Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders.

In addition to the Export-Import Bank of the United States (EXIM), and Overseas Private Investment Corporation (OPIC), the U.S. Trade and Development Agency (USTDA) provides funds to carry out feasibility studies related to major projects in emerging markets.  

USTDA has extensive experience in transitional economies, and the agency moved quickly to establish programs when Kazakhstan became independent in 1991.  As of year-end 2017, USTDA provided approximately USD13 million in funds to benefit Kazakhstan, and has financed feasibility studies and technical assistance, as well as sponsoring missions to the United States, regarding major projects in key sectors such as oil and gas, railway transportation, information technology, health care, and electric power.  Since 2017, USTDA has steadily reduced its portfolio in Kazakhstan due to poor performance and lack of follow-on export opportunities for U.S. firms.
 

Multilateral Development banks

World Bank
Kazakhstan has been a member of the World Bank since 1992.  The World Bank has been a major source of external assistance to Kazakhstan, providing 46 loans with a total value over USD8 billion.  World Bank support now focuses on investment projects that include agriculture development, road construction, energy efficiency, innovative development, health, and capacity building.

The World Bank is developing a new Kazakhstan Country Partnership Framework (CPF) for2020-2025.  The document is expected to be approved in the 2nd half of 2019 and will be aimed at helping the government of Kazakhstan enable diversified, accelerated private sector-led growth through creating the preconditions for an efficient, climate smart, and entrepreneurial society.

The current portfolio consists of 13 operations, including 10 IBRD loans and three grants funded from the Global Environment Facility with a total net commitment of USD3.7 billion85% of IBRD commitments are concentrated in the two big South-West Roads Project and East-West Road Projects, while the rest of the portfolio is diverse with two-thirds of the projects focused on institution building in the areas of education, health, innovations, and revenue administration.  There are a number of projects at various stages of implementation, including support to social modernization, justice sector institutional strengthening, SME competitiveness, fostering productive innovation, improving energy efficiency and modernization of irrigation and drainage systems.       

Since 2002, the World Bank and the government of Kazakhstan have jointly financed and implemented the multi-year Joint Economic Research Program (JERP).  The program has provided strategic research on key areas of policy development. JERP themes for FYs 2018-19 included Subnational Doing Business, Measuring the Effectiveness of Tax Incentives, Strengthening Statistical Capacity (National Accounts and SDGs), Managing Public Debt, Insolvency Legislation and Personal Insolvency, Public Expenditure Review (Agricultural Sector), Social Safety Net System, support to Kazakhstan’s 2025 Strategic Development Plan implementation and support to create a unified state information-analytical environment strategy in Kazakhstan. JERP priority themes for the next Fiscal Year will be determined between June-July 2019 in consultation between the Kazakh government and the World Bank.

Kazakhstan became a member of the International Finance Corporation (IFC) in 1993.  Since the beginning of investment operations in 1997, Kazakhstan has received commitments of USD1.4 billion of IFC funds, including mobilization from partners of nearly USD300 million to support 57 private sector projects in the financial, oil and gas, agribusiness, and manufacturing sectors.

As of June 2018, the IFC’s total committed portfolio in Kazakhstan amounted to USD142.3 million in 7 projects in financial markets (31% of total IFC investments in the country), food & beverages (46%), transportation and warehousing (15%), and manufacturing (8%). 

IFC promotes the development of the private sector though investments and advisory services to support the diversification and competitiveness of the economy.  IFC’s strategy in Kazakhstan is focused on strengthening the financial sector, improving access to infrastructure, and promoting the development of small and medium enterprises, particularly in the agribusiness, manufacturing, and service sectors.  Specific focus areas include the logistics and transportation sectors to improve connectivity and trade.   In addition to investments, IFC, jointly with the Ministry of Finance of Austria, is advising local companies in food safety and applying environmental and social standards. 
 

European Bank for Reconstruction and Development

The European Bank for Reconstruction and Development (EBRD), whose largest shareholder is the U.S. government, offers a range of financial products to U.S. investors in Kazakhstan.  The largest investor outside Kazakhstan’s oil and gas sector, the EBRD seeks to promote economic diversification.  The Bank provides loans for large projects and technical assistance in a number of economic sectors, concentrating on enterprise, financial system and infrastructure development.  The EBRD uses its AAA credit rating to provide debt, equity, quasi-equity, syndications, and trade finance in local and foreign currency at competitive commercial rates, and with longer tenors than are usually supplied by commercial lenders.  The EBRD prioritizes lending to private sector-led investment, but also provides sovereign lending, particularly for water, transport and energy needs at the municipal level.  For sovereign loans, the EBRD requires open, competitive tenders that offer an opportunity to supply U.S. goods and services.

