The European Bank for Reconstruction and Development (EBRD) announced last week that it has reached a new agreement with the government of Kazakhstan to boost investment and drive reforms in the country.
The agreement was signed at the Astana Economic Forum by the Kazakh Prime Minister Karim Massimov and EBRD Managing Director Olivier Descamps.
The partnership will involve major international financial institutions (IFI), including the EBRD, directing $2.7 billion from the country's oil wealth fund and other sources into important sectors of the economy.
The partnership will enable the EBRD, which is already the largest foreign investor in Kazakhstan, to significantly increase its investment in the country, with co-financing provided by the government grants. The partnership will also entail broader policy dialogue and technical cooperation.
"This agreement takes our cooperation with the government of Kazakhstan to an entirely new level," Descamps said. "It means that the EBRD will facilitate the successful implementation of the national industrialization strategy, thanks to its delivery capacity and project know-how. This partnership can be more than a smart way to channel money to the economy through IFIs. It may become a way to boost reforms, and to re-energize the transition to a market economy. And it may become a blueprint for other middle income countries."
The program will be managed by a coordinating council consisted of participating IFIs; it will be chaired by Prime Minister Massimov.
The EBRD said it will focus on priorities outlined in the recently adopted country strategy, including diversification of the economy, energy efficiency/green economy and re-balancing the role of the state in the economy.
The agreement is the latest of several deals between the EBRD and the government of Kazakhstan. Earlier last week, the EBRD and the National Bank of Kazakhstan agreed on two new facilities that will enable the EBRD to dramatically increase its lending in local currency by gaining access to the tenge equivalent of approximately $1 billion.
The EBRD has invested close to $6.5 billion in the country's economy, with more than half of the bank's projects supporting the private sector since it began its operations.
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