Page 8 - EBRD_newspaper_May2017

8 bne IntelliNews Daily
Central Asia and Caucasus
May 9, 2017
EBRD to focus on Kazakhstan’s reforms and green energy sector
telliNews. “ Lower commodity prices, better connectedness arising from implementation of the One Belt One Road Initiative provide companies in Kazakhstan with new chal- lenges and opportunities. The EBRD will remain one of the key investors in the coun- try and a key partner for Kazakhstan in its reform efforts. The non-extractive sectors in the country will be key for the EBRD, as well as working towards improved connect- edness and a greener, more sustainable energy sector.”
The draft of the EBRD’s 2017-2021 Ka- zakhstan Country Strategy, expected for approval by July, notes that the bank hopes to continue its assistance to “Kazakhstan’s transition to a low-carbon economy, includ- ing in relation to its Conference of the Parties (COP21) commitments, green legislation and investments in energy efficiency and renew- ables ... Energy and resource efficiency and climate change mitigation will continue to be a major focus of its work.”
Kazakhstan has set goals to cut green- house gas emissions under the Paris COP21 climate agreement, and to raise the share of renewable energy in the country’s total production, to 3% and 10% by 2020 and 2030 respectively.
The EBRD has supported sustainable energy in Kazakhstan consistently over the past few years. Among the latest examples, the EBRD has approved a €200mn financing scheme for renewable energy projects in the country in December 2016.
In January, the bank, as part of its Green Energy Transition approach, shared its goals to assess the potential to develop a “green financial system”. A green financial system is meant to boost funding for green projects in the country and beyond. It is planned to incorporate the system in the Astana Inter- national Financial Centre (AIFC), which will be launched as part of the EXPO 2017 show- case. The AIFC aims to become a regional financial hub.
Kanat Shaku in Almaty
When Kazakh President Nursultan Nazara- bayev unveiled earlier this year his plan for a “third phase” of Kazakhstan’s economic modernisation, seasoned observers were sceptical. Announcements of sophisticated development programmes are nothing new for the oil-rich Central Asian republic, and are usually best viewed as acknowledge- ments that problems exist rather than con- crete proposals to tackle them.
The newest plan is the latest demonstra- tion that the Nazarbayev regime is at least aware of the oil-dependent country’s need for diversification. Kazakh analysts estimate that Kazakhstan is even more dependent on hy- drocarbon exports than neighbouring Russia.
However, what makes this more urgent than previous announcements is the eco- nomic slowdown in the country, coupled with a green energy themed EXPO-2017 international fair scheduled for June in the capital, Astana.
The Kazakh economy slowed down to 1% in 2016 from 1.2% in 2015, itself down from 4.1% in 2014, following the oil price collapse.
International observers and lenders, in- cluding the EBRD, have looked favourably on the proposed reforms. The EBRD’s con- fidence in the outlined changes is backed by progress the bank has observed over recent years in the country, in which it has invested $7.5bn to date.
“[Kazakhstan] used to be a country in which we invested about €250mn each year roughly – until about 3-4 years ago when they started reforming,” EBRD President, Suma Chakrabarti, said at a press briefing in London on May 2. “They reformed very quickly, and this allowed us last year to invest just over €1bn. So you can see a step change there.”
Chakbarti, who will attend upcoming events in Astana including EXPO 2017, the Ministerial Conference, Astana Economic Forum and the Foreign Investors Council,
noted that “Kazakhstan was our number two market last year”.
“This is a critical period for Kazakhstan as the country aims to improve competitiveness and to modernise, adjusting to new global economic realities,” Agris Preimanis, EBRD Director, Head of Kazakhstan, tells bne In-
“This is a critical period for Kazakhstan as the country aims to improve competitiveness and to modernise”