Monochrome by Centil: Arm-wrestling

It seems that the region continues to act as a platform for battles of interests between the EU and Russia. So far, this competition is favouring the Stans.

It's been an intensive week for Tokaev - as his team participated in the Kazakhstan-UAE investment roundtable that included top officials and business leaders. The President also met Sheikh Al Nahyan, a member of Abu Dhabi's ruling family, and invited the Sheikh's companies to implement projects as part of a joint declaration to establish strategic investment projects. Kazakhstan also welcomed the intention of the Emirati Masdar to build a wind farm in Kazakhstan.

Interesting news hinting at a thaw in relations with Russia was the signing of a road map for gas supplies and processing between Kazakhstan and Gazprom. The document provides for the possibility of supplying Russian gas to northern Kazakhstan. Negotiations involved the first vice PM of Kazakhstan and the head of Gazprom. The parties discussed joint work on the modernization of the gas transmission system, gasification of the northern and eastern regions of the country and the transit of Russian fuel to third countries.

Russian activity in relations with the regions’ two largest energy resource owners became even more obvious in the framework of the Turkmen-Russian business forum where agreements were signed for almost $2.2b, including the implementation of projects to upgrade the rolling stock of the Turkmen railways, freight cars and equipment. The forum was attended by more than 300 representatives of state organizations and private companies, including representatives of Putin’s administration and the State Duma of the Federal Assembly.

Another indirect common ground between Kazakhstan and Turkmenistan was the activity of the EBRD. In Kazakhstan, the bank announced that it will support the creation of a legal framework for cross-border, over-the-counter derivatives and repurchase agreements to hedge currency exchange and interest rates. Upon amendments to the Civil Code and a number of key laws, the country's enterprises will be able to trade securities, such as derivatives, outside of official exchanges and without the supervision of a currency regulator.

In Turkmenistan, the bank announced its readiness to consider the possibility of expanding its activities in the areas of infrastructure and financial institutions. The EBRD country office also stated that one of the main directions should be investing in the further development of export-oriented enterprises through financial and advisory support, which should lead to diversification of economic activities and an increase in the inflow of hard currency into the country.

The EBRD's expansion was also felt in Uzbekistan, where the bank is considering loan initiatives for new photovoltaic plants with a total capacity of 897 MW. The projects will be implemented by Masdar, whose subsidiaries acting as a client will be allocated up to $200.5m. Thus, the EBRD plans to allocate up to $67mfor the construction of the largest of the three power plants in Surkhandarya. In addition, it’s also considering the possibility to cover VAT on the project worth $38.5m.

However, Tashkent pulled off an even bigger deal with Singapore, where President Mirziyoyev went on a government visit this week. During the trip, the president took part in a business forum where the enterprises of the two countries signed 23 investment, trade and financial agreements worth almost $5b. The event was attended by top managers of such companies as Indorama, Meinhardt Group, Changi Airports, CPG and others. The president also promised to provide incentives and infrastructure for Singaporean investors in Uzbekistan.

Among the above-mentioned agreements, possibly the most notable one was the agreement on the establishment of the Uzbek-Singapore Investment Company with an authorized capital of $500m to expand mutual trade. Herewith, Tashkent is also planning to involve Singaporean companies in the privatization of state-owned enterprises in Uzbekistan and create a joint fund for their transformation. Another topic of discussion was the introduction of advanced solutions in the areas of digitalization and green development.

Dushanbe also boasted a fairly large deal, which signed four grant agreements with the International Development Association amounting $116.5m. The agreements included the financing of the structure and business basis of the Rogun HPP project; a project to support the policy of stable and sustainable development of Tajikistan; and a project on sustainable agriculture. The fourth agreement was the contract on the advance payment for the project preparation on construction of a private solar power plant in the Sughd region.

In turn, Bishkek focused on the development of the tourism sector - a number of projects were presented in the Cabinet of Ministers of the country to strengthen the sector. In particular, the Tourism Development Support Fund of Kyrgyzstan presented a project for the development of a network of sanatorium and resort facilities for $960 million consisting of 32 units. Following the meeting, the head of the Cabinet instructed the relevant state bodies and local authorities to further develop the presented projects.