bne:Invest in Astana Follow us on twitter.com/bizneweurope March 2014
Content: 1 Top Stories 3 Interview 5 Feature 7 Sector 9 Chart 10 News in brief www.bne.eu
Top story
Astana to launch construction of EXPO-2017 city Construction of the EXPO-2017 exhibition complex will be part of the “Smart Green� system deployed is due to start in May 2014, three years before the across the exhibition city, which will also include a city welcomes up to 5m visitors in mid-2017. recycling and water treatment plant. Astana is investing into new housing and transport systems as well as the exhibition complex. All will incorporate advanced environmental technologies in keeping with the EXPO-2017 theme, Energy of the Future. The 175 hectares assigned to the expo city will showcase new energy generation and energy efficiency technologies introduced for the first time in the Central Asian region. These
"The first energy positive city in the world will appear in Kazakhstan," Kapparov told a briefing at the Central Communications Service in Astana on March 4. Preparations for EXPO-2017 will also include the construction of around a million square metres of housing around the exhibition area, which will
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add substantially to Astana’s housing stock. As well as being built to international standards, the residential buildings will incorporate many advanced green technologies. “This will be one of the most comfortable districts of Astana after the exhibition,” Kapparov told journalists. “A lot of housing is planned to be built there. In total, about a half million square metres of housing will be built before the EXPO and a half million more after the exhibition.”
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would be profitable for Kazakhstan. “[E]verything has been thought out so that all the buildings will be in use after the exhibition," he said. “The international pavilions will be converted into offices, or used as a scientific and technological high-tech cluster which can generate additional income for the city,” he added. "Every expo city facility will be used."
Investments will also be made into related infrastructure, such as the 38 new hotels to be Construction work is due to start in May 2014, with built in the Kazakh-capital in the run-up to EXPO the Kazakhstan, Astana pavilion - an 80-metre 2017. These include major international hotel diameter sphere - to be one of the first facilities chains such as the Marriot Astana Hotel, the Ibis built, the deputy chairman of the board of National Astana, the Hilton Garden Inn Astana - all due to Company Astana EXPO 2017, Bekzhan Kulbayev, open in mid 2014 - and the Ritz Carlton, which is told the briefing, according to Tengrinews. expected to open in 2016. “The Astana EXPO -2017 national company is finalising a feasibility study of the project," Kulbayev said. "Moreover, the market of alternative energy sources has been analysed... Calculations for their use on the construction site were conducted.” Around 20,000 workers are expected to be employed to build the EXPO-2017 facilities, of which around 70% will be Kazakhstanis. Concerns have been raised about the high costs of hosting EXPO-2017, which Kapparov sought to address by confirming that the facilities built for the event would continue to be used after 2017.
Numerous investments into improving Astana’s transport systems are also planned. A new terminal with capacity for 1,500 people will be added to Astana international airport to make way for the increased number of visitors to the city. A new railway station and two new bus stations with capacity to handle 4,500 people a day will be built within the next three years, according to a statement on the Astana akimat (city authorities) website.
New buses will also be introduced, and a Bus Rapid Transit (BRT) network put into operation. The BRT system will initially cover 23 kilometres of bus routes, later increasing to 63km on both He forecast that despite the high costs of building the left and right banks of the city. the EXPO-2017 exhibition complex, the project
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Interview including for 3G services, restructured the business organisation and process, and rebranded as Tele2. As of end-2013, Tele2 had 2.275m subscribers. However, in terms of both market share and geographical coverage, there is still room for the company to catch up with its main competitors.