As of January 2019, the EBRD had disbursed more than €5.3 billion in Kazakhstan, with 50% of financing going to the private sector.  Currently, EBRD’s portfolio totals €2.4 billion with 124 active operations. Of the EBRD’s loan portfolio, 51% is invested in the energy sector, 35% is directed to infrastructure projects, 9% in industry, commerce, and agriculture, and 5% toward financial institutions.  In the last two years, the EBRD has invested in infrastructure, transport, power, utilities and the banking sector.  
 

Asian Development Bank

Headquartered in Manila, the Asian Development Bank (ADB) is an international financial development institution owned by its 68-member countries, 49 of which are from the region and 19 from other parts of the world (including the United States).  ADB assists developing member countries with policy dialogue, advisory services, loans, equity investments, guarantees, grants, and technical assistance.

Since joining the ADB in 1994, Kazakhstan has received USD5.0 billion in sovereign and non-sovereign loans, grants, and technical assistance.  In the early years of the country’s transition from a centrally planned to a market-driven economy, ADB focused its support on agriculture, education, finance, and delivery of social services, and more recently, on finance and transport sectors, as well as creating knowledge products. Under its current Country Partnership Strategy (CPS), ADB’s USD1.6 billion public sector investment program bolsters the financial sector, small and medium-sized enterprises, improvements in infrastructure, private sector development, and regional cooperation and integration.  ADB augments this program with investments through its private sector operations with instruments including equity, debt, and guarantees. 

The ADB also finances upgrades to Kazakhstan’s transport network along the Central Asia Regional Economic Cooperation (CAREC) transport corridors, aimed at strengthening regional trade and economic integration.  In 2016, multi-tranche financing for USD1.5 billion facilitated the completion of more than 600 kilometers of roadway in the Zhambyl region, and the road between Shymkent and Tashkent on the Western Europe–Western China International Transit Corridor (also known as the CAREC corridor) as well as 400 kilometers of the road from Aktau to Beineu in the Mangystau region. In the same year, ADB approved a loan for reconstruction of Aktobe-Makat road to help Kazakhstan increase its trade links with markets in East Asia, Europe, and the Caspian Sea subregion. By 31 December 2018, total ADB exposure to Kazakhstan under CAREC Program was USD1.8 billion.

ADB has been supporting the growth of Kazakhstan’s small and medium-sized enterprises by providing financial institutions with liquidity in local currency. Improved access to finance is helping drive investment, increase employment, and generate income for SMEs, particularly those located in regions outside Nur-Sultan and Almaty and operated by women entrepreneurs.

Private sector operations of ADB in Kazakhstan began in 2006, with cumulative commitments amounting to USD360.2 million as of first quarter 2019. In line with Country Operations Business Plan (2019–2021), ADB will explore direct investments in private sector undertakings in renewable energy, transport and logistics, affordable housing and agribusiness.

ADB is an active buyer of goods and services in Kazakhstan.  Since 1994, ADB awarded205 contracts worth USD2.14 billion to contractors and suppliers.  For the same period, ADB also awarded 309 contracts worth USD15.08 million to consultants. 

ADB likewise co-finances projects in partnership with government agencies, multilateral financing institutions, and commercial organizations.  From 2000 to the end of 2018, cumulative direct value-added co-financing commitments for Kazakhstan amounted to USD3.83 billion for five investment projects and USD4.15 million for six technical assistance projects.
 

U.S. Commercial Service Liaison Offices at the Multilateral Development Banks (European Bank for Reconstruction and Development, Asian Development Bank, World Bank)

The Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the European Bank for Reconstruction and Development, the Asian Development Bank and the World Bank. These institutions lend billions of dollars in developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help American businesses learn how to get involved in bank-funded projects, and advocate on behalf of American bidders. Learn more by contacting the Commercial Liaison Offices to the European Bank for Reconstruction and Development.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.