Within three years, the government is planning to increase the capital in the Development Bank of Kazakhstan up to $1 billion. This will allow the DBK to place truly large-scale investments into the Kazakhstani economy. A special emphasis in the Bank’s operations has been made on investment projects aimed at developing new technology and infrastructure.
According to the analysis, in the next 10 years, investments in infrastructure projects in Kazakhstan and Central Asia based on hi-tech solutions will be the top-5 ranked world-wide. Therefore, the DBK is paying attention to such projects. Over the long-term, the DBK could become recognized by the international financial community as a provider of investment and trade services in Central Asia as well as to the Pre-Caspian countries. The achievement of this goal will allow for creating support infrastructure for supporting quality growth of Kazakhstani business and eventually, making it one of the 50 most competitive countries in the world.
What has the DBK done over the five years of its existence? As of the beginning of its operations, the Bank has approved 40 separate investment projects and 46 export operations for a total of $2 billion. The total value of its participation in these projects has been estimated at $808 million. From early 2006 alone, the DBK has approved 12 investment projects and export operations for a value of more than $200 million, with a participatory share of $61.7 million.
For loans allocated by the DBK for the implementation of investment projects, mainly long-term, the date for repayment for the majority of them has not come as of yet. At the present time however, debtors have already fully repaid 32 loans for a total of $165 million, including 4 amounting to $15 million this year.
The share of average term credit (up to 10 years) in the DBK’s portfolio is 48.3%; long-term credits (over 10 years) total 51.7%. The average interest rate for these loans is 8.51%; and the average performance period is 10.66 years. The DBK provides over one quarter of all long-term loans to legal entities for investment projects.
The loan portfolio of the DBK as of October 1st was $390 million, having jumped by $38 million. Credit given for the realization of investment projects dominates the structure of the Bank’s portfolio (84%).
Investment projects that are approved by the Bank correspond to the goals, tasks and strategic directions that are outlined in the Industrial-Innovation Development Strategy of Kazakhstan for 2003-2015 (SIID). The Bank funds projects in six of the seven most promising industrial clusters (metallurgy, transport logistics, the textiles and food industry, oil and gas machinery, and the production of construction materials). Prior to the adoption of SIID, the Bank had approved and funded 11 investment projects for a total value of $114 million with the Bank’s participation in the amount of $83 million.
The creation of new and the modernization of existing industries as a result of the implementation of 18 investment projects funded by the DBK is a genuine confirmation of the Bank’s successful operations.
In early 2006, investment projects for the reconstruction of looms and dyeing machines and the production of cotton fabrics by the Melanzh JSC (Shymkent), for expanding and modernizing drinks production, including lemonades and mineral water by the Susyndar JSC (Almaty) and for the production of high octane ecological fuel by the BIOHIM JSC (North Kazakhstan Oblast) were conducted for total of $143 million with the Bank’s share at $102.4 million.
According to research conducted by the Bank, in H1 2006, the cumulative amount of produced goods and services at commissioned enterprises funded by the Bank totaled over KZT 16.1 billion. The competitiveness of goods was noted by the fact that that a significant portion was exported (over 43% of the total amount of KZT 5.8 billion).
Taxes and other payments by enterprises funded by the Bank into the budget were nearly KZT 0.6 billion during H1 2006. Thus, the additional payments into the budget were made as a result of the commissioning of new industries. Nearly 3,000 permanent jobs were created, and 11,000 jobs were developed in accompanying industries, for a total of 14,000 new positions. In addition, additional jobs were formed at enterprises carrying out launch and adjustment operations. The total amount of new jobs was over 14.5 thousand. The average monthly salary for workers at debtor enterprises was about KZT 37.5 thousand.
Investment projects with the Bank’s participation are being conducted in 15 different regions of Kazakhstan. In addition, exceptionally multi-regional projects are being carried out in two oblasts; Dzhambul and Karaganda, and it is only Kzylorda that does not have any projects that have been approved by the DBK for funding.
The fact that the Bank is successfully realizing the goals established for it and investors trust it as a financial institution carrying out the state investment policy is demonstrated by the increase in its credit ratings since the beginning of its operations, assigned by international rating agencies to a sovereign level rating: Moody’s Investors Service –