Tele2 shakes up telecom market Tele2 is a relative latecomer to the fast-growing CEE/ CIS telecommunications scene, compared to the big Russian operators and rival Scandinavian firm TeliaSonera. The company’s strategy has therefore been to carve out a share in markets already dominated by the other big players – an approach it has successfully deployed in the Kazakhstani market. It took until December 2013 – almost four years after Tele2 entered the Kazakh market through its takeover of struggling local network NEO – for Tele2 to reach positive Ebitda (the amount of cash the company generates annually) in the country. When Tele2 took a majority stake in NEO in March 2010, the Kazakh operator's original owners had been on the market for some time, having made little headway against the dominant players in the Kazakhstani mobile telecom market, TeliaSonera’s Kcell and Vimpelcom. Over the next four years, Tele2 spent over $600m building up its network, which now covers around 84% of Kazakhstan and all settlements with over 5,000 inhabitants. As well as expanding coverage, the company also invested into new equipment –
“In three years we increased our market share from close to zero to 12%. We are still not satisfied with this level; our long-term target is 30%,” Tele2 Kazakhstan CEO Pietari Kivikko tells bne. Currently, Kcell and Vimpelcom have market shares of around 50% and 35% respectively. “The strategy of breaking monopolies or oligopolies is one that Tele2 has successfully used in several other markets including the Baltic states. We have so far invested $600m in our network, which was a huge financial burden, but Kazakhstan offers a great opportunity. Now we have come a long way and we will continue to expand. With sufficient effort it is possible to break a monopoly,” Kivikko says. This is a strategy that Tele2 has already used successfully in other markets, notably the Baltic states – its point of entry to the region ten years ago. As in Kazakhstan, Tele2 was a late entrant to a market where TeliaSonera was the largest player. Today Tele2 is the market leader in Lithuania and is one of the major operators in the other two Baltic states. In Kazakhstan, Tele2 plans to continue its geographic expansion, aiming for coverage of well over 90%. Kazakhstan is a particularly challenging market to cover, given its large territory and low population density. The country also has a high proportion of residents living in rural areas, with a rural population of around 40%. The company is also working to lure more customers away from its rivals, and taking advantage of the rapid growth in data
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communications. “We are already taking customers from existing players by offering better value proposals,” says Kivikko. “Kazakhstan is also experiencing significant growth in mobile data through various devices – phones, tablets, computers, and payment terminals. Kazakhstan was a late adopter of 3G so mobile data is the biggest growth area as there is room to catch up with Western Europe and other markets.”
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Until recently, mobile termination rates were totally unregulated; when Tele2 entered the market, they were around KZT21 ($0.11) per minute. Since then the rate has fallen to around KZT11 per minute, which is still higher than the retail charge for calls. By contrast, Russian mobile termination rates are equivalent to around KZT5 per minute, and in Europe the rate is close to zero.
Another measure that will benefit Tele2 is the However, further growth in voice communications planned introduction of mobile number portability especially is partly dependent on regulatory steps – again a step that typically helps the newer in Kazakhstan. entrants to a market. The Kazakh government has already decided in principle to introduce number portability, setting spring 2015 as The unusually high cost of call termination in the deadline for introduction. The ministry of Kazakhstan was one of the biggest challenges for Tele2 as a newcomer breaking into a market where transport and communications is currently at the most of the population already had a mobile phone. implementation phase. “Kazakhstan is different from other countries in that it has very high mobile termination rates, a situation that has been supporting and protecting the existing players. For a long time Kazakhstan’s mobile telecoms market was a duopoly, which contributed to keeping prices high for end users,” explains Kivikko.
Introducing mobile number portability in Kazakhstan will improve consumer choice and create pressure for better prices and services, Kivikko forecasts. “More than 100 countries have already introduced mobile number portability – you can’t fight against the current.”
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Feature give impetus to the further development of private banking and internet banking." HSBC is selling its Kazakh business as part of a retreat from non-core markets as it seeks to cut costs. The bank has sold or shut down a total of 63 businesses since 2011, according to Bloomberg.
Consolidation continues in banking sector A wave of M&A activity in Kazakhstan’s banking sector shows no signs of abating, with the sales of government stakes in several major banks followed by Halyk Bank’s acquisition of HSBC’s Kazakh operations. The last year has seen a series of deals that have overwhelmingly involved a transfer of ownership from either the state or foreign banking groups to Kazakhstani investors. On February 26, Halyk announced it had agreed to buy HSBC's Kazakh subsidiary in a $176m deal, which is expected to close by the end of 2014. Halyk is Kazakhstan's second largest lender, and also operates in Russia, Georgia and Kyrgyzstan.
