15 August 2005
The Kazakhstan Country Update provides information about recent developments, decisions, and civil society activities related to International Financial Institution (IFI) involvement in Kazakhstan.
By Jelena Kmezic
Also Available: [
Pусский] (Acrobat PDF 234 KB)
The Kazakhstan Country Updates provide information about recent developments, decisions, and civil society activities related to activities of the International Financial Institution’s (IFIs) in Kazakhstan.If you would like to be included or removed from the distribution list, please email the moderator, Heike Mainhardt-Gibbs at . Correspondence with BIC may be conducted in Russian.
I. IFI Project Activities
WB approves Agricultural Competitiveness Project
On July 14, 2005 the World Bank released revised Project Information Document for the North-South Electricity Transmission Project. The entire project will be carried out in three phases and it includes the construction of 1,115 km of overhead 500 kV, single circuit alternate current (AC) line and upgrades of four high voltage air-insulated substations. In March 2004, KEGOC signed loan agreements with EBRD and the Kazakhstan Development Bank (KDB) for a total of US$81 million to finance Phase I construction and the World Bank will provide $100 million, out of total estimated cost of $161.1 million, for the Phase II. Board date for the project is set for October 27, 2005.
IMF Concludes Article IV Consultation
On July 1, 2005 IMF concluded the Article IV consultation with the Republic of Kazakhstan. The IMF press release of July 13 said the Fund “commended the Kazakhstani authorities’ prudent macroeconomic policies in the past several years, which have been critical in achieving rapid economic growth, declining unemployment, and sustained reduction in poverty.” The report says the Kazakh economy is growing rapidly and that GDP grew 9.4% in 2004. The IMF points out that, while Kazakhstan is rich in oil, various economic sectors have been responsible for the growth. At the same time, the report argues that to boost its oil industry Kazakhstan needs to cope with hard tasks such as efficient and environmentally secure management of its oil fields, control inflation and carry out structural reforms to diversify its economy. Full report was published on July 21, 2005 and is available at the IMF website and via the link below.
For related documents, Statistical Appendix, Selected Issues Report, and IMF Press Release on the Article IV Consultation please see:
EBRD released four new Project Summary Documents
On June 14, 2005 the EBRD released Project Summary Document (PSD) for Astana New Transport System. Proposed project is supposed to help construction of a modern transit system in the city of Astana, comprising a Light Rail Transit (LRT) and Bus Rapid Transit (BRT). Loan in the amount of up to EUR187 million will be extended directly to Astana Transit Company which is, according to EBRD, a new special purpose company created to implement and manage a new public transport system in Astana. To view project summary please click on the link below:
On June 24, 2005 PSD for KEGOC: Ekibastuz-YukGres power transmission was released. EBRD project objectives are to address energy and peak supply deficits in South Kazakhstan, improve electricity transmission reliability, reduce transmission losses and contribute to development of regional electricity trade in Central Asia. The EBRD will provide $87.8 million for the project to the Kazakhstan Electricity Grid Operating Company (KEGOC), the 100% State-owned natural monopoly high-voltage long distance electricity transmission company. Board date for the project is scheduled for November 1, 2005. To view the full project summary please see the link below:
On Jul 19, 2005 PSD for Regional Gas Distribution Project was released. According to the PSD the project will finance urgent rehabilitation of gas distribution pipeline network and meters installation in Southern Kazakhstan to reduce losses, improve collection rates and continue safe supply of gas to domestic consumers. EBRD will provide a loan of $50 million to the Joint Stock Company KazTransGas Distribution (KTGD), a fully owned subsidiary of Joint Stock Company KazTransGas (KTG). Board date is scheduled for November 29, 2005. To view the full project summary please follow this link:
On Jul 21, 2005 EBRD released PSD for Savola Kazakhstan project. As stated in the PSD, proposed project is a brownfield expansion of the operations of Turkuaz Edible Oil Industries, a subsidiary of Savola Edible Oils, through the capital expenditures in the refining and crushing facilities. EBRD financing will be up to $16 million to the Turkuaz Edible Oil Industries, a sunflower oil producer located in Kazakhstan and involved in the crushing of sunflower seed, and selling of the refined, bottled oil. Projected Board date for the project is September 6, 2005. To view this PSD please follow the link below:
II. IFI Consultations and Policy Updates
IFC Policy and Performance Standards
A second draft of the IFC’s new Policy and Performance Standards will be published by end of July and considered by the Board Committee on Development Effectiveness (CODE) in the last week of August. The Guidance Notes regarding implementation of performance standards and the revised Information Disclosure Policy will be submitted to CODE at the same time. After the CODE meeting, the second draft will be disclosed for a 30-day public comment period. The final Board date for approval of IFC’s new policies is expected to be in mid-November. For more information on the IFC policy review processes, please see the following websites:
ADB launches Safeguard Policies Update
On July 2005, the Asian Development Bank (ADB) announced that it is beginning with a safeguard policy “update” in order to “enhance the effectiveness of its safeguard policies, and ensure the relevance to changing client needs and new lending modalities and instruments.” The three ADB safeguard policies that will be subject for review are Involuntary Resettlement (1995), Indigenous Peoples (1998), and Environment (2002). In August a discussion paper is expected to be posted, after which stakeholders will be invited to review and respond to it. The ADB expects to commence consultations in September, and will hold five regional consultations and five or more country consultations. The entire safeguards policy review is expected to last for about 15 months. The ADB is welcoming inquiries and suggestions to be sent to: . The point person for the ADB Safeguards Review is Albab Akanda ().
