The European Bank for Reconstruction and Development (EBRD) announced on Wednesday that it has agreed on steps with the National Bank of the Republic of Kazakhstan (NBRK) to significantly enhance the EBRD's financing capability in the local currency.

The two sides signed two facilities that will allow the EBRD to source as much as $1 billion in the Kazakhstani tenge from the NBRK to lend to domestic financial institutions and municipalities.

The two facilities will include an amended repo agreement for the equivalent of $400 million equivalent and a swap framework agreement for the equivalent of $600 million over a three-year period.

The agreements were signed during the Astana Economic Forum by NBRK Governor Kairat Kelimbetov and EBRD Managing Director Olivier Descamps.

"This step by the National Bank of Kazakhstan is extremely important for the EBRD and for Kazakh businesses which will benefit from our financing in tenge," Descamps said. "Our strategic priorities in Kazakhstan focus on diversification, development of the regional infrastructure and strengthening the role of the private sector. These priorities require us to lend more to local businesses in local currency. Today's agreements open the door for us to significantly increase and improve our lending in tenge."

Kelimbetov said the agreements reached during the forum will allow the EBRD to expand lending for projects with Kazakhstan's financial institutions.

"This will be especially important for micro and SME clients who need protections from foreign exchange risk," Kelimbetov said.

Since it began operating in the country, the EBRD has invested nearly $6.5 billion in Kazakhstan's economy, with more than half of it invested in the private sector.