HSBC entered the Kazakh market in 1998, and is the 17th largest bank in the country, with assets of more than KZT187bn. The bank took over Royal Bank of Scotland's consumer business in Kazakhstan in 2010, after RBS also decided to exit Kazakhstan amid a retrenchment to its core markets. Just days before Halyk’s HSBC deal, TAIB Kazakh Bank announced on February 12 that had changed its name to Capital Bank Kazakhstan, following its acquisition by Orifjon Shodiev, the nephew of Patokh Shodiev, one of the three owners of mining giant ENRC. TAIB Kazakh Bank, which was founded in 1992, was previously owned by Bahrain-based TAIB BANK, which owns banks and investment funds in major financial centres around the world. Other foreign banks such as Citigroup are also believed to be hoping to find an exit from the Kazakh banking sector, as international players eschew emerging markets to concentrate on their core markets.
This is a reversal of the trend seen in the boom years leading up to the 2008 financial crisis, when international banks were eager to enter the Kazakh "We will welcome another group subsidiary in Halyk market, then seen as one of the most vibrant and sophisticated in the CIS region. In addition to banks Bank. The deal represents another step forward in the performance of the group's strategy," said such as HSBC, RBS and UniCredit that made a Umut Shayakhmetova, who chairs Halyk's board. move into the market, others such as Deutsche "This acquisition will strengthen the leading Bank were also looking to enter at that time. position of Halyk Bank … to attract new customers UniCredit ended its six-year foray into the Kazakh in the retail segment, [and] large national and foreign companies operating in Kazakhstan, will market in May last year, when the bank completed
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the sale of its Almaty-based subsidiary ATF Bank to KazNitrogenGaz, a firm owned by Kazakhstani businessman Galimzhan Yesenov, the son-in-law of Almaty mayor Akhmetzhan Yesimov. The size of the deal was not disclosed, but it is believed to have been around $500m – less than a quarter of the $2.1bn UniCredit paid for ATF back in 2007. UniCredit acquired ATF at the peak of the mid2000s credit boom, shortly before the financial crisis hit Kazakhstan. By 2007, the subprime crisis in the US had already started to impact Kazakhstan’s over-leveraged real estate sector, which triggered the near-collapse of several of the country’s largest banks in early 2009. Just a year after buying ATF, UniCredit had to write off more than ¤500m from the bank's value. Meanwhile, ATF’s former shareholder, Verniy Capital owner Bulat Utemuratov benefitted from
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selling when the market was at its pre-crisis peak, and founded consumer lender KassaNova as well as taking over the local division of Russian Metrokombank, since rebranded ForteBank. In December, Kazakhstan’s state holding company Samruk-Kazyna agreed to sell stakes in two major banks, nationalised during the crisis, to Utemuratov. The fund will sell a majority stake in former BTA Bank subsidiary Temirbank while keeping a controlling stake in Alliance Bank. BTA, which the Kazakh government had been trying unsuccessfully to sell off for almost five years, will also be sold to local investors. SamrukKazyna is selling the bank to Kazakhstan’s largest lender Kazkommertsbank and Kazakh investor Kenes Rakishev, the son-in-law of Astana mayor Imangeldi Tasmagambetov, with the fund retaining a minority stake.
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Sector travellers, according to official statistics, around 90% of guests at internationally branded hotels are in the city on business. The relocation of government offices, and increasingly businesses, from the former capital Almaty to Kazakhstan’s new capital has therefore helped the local hotel market to grow. A report from property company Veritas Brown notes a “repositioning of roles between Almaty and Astana” that has driven demand for hotel rooms.
