Kazakhstan and ADB

ADB's Work in Kazakhstan

Kazakhstan became a member of the Asian Development Bank (ADB) in 1994, shortly after it achieved independence.

During the past 27 years, ADB has aided Kazakhstan with financing, technical assistance, and knowledge support as part of its country 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. Kazakhstan is an active member of the Central Asia Regional Economic Cooperation (CAREC) Program with the largest portfolio among its member-countries amounting to $9 billion, of which $2 billion was financed by ADB.

In 2020, ADB provided special assistance to Kazakhstan to help counter the severe impacts caused by the coronavirus disease (COVID-19) outbreak.

Since 1994, ADB has committed almost $6.48 billion in loans and over $61.75 million in technical assistance, including ADB-administered cofinancing, for Kazakhstan.

To assist Kazakhstan with integration into global networks and increase its transit potential, ADB is helping reconstruct about 500 kilometers (km) of roads in the Mangistau region, including 70 km of the Zhetybay–Zhanaozen road section commissioned in 2020. Works are ongoing on 300 km of the Aktobe–Makat road, with completion due in 2021. In 2020, ADB and JSC “Kazavtozhol” signed a local currency loan for reconstruction of 90 km of road between Aktobe and Kandyagash.

To drive investment and generate employment, ADB supported 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. In 2020, an innovative project was commenced to give more than 3,000 women access to affordable housing, particularly in rural areas.

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

To develop renewable energy sources and help combat climate change, ADB has been providing Kazakhstan with 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.

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 since provided valuable expertise in areas such as public audit, accrual budgeting, governance, agriculture, green technologies, economic reforms, healthcare, and financial integrity. As it remains an important source of international best practices and capacity development for government officials, the fourth phase of KEEP was launched in November 2020.

Windmills along the Almaty-Bishkek road

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments in loans and equity investments from ADB’s own funds in 2020 amounted to $1.4 billion for 38 transactions in economic and social infrastructure, finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2020, ADB mobilized $1.9 billion of long-term project cofinancing and $3.3 billion of cofinancing through its Trade and Supply Chain Finance Program and Microfinance Program. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $14.3 billion as of 31 December 2020.

Total outstanding balances and commitments of ADB’s nonsovereign transactions in Kazakhstan as of 31 December 2020 was $142 million, representing 1% of ADB’s total nonsovereign portfolio.

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 financing 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 and Supply Chain Finance Program and Microfinance Program.

ADB began cofinancing operations in Kazakhstan in 1999. Since then, sovereign cofinancing commitments for Kazakhstan have amounted to $4.58 billion for six investment projects and $7.15 million for nine technical assistance projects. Nonsovereign cofinancing for Kazakhstan has amounted to $134.02 million for three investment projects.

In 2020, Kazakhstan received $750 million loan cofinancing from the Asian Infrastructure Investment Bank for the COVID-19 Active Response and Expenditure Support Program.

A summary of cofinanced projects is available at Kazakhstan: Cofinancing.

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

ADB operations in Kazakhstan will aim to ensure sustainable pandemic recovery, minimize the country’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 technologies by increasing the country’s economic competitiveness. ADB will help Kazakhstan better deliver public and social services, implement structural reforms, promote public–private partnerships, improve development partner coordination, and further encourage regional cooperation and integration through the CAREC Program.