interest period. Using the TCI simplifies calculations and reduces the risk of operational error,” the bank said.

To date, the EBRD has invested more than $10.3 billion in the economy of Kazakhstan in the      framework of 295 projects.