New international hotel chains to enter Astana market Astana is expected to see the opening of several major new hotels in the run-up to the EXPO-2017 world fair, more doubling the number of rooms at internationally branded hotels in the city. Several hotel chains have already announced plans to open in the Kazakhstani capital. Three of these - the Marriott Astana Hotel, the Ibis Astana and the Hilton Garden Inn Astana - are all expected to open in mid-2014. Central Asia’s largest development, the Abu Dhabi Plaza, which will include a hotel cluster, is expected to open in 2016, as is the Astana Ritz Carlton. While Astana is a growing city, until now the city has had only a handful of internationally branded hotels, with a combined total of just over 700 rooms. The opening of the Radisson Park Inn in 2013 increased that total by around a quarter. The top end of the Astana hotel market is almost entirely dedicated to business travel. While around half of all visitors to Astana are business
Overall hotel occupancy rates stood at 34.5% in 2012, the report says. However, demand peaks during the conferences and other events that are becoming increasingly frequent in the capital. These include the annual Astana Economic Forum, numerous sector specific conferences such as MINEX Central Asia and Smart Astana, and international events including the European Bank for Reconstruction and Development’s annual meeting and business forum (May 2011) and the Organisation for Security and Cooperation in Europe summit (December 2010). During peak periods in spring and autumn, occupancy rates are as high as 90-100%. More hotels have continued to open as demand grows. As of late 2013, there were 136 hotels registered in Astana providing a total of 5,150 rooms, according to Veritas Brown’s report. However, around three-quarters of these are uncategorised establishments; there are few internationally branded hotels and the quality midrange segment is “poorly represented” in the city. The market is expected to develop as Astana prepares for the EXPO-2017 world fair in three years time, the first time the city has hosted an event on this scale. Astana is expected to receive an unprecedented number of visitors, with estimates ranging from four to five million during the three months of the expo.
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In anticipation of these visitors, the pace of hotel development is picking up – in terms of both quantity and quality. “The anticipated hotel pipeline should double the current stock, putting hotel performance under pressure,” says a report from
consultancy HVS. “However, taking into account the fast growth of the city’s economy, as well as the government support it is currently enjoying, the hotel market there should be able to absorb the future supply in the medium to long term.”
Change and competition
organising meetings and seminars, excursions in Astana and to nearby attractions, and other services. “We have a small business centre here, when we built the hotel back in 2006 we didn’t realise the importance of a conference centre, so we are now planning to build one for our guests,” Smagulova says.
The opening of numerous new hotels in Astana and the arrival of international chains have forced local hoteliers to improve their quality of service, says Dilyara Smagulova, founder and chief executive of family-run Hotel Mukammal. Mukammal was one of the first Astana-based hotels to register with online booking services Smagulova and her family built the hotel back in such as Booking.com and Expedia, which helped 2006, and since then “it has become not just a to attract foreign travelers, and visitor numbers business but a way of life for us,” she says. During have since been increased by word of mouth the last eight years, the Kazakhstani capital has recommendations. also seen the opening of many new hotels and a steep increase in competition within the sector. Like other Astana hotels, the busiest times are when the city is hosting a major event like the “Many hotels have opened in the last eight years annual City Day, and one off events such as and competition has increased strongly. Most the 2010 OSCE summit meeting and the 2011 hotels offer the same range of facilities, so to Asian Winter Games. In addition to the hotel, differentiate themselves from the competition, Mukammal now also offers catering services, hotels need to provide better service,” she tells bne. organising coffee breaks, buffets and banquets across the city, mainly for corporate and The majority of the hotel’s guests are business government clients. travelers, and Smagulova offers help with
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Chart Business confidence maintained in Kazakhstan Business confidence remained stable in Kazakhstan in February, despite the shock to the economy when the Kazakhstani currency, the tenge, was devalued on February 11. The business confidence index compiled by the Agency of Statistics of the Republic of Kazakhstan remained constant in February form the month before, with more respondents saying they expected to see their business expand than contract in the period until April 2014. The majority, 58%, of the company directors surveyed said they expected financial and economic activity to remain constant until April,
The business confidence index
while 12% forecast an increase and 6% expected a drop in activity. The 19% devaluation of the tenge, announced by Kazakhstan’s central bank on February 11, is expected to stimulate demand for locally produced goods, as well as support the mining sector. The government raised its 2014 GDP growth forecast to 6.5% following the devaluation. Meanwhile, directors of trading companies were less optimistic, following a fall in consumer demand and overall activity in the sector in January. The business confidence index for trading companies dropped by 11% in February.
