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EBRD and Kazyna set up Kazakhstan Growth Fund
Equity investments to strengthen private companies
The EBRD Board of Directors has approved the establishment of the new Kazakhstan Growth Fund to strengthen private companies in non-extractive industries in the country by providing equity or equity related investments, raising standards of corporate governance and transparency and contributing to the restructuring of medium-sized companies.
The Fund will be set up jointly by the Kazyna Sustainable Development Fund, a state-owned joint stock company, and the EBRD and will have a capital of $125 million. The Fund will be an active investor taking stakes in private companies with a focus on construction materials, food production, processing and packaging, primary extraction equipment and services, metallurgy, wood processing and textiles production and processing.
The Fund will operate on market principles and adopt the highest standards of corporate governance. At a later stage it is envisaged to transfer ownership of the management company to the Fund’s management team which would then raise a follow-on fund with a majority of private capital.
The Kazakhstan Growth Fund will provide companies located in Kazakhstan or in neighbouring countries but with strong links to Kazakhstan with much-needed equity to which local companies still only have limited access. At the Fund the EBRD’s investment will promote institution building, a market-oriented approach and international best practice. The Bank’s investment will furthermore support the development of the private equity market in Kazakhstan.
EBRD Business Group Director Olivier Descamps commented on the establishment of the Kazakhstan Growth Fund: “This is an important milestone in leading a state-owned institution to the market and could not happen more timely than at a moment when the provision of equity is more relevant than ever in Kazakhstan.”
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