ASTANA, KAZAKHSTAN - ADB has signed a memorandum of understanding to undADB ertake its first public-private investment in Kazakhstan.
ADB President Haruhiko Kuroda said in a meeting with Kazakh President Nursultan Nazarbayev last Friday that the project with Almaty Power Consolidated highlights ADB's intention to form a long-term partnership with Kazakhstan based on investments that do not rely on sovereign guarantees.
Almaty Power is a major power and gas utility in Kazakhstan. The proposed ADB finance would help upgrade its power transmission and distribution lines.
Mr. Kuroda also announced while in Astana that ADB has initiated discussions with Kazakh authorities over a possible Tenge bond issue, the first by an international financial institution, which would help deepen Kazakhstan's capital markets.
Mr. Kuroda said: "With these activities, ADB's partnership with Kazakhstan has entered a new chapter. We will continue to actively explore further opportunities to expand our private-sector operations in Kazakhstan."
ADB has already worked closely with the Government to develop concession laws which may foster successful public-private partnerships (PPPs). ADB has implemented a PPP project in the power sector in India and considers the experience may be useful for Kazakhstan.
ADB also supports private-sector development through technical assistance for improving the business environment. A series of technical assistance projects totaling $1.8 million has been extended to the financial sector for that purpose.
ADB's public-sector operations will continue working with Kazakhstan for rural support, mainly through water supply and sanitation, and water-resources management.
Mr. Kuroda said: "While private-sector operations are strengthening ADB's engagement with Kazakhstan, our public-sector activities will deepen our collaboration with Kazakhstan in reducing the urban-rural gap."
Mr. Kuroda visited Kazakhstan following his attendance at the fourth Ministerial Conference for Central Asia Regional Economic Cooperation, in Bishkek. He praised Kazakhstan's role in regional coopeation and said ADB would sharpen efforts under CAREC to bring practical benefits to member countries.
"ADB appreciates Kazakhstan's role in regional cooperation initiatives," Mr. Kuroda said. "Central Asian countries need to work together for lasting prosperity."
As of year-end 2004, ADB had approved 12 loans in Kazakhstan totaling $502 million. Since joining ADB in 1994, ADB has also approved 58 technical assistance projects totaling $28.7 million.