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News in brief Kazakhstan set to revive stalled Eurobond issue The Kazakh government is set to issue a sovereign Eurobond this year, after putting off a plan to raise $1bn last year. Should it go ahead, it would be Astana's first foray onto the international markets for 13 years. Finance Minister Bakhyt Sultanov said the issue will take place in 2014, although he offered no details on any specific timing, according to a statement published on the finance ministry's website on February 28. "This year, in order to reduce pressure on the liquidity of the domestic market, we plan to issue Eurobonds on foreign markets," Sultanov announced at a cabinet meeting the previous day. "This will be the first issue of Eurobonds in the last 13 years. It will form the benchmark for Kazakh companies attracting outside capital and will reduce the cost of borrowing." Kazakhstan's last sovereign Eurobond issue was in 2000, when the country raised $350m. Those bonds were redeemed in 2007. At the same time, Astana is keen to keep a lid on credit growth in the economy, with unsecured retail lending in particular looking a risk to a banking sector only just getting back to its feet after the government was forced to bail it out in 2009. "[I]n order to ensure economic security," Sultanov added, "we have worked out measures to monitor and regulate the process of debt management in the quasi-public sector."
in a substantially over-subscribed two-part bond issue in April, while agricultural holding KazAgro issued $1bn worth of Eurobonds in May. The Kazakh government had previously announced in May that it was planning a $1bn sovereign Eurobond. "We are going to the external markets not for money but for credit, for loans, for benchmarks and in order to make ourselves present in this market," then-finance minister Bolat Zhamishev told a European Bank for Reconstruction and Development (EBRD) meeting in Istanbul.
Kazakhstan aims to attract more FDI Kazakhstan is planning new measures to attract investors, with a new action plan, currently being drafted, due to be submitted to the government by the end of March. Kazakhstan is already the largest recipient of foreign direct investment (FDI) per capita within the CIS region, but the government is keen to encourage further investment. Kazakhstan’s Economy and Budget Planning Minister Yerbolat Dossayev said February 28 that work on a new plan to attract investment was underway. "The Economy and Budget Planning Ministry is drafting the investment attraction action plan which will provide for measures to ensure stability of the laws, to introduce a visa-free regime, and simplify the procedure of employing foreign nationals," Dossayev said, according to Kazinform. The ministry is also drawing up amendments to Kazakhstan’s tax code, which are due to be submitted to the parliament in September 2014.
While the sovereign has not been in international markets for many years, state-owned At an expanded government meeting on February organisations have been raising funds recently. Oil 14, President Nursultan Nazarbayev told officials and gas company KazMunaiGas borrowed $3bn that not enough had been done to attract foreign
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investors to industrial projects in Kazakhstan, threatening to dismiss the government if the situation did not change.
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New airline to be launched in Kazakhstan
A new airline to operate on domestic routes will be “[T]here are some international institutions that launched in Kazakhstan, as the government aims want to participate in Kazakhstan’s industrialization to open up the air transport sector, President endeavors... There should be a list of their Nursultan Nazarbayev announced February 26 requirements and their requirements should be met,” Nazarbeyev told government officials. Nazarbayev outlined plans for the new airline, Air Kazakhstan, at a meeting with Pierre Following the meeting, Prime Minister Serik Beaudoin, president and CEO of plane and train Akhmetov has asked for a list of potential manufacturer Bombardier Inc., according to a investors willing to work in Kazakhstan to statement on the presidential website. be drawn up by mid-March, according to the primeminister.kz website. "We are interested in Bombardier's entering the Kazakh market. In this context we plan to launch Meanwhile, in a move that will affect local Air Kazakhstan airline to perform domestic businesses, the government has introduced a flights," Nazarbayev said. moratorium on inspections of small and medium sized enterprises from April 2, 2014 to January 1, He added that following the launch of Air Astana 2014. in partnership with BAE Systems in 2001, "We can build on the experience when launching the new Kazakhstan has steadily improved its position on airline." international indices that rate countries according to their business environments. On the 2014 World Kazakhstan's government has been looking into Bank Ease of Doing Business index, Kazakhstan ways of opening up the domestic air transport was in 50th place, up from 53rd in 2013, following market, where prices are considerably higher than improvements in the dealing with construction for comparable routes in Russia. Options under permits, registering property and resolving insolvency discussion include allowing foreign airlines to categories. Kazakhstan was also in 50th place on the enter the domestic market. World Economic Forum’s Global Competitiveness Index, up from 51st the previous year. In January 2014, Kazakhstan's ministry of transport and communications announced that The 2013 figures are not yet available, but 13 new air routes are due to be launched in Kazakhstan attracted a record level of foreign direct Kazakhstan in 2014. investment (FDI) - $22.5bn - in 2012. The amount of FDI received in 2012 was well above pre-crisis levels, according to state investment attraction and Kazakh president pledges export promotion agency Kaznex Invest. to prevent bank failures Kaznex also reported in 2013 that the structure of FDI inflows into Kazakhstan has changed since the launch of the state programme of accelerated industrial-innovative development in early 2010, with a greater share of investments now directed at the manufacturing sector.
