Kazakhstan and ADB

ADB's Work in Kazakhstan

Kazakhstan became a member of ADB in 1994, shortly after it achieved independence.

During the past 26 years, ADB has aided Kazakhstan with financing, technical assistance, and knowledge support as part of its sovereign operations. Priority areas of investment have been budget support, transport, the finance sector, agriculture, and renewable energy.

Bayterek Tower, Nur-Sultan, Kazakhstan

Current ADB operations in Kazakhstan are being implemented under the country partnership strategy, 2017–2021, which is structured around three pillars: economic diversification, inclusive development, and sustainable growth. ADB is also supporting Kazakhstan’s active participation in the Central Asia Regional Economic Cooperation (CAREC) Program.

Since 1994, ADB has committed $5,153.63 million in loans, and $48.81 million technical assistance projects, including ADB-administered cofinancing for Kazakhstan.

ADB has helped Kazakhstan integrate into global transport networks and improve its transit potential. With the bank’s support, Kazakhstan has completed more than 600 kilometers (km) of roadway along the transport corridor between Europe and the People’s Republic of China. ADB helped reconstruct 400 km of the Aktau–Beineu road in the Mangistau region and 299 km of road from Aktobe to Makat, while works on 70 km of the Zhetybay–Zhanaozen road were continuing in the early months of 2020. In 2019, ADB approved a loan for the reconstruction of 156 km of roadway between Aktobe and Kandyagash.

This road section between Aktau and Beineu passes through Karagiye Depression, which is 132 meters below sea level.

To drive investment and generate employment, ADB has been supporting the growth of micro, small, and medium-sized enterprises by improving access to finance, particularly for firms located outside major cities and/or operated by women entrepreneurs. A pilot technical assistance and analytical support program is being provided to the government of the Kostanay region to help develop local entrepreneurship. In 2019, ADB also committed an innovative project to give more than 3,000 women access to affordable housing, particularly in rural areas.

Through the years, ADB has supported agriculture in Kazakhstan by improving irrigation networks. In 2019, the bank approved a loan to help rehabilitate and improve irrigation networks totaling 171,000 hectares across four regions. This project is expected to improve agricultural productivity and diversify production away from traditional low-yielding crops.

To develop renewable energy sources and help combat climate change, ADB has been providing Kazakhstan with significant technical assistance to introduce a new carbon auctioning system, connect renewable power plants to the national grid, and develop a low-carbon growth strategy for Nur-Sultan city.

Windmills along the Almaty-Bishkek road

In 2013, ADB and the government forged the Knowledge and Experience Exchange Program (KEEP) to offer demand-driven knowledge support, including technical reports, policy advisory services, and capacity-building programs. KEEP has to date provided valuable expertise in areas such as public audit, accrual budgeting, governance, agriculture, sustainable development, and entrepreneurship.

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments from ADB’s own funds (in equity and direct loans) in 2019 amounted to $3.00 billion for 38 transactions in economic and social infrastructure, the finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2019, ADB mobilized $3.28 billion of long-term cofinancing and $3.69 billion of cofinancing in trade finance, microfinance, and supply chain finance programs. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $13.78 billion as of 31 December 2019.

Agribusiness has a huge potential to contribute to the development of Asia and the Pacific. ADB is working with private sector partners to ensure that agribusiness will create transformational impact in Asia and the Pacific.

Financing Partnerships

Financing partnerships enable ADB’s development partners, governments or their agencies, multilateral financing institutions, and commercial organizations to participate in financing ADB projects. The additional funds are provided in the form of loans and grants, technical assistance, and other nonsovereign cofinancing such as B loans, risk transfer arrangements, parallel loans and equity, guarantee cofinancing, and cofinancing for transactions under ADB’s Trade Finance Program and Supply Chain Finance Program.

ADB began cofinancing operations in Kazakhstan in 1999. Since then, sovereign cofinancing commitments for Kazakhstan have amounted to $3.83 billion for five investment projects and $4.15 million for six technical assistance projects. Nonsovereign cofinancing for Kazakhstan has amounted to $134.02 million for three investment projects.

Projects Cofinanced, 1 January 2014–31 December 2018

Operational Challenges

Massive infrastructure investment and innovative financing modalities are needed to reduce inequalities between Kazakhstan’s large cities and the rest of the country. ADB is working with the government and other development partners to help modernize Kazakhstan’s infrastructure in transport, energy, water, urban development, and rural services.

To help diversify the economy, ADB and the government are working to expand agriculture, stimulate tourism, improve logistics, foster private enterprise, promote digitalization, and ensure good governance.

The government has stated its preference for nonsovereign and subsovereign financing by international financial institutions in the local currency. ADB is responding with enhanced flexibility in its lending modalities and the provision of tenge loans through the issuance of local currency bonds.

Future Directions

Future ADB operations will help lessen Kazakhstan’s dependence on commodity exports, reduce inequalities, and address vulnerabilities associated with climate change.

ADB will support the government in attracting foreign direct investment and embracing new technology by increasing the country’s economic competitiveness and levels of development expertise.

ADB will help Kazakhstan better deliver public and social services, implement structural reforms (including those aimed at privatizing state-owned enterprises), promote public–private partnerships, improve development partner coordination, and further encourage regional cooperation and integration through the CAREC Program.