New EBRD strategy for Kazakhstan

By Svitlana  Pyrkalo

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The European Bank for Reconstruction and Development (EBRD) has adopted a new 3-year strategy for its activities in Kazakhstan.

Kazakhstan is one of the largest countries of operations of the EBRD, with about US$ 6.5 billion invested over the last 20 years. In terms of reforms, Kazakhstan is the most advanced country in Central Asia, and is demonstrating strong economic growth supported by high oil prices. However many challenges remain, especially in the banking sector in the aftermath of the crisis, and corporate governance and business climate need to be further improved.

The strategy, which guides the Bank’s work in the country, defines the following priorities:

Diversification and support for the non-resource sector. The EBRD is already the largest investor in the non-oil and gas sector of the economy. The Bank will continue to support the development of other sectors by financing projects that enhance productivity in the corporate sector, improve the business environment, promote modernisation of the agribusiness sector along the entire value chain and facilitate growth of the SME sector. The Bank will also work to further develop the banking and non-banking financial sectors.

Balancing the role of the state and the market. The Bank will seek to assist the Kazakh authorities in balancing the roles of the state and the market by supporting growth of private sector enterprises. The Bank will also support policies aimed at commercialising public enterprises and making them more efficient, as well as upgrading infrastructure ensuring appropriate sharing of risks between the private and public sectors.

Promoting low-carbon growth and energy efficiency. The Government’s recently announced Green Economy Strategy is a top national priority and the Bank will assist in implementing key aspects of the strategy through projects in energy, renewables, agriculture, water, waste management, transport, and other sectors.

The EBRD is already working to address these issues. Thanks to the Bank’s support, nearly 60 per cent of Almaty’s urban transport is now environmentally friendly. The Bank is working with clients in agribusiness sector such as RG Brands; supporting private sector’s involvement in infrastructure, such as Olzha, the rail car provider; helping to contribute to the energy efficiency of the power sector by financing clients like CAEPCO; and working on renewable energy both in terms of policy dialogue and project financing. The EBRD’s Small Business Support programme has provided consulting support over a thousand private enterprises, and with donor funds from the Kazakh government is now present in 7 regions of Kazakhstan. The Bank is working on expanding its programme of SME financing through local partner banks.

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