The Kazakh government will prevent any domestic banks from collapsing, President Nursultan Nazarbayev told a government meeting on February 21. Concerns about the stability of the Kazakh banking
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sector have been growing since the devaluation of the tenge on February 11 was followed by a run on three major banks. Nazarbayev said that local banks "will not go bankrupt" and that the government will "guarantee the safety of people's savings." "As for those who provoked recent financial distress in some banks of Kazakhstan, they have already been found and would be held liable. What we all want is peace and stability in Kazakhstan and this is a goal for the entire nation," he added, according to a statement on the presidential website.
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to finish the project within six months, Azadani added. Meanwhile, Turkmenistan is due to finish its section of the line within three months, and the two countries will work together on a bridge over the Atrek river, which will take six months to build. The three countries signed an initial agreement on the project in 2008. When completed, the 960 kilometre railway is expected to transport up to five million tonnes of goods a year.
On February 19, hundreds of people queued at branches of Alliance Bank, Bank CenterCredit and Kaspi Bank in an attempt to withdraw money from hard currency accounts. Panic spread as some branches refused to return deposits and stocks of cash ran short. While the rush has since slowed, Kaspi reports that over $200m was withdrawn from its accounts.
ICD launches human capital development programme for financial sector
Several people have been arrested in Almaty on suspicion of causing the bank run by sending out thousands of SMSs and WhatsApp messages claiming the banks were about to collapse.
The aim of the programme is to build up a pool of highly talented Islamic finance executives to lead the industry in the future, the ICD said in a statement. The ICD hopes the programme will become the "gold standard" for developing human capital in the Islamic finance sector.
Iran-Turkmenistan-Kazakhstan railway to launch in mid 2014 The Iran-Turkmenistan-Kazakhstan railway, which will give Central Asian commodities producers access to the Persian Gulf ports, will be put into operation within six months, an Iranian official has said. Iran has already completed most of its section of the line, with just 400 metres still to build, the deputy director of the Construction & Development of Infrastructures Transportation Company Seyed Masoud Nasr Azadani said February 26 according to IRNA News Agency. Officials from Iran and Turkmenistan have agreed
The Islamic Corporation for the Development of the Private Sector (ICD), a member of Islamic Development Bank Group (IDBG), has launched its Islamic Finance Talent Development Programme.
The programme targets mid-career professionals who with a high level of leadership ability, and includes a rotational programme with three eightmonth assignments in an IDB Group sub-business. “A shortage of qualified human capital is one of the most serious challenges facing the Islamic finance industry today,� according to the ICD. "The focus of IDBG was to generate competent executives to the office and to help shape various opportunities for the institution" said Mr. Khaled AlAboodi, the CEO and General Manager of the ICD.
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China - Central Asia trade reaches $40bn Trade between China and the Central Asian republics was up 13% in 2013 to reach $40bn, a spokesperson for China's ministry of commerce announced February 13. Ministry spokesman Yao Jian said that the largest share of trade with the region was with Kazakhstan, which accounted for $28.6bn during 2013, up 11.3% year-on-year, Xinhua reported. In September 2013, during Chinese President Xi Jinping's tour of Central Asia, Astana and Beijing agreed to raise bilateral trade to $40bn by 2015.
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A deal between KMG and the China Development Bank was signed in Beijing on February 27, Kazinform reports. KMG subsidiary KazTransGas will use the funding to build a 311 kilometre section of the pipeline as well as a compressor plant at Karaozek in the Kyzylorda region, making it possible to finish building the pipeline by the end of this year. The Beineu-Bozoi-Shymkent pipeline will supply gas from Kazakhstan's Caspian oilfields to Shymkent and other settlements in the south of the country, which currently rely on gas imports from neighbouring Uzbekistan.
