The EBRD is supporting the real economy of Turkmenistan with a US$ 3 million loan to a private construction services company, Shazada. The company will use the loan to finance its capital investment programme through the purchase of new heavy machinery and trucks.
Shazada is engaged in substantial infrastructure works around the South Yolotan-Osman natural gas deposit fields. The company is planning to expand its successful subcontracting business to take advantage of the current construction boom connected to infrastructure investments. This rapidly growing company employs about 150 people.
"The loan to Shazada will allow the company to purchase equipment it currently rents, expand its fleet and improve profitability. Support for exactly this kind of business – a private, medium-sized, fast-growing local enterprise – is the EBRD's priority in Turkmenistan. It is in the best interest of the country to continue improving the business environment for entrepreneurs and diversify the economy," said Frederic Lucenet, EBRD director for manufacturing and services.
“The EBRD loan will enable Shazada to purchase new equipment which will increase the company’s capacity, improve the quality of provided services and become more competitive both with local and foreign companies in the growing large-scale construction market of Turkmenistan,” said Mikhail Surovikin, Director of Shazada.
Turkmenistan is one of the so-called early transition countries of the EBRD, and is still facing many challenges on its way towards becoming an open market-oriented economy. Turkmenistan still has a state-dominated economy, but the government has adopted a strategy of support for SMEs (small and medium-sized enterprises) and is planning to develop a privatisation strategy. The government has also declared its intention to gradually increase the share of the private sector in the non-oil and gas sector of the economy to 70 per cent by 2020.
The EBRD strategy in Turkmenistan is to support small and medium-sized enterprises which have difficult access to finance, and the private sector.