IMF Guide on Resource Revenue Transparency
In June 2005, the IMF released the final version of its “Guide on Resource Revenue Transparency.” The final version does not appear to differ significantly from the Draft Guide. Responses to public comments on the December 2004 draft are provided in an appendix to the final Guide. The Guide, which outlines some principles of best practice regarding fiscal management of natural resource revenues, is currently available only in English at the IMF web site and via the following link:
The draft guide, published in December 2004, is still available in multiple languages on the Fund’s website:
III. Civil Society Activities
December Conference: Assessing the World Bank Group’s Progress on the EIR
In early December 2005, CEE Bankwatch and BIC will host a conference to highlight the status of World Bank Group (WBG) performance on the EIR recommendations. Over the next several months, case studies assessing the WBG’s implementation of the EIR will be conducted in Europe and Central Asia (ECA). The case studies will largely reflect a list of EIR progress indicators prepared by Bankwatch and BIC. While the primary purpose of the conference is to present EIR project case studies and an overall EIR Status Report, there will also be opportunities for CSOs to meet with World Bank Executive Directors to advocate enhanced implementation of the EIR and to participate in a CSO planning session.
Although the case studies currently underway are only in the ECA region, Bankwatch and BIC would like to invite individuals to contribute case studies from other regions and, more generally, to participate in the conference and meetings with the Board of Directors. If you are interested in conducting a case study, providing comments or suggestions on the progress indicators, or attending the conference please contact Heike Mainhardt-Gibbs at: or Petr Hlobil at: .
NGOs recommend participatory process in ADB Safeguards Policy review
In a letter submitted to ADB President Haruhiko Kuroda on July 22, thirteen civil society organizations from across Asia, US, Europe, and Australia put forward recommendations to help ensure meaningful civil society participation in the planned ADB Safeguard Policies update, and cautioned the ADB against extremely rapid and selective plans for engaging external stakeholders. NGOs expressed hope that the Review will not in any way weaken existing safeguard standards, and instead contribute to the strengthening of the Policies and their implementation. To view the full letter please follow this link:
CSOs voiced their concerns during G8 Summit in Britain
The summit of the Group of Eight (G8) industrialized countries was held in Gleneagles in Scotland on July 6-8, 2005. The G8 nations are Britain, Canada, France, Germany, Italy, Japan, Russia, and the United States. Civil society organizations and representatives from around the world followed the summit. Two dominating themes were debt relief and climate change. The G8 multilateral debt cancellation proposal, which foresees cancellation of World Bank, IMF, and African Development Bank debt, represents a positive step forward but several civil society groups raised concerns about the harmful impact of continued conditionality for indebted countries. The proposal does not ensure that the people of the Global South will regain control over economic decisions that affect their lives. Civil society groups also called for G8 countries to make significant cuts in their current greenhouse gas emissions. To access more information and an analysis of the G8 summit go to the following web page:
IV. General News and Developments
Export Pathways for Kashagan Oil
According to the Messenger, by 2010 four companies of the BTC Co. companies (Eni, Inpex, TotalFinaElf and Conoco-Phillips) will deliver 500.000 Barrels of oil a day from Kashagan field in Kazakhstan to Baku by tankers. Part of oil will be delivered via the Baku-Tbilisi-Ceyhan oil pipeline. The article quotes a source as saying; "In this period some 40-42 million tons of oil will be supplied through the Azeri-Chirag-Gunashli field a year via the pipeline with the total capacity of 50 million tons a year.” Part of oil lifted from Kashagan will be delivered via the Baku-Supsa oil pipeline. It is also planned to transport oil via the northern route' through Russia. (Source: The Messenger, 15 July, 2005)
Kazakhstan signed $23 billion Caspian Sea Oil deal with Russia
Kazakhstan and Russia have agreed to invest $23 billion to develop the Kurmangazy field in the Caspian Sea, which may hold enough recoverable oil reserves to supply the US for a year. Rosneft and KazMunaiGaz, the Russian and Kazakh state-owned oil producers, would explore the field, which may have 1 billion tons (7.3 billion barrels) of oil. The partners have signed a 55-year production sharing agreement to develop the deposit. The article reports that Kazakh energy minister Vladimir Shkolnik said that Kazakhstan would ask Russia to allow France-based Total to join the project. The partners plan to explore the field for at least two years and spend another four years developing it. (Source: EIN News, 7 July, 2005)
V. Additional Resources
Previous updates and related reports can be found on BIC’s website on the Kazakhstan page. These reports are available in English and in Russian.