The pipeline will also enable gas exports to China, The visit also saw the launch of gas exports to as it will connect to the Kazakhstan - China China from the Galknysh field in Turkmenistan, pipeline, which runs from the Kazakh-Uzbek which has become China's largest gas supplier. border to Khorgos on Kazakhstan's border with Deals were signed with all five of the Central Asian China. republics in areas including energy, pipelines, mining and infrastructure.
Kazakhstan to seal
Meanwhile the sharpest increase in Chinese trade international nuclear fuel bank with the region was with Uzbekistan; China-Uzbek trade was up 58.3% in 2013 to reach over $4bn. Kazakhstan is in the final stages of talks with the International Atomic Energy Agency (IAEA) on Yao added that the ministry would continue to plans to host an international nuclear fuel bank. promote trade, including through facilitating cargo transport and promoting e-commerce. As the range of countries investing into nuclear The ministry may also consider setting up new power plants grows, the bank will make it economic zones on the Chinese border with possible for them to buy fuel rather than setting Central Asian republics. up their own enrichment plants. The launch of the international bank then is designed to help prevent the proliferation of nuclear weapons.
KazTransGas borrows $700m for BBS pipeline
KazTransGas, a subsidiary of Kazakhstan's state oil and gas company KazMunaiGas, has borrowed $700m for the China Development Bank to complete construction of the Beineu-BozoiShymkent gas pipeline.
"Kazakhstan is to host the international bank for low-enriched uranium and the IAEA is currently finalizing negotiations on an agreement," says a statement from the Kazakh ministry of foreign affairs.
Astana Open for Business
Kazakhstan’s modern, high-tech capital has become a centre of manufacturing and innovation.
Infrastructure
Location
∙ Astana has newly-built transport and communications infrastructure and utilities as well as a modern international airport ∙ Construction of a light railway linking the airport, railway station and business centre started in 2012
∙ Astana is in the heart of the Eurasian landmass, on the crossroads of Europe and Asia ∙ The Western Europe – Western China international transport corridor will cut road transit times across Kazakhstan ∙ Kazakhstan has launched a comprehensive overhaul of its railway infrastructure, building new domestic and international links
Business environment ∙ Kazakhstan was one of the highest climbers on the World Bank’s 2013 Doing Business index, rising seven points to 47th place ∙ The government is committed to working with businesses to further improve the business climate ∙ WTO accession is expected in late 2012 or early 2013
Population ∙ Kazakhstan has a fast growing population with rising income levels ∙ As of July 2012, Kazakhstan’s population stood at 16.79 million ∙ Astana’s population has risen from under 300,000 in 1997 to 758,000 in July 2012
Tax and customs regime ∙ Favourable tax and customs regime for companies investing in Astana New City, including exemptions from corporate profit tax, land tax and VAT on building materials ∙ “Single window” information service for investors ∙ Stable tax regime for international investors
Facilities
High-tech
∙ New residential buildings, offices and shopping centres built to international standards ∙ World class sports facilities built for the 2010 Asian Winter Games hosted in Astana and Almaty ∙ Haileybury International School opened in Astana in 2011
∙ Astana aims to become a hub for high-tech manufacturing and innovation ∙ OpenWiFi project to provide free wireless internet in public places ∙ High-tech pilot projects launched in health and education sectors
Mayor’s office of Astana city, Investor’s service center Entrance 5, 28, Kabanbay avenue, Astana, Kazakhstan
Customs Union ∙ Kazakhstan was a founder of the Customs Union alongside Russia and Belarus ∙ Investors in Kazakhstan have access to a market of over 160 million consumers
Fast-growing economy ∙ Kazakhstan’s economy has achieved steady growth for the last decade. The IMF forecasts 5.5% GDP growth in 2012 rising to 5.7% in 2013
Tel: +7 (7172) 57-89-85, 57-89-86, 57-89-87 e-mail: iscastana@gmail.com www.investinastana.kz