The region continues the careful balancing act between the East and West this week, with occasional gusts of activity coming from the North.
After last week's announcement of the "New Tashkent" megaproject, similar news came from Kazakhstan - Prime minister Smailov announced the FEZ G4 City in the Almaty region, a $8.1b investment project through 2048. The 30k hectare SEZ is expected to produce over $37.2b worth of goods and services, plus employ about 60k people, with key areas being a business centre, educational and medical hub, an innovative production and trade zone, and a tourist cluster.
Meanwhile, China shows another burst of activity in the region. A forum was held in Almaty as a part of an official visit of the Chinese Communist Party members to Kazakhstan. The parties signed a number of commercial agreements worth $565.4m in a variety of sectors including construction, energy, mining, agriculture, food processing, engineering and tourism.
At the same time, the Tajik Ministry of Transport also signed an agreement with China Road and Bridge Corporation on the construction of roads and bridges in GBAO. The total budget of the project is $31.2m with an implementation period of 30 months from the date of commencement. The project will cover the construction of a 3.4 km road in several rural areas, as well as the construction of a bridge in Khorog across the Gund River - 200 meters long with adjacent roads of 1.1 km long.
Meanwhile, Russia had to play its counterweight role to China in the region. Following the meeting of the intergovernmental Kyrgyz-Russian commission, a number of documents aimed at expanding cooperation were signed. An interesting item on the agenda was the joint construction of a nuclear power plant and a 300 MW solar power plant in the Issyk-Kul region. Still, the construction of the Kambar-Ata HPP-1 by the Russian side is as yet expecting progress.
Tashkent also ran its business with foreigners. This week, Khududgaztaminot, the state gas supply company, signed an agreement with the Italian Pietro Fiorentini to modernize and reconstruct the gas distribution system. The project is set to attract nearly €200m in financing from the Italian State Agency for Export-Import Financing SACE. This is another instance when Europeans are contributing to the utilities sector in Uzbekistan - in 2021 French Veolia took on the water supply modernisation project in the capital.
President Mirziyoyev approved another privatisation programme that will involve the sale of shares in 1,000 enterprises and IPOs of SOEs like NMMC, AGMC, Uzmetkombinat and others. The threefold approach to activities under the programme envisages the sale of state blocks of shares in 1,000 enterprises; a public auction for 1,000 properties; and the "people's IPO" of the state shares in 40 large enterprises and banks. Sound familiar?
IFIs also balanced activity in the region this week. One example was the EDB's plans to invest at least $400m in the water and energy complex of Central Asia over the next three years. The announcement comes in conjunction with the UN conference on water resources, which was also held this week. Based on its results, Kazakhstan, Tajikistan, Turkmenistan and Uzbekistan intend to adopt a joint statement, which will set up the basic principles of cooperation in the field.
For its part, the EBRD launched a $150m Kazakhstan Green Economy Financing Facility II to help businesses and households adopt environmentally sound practices. Financial institutions under the program will receive funds for on-lending to individuals, private sector companies, and SMEs to enable them to modernize production. Following GEFF Kazakhstan's disbursement of $30m and saving over 570 GWh in energy, the project drives on the bank's green agenda to encourage modernisation and energy transition.
Balancing out, IFC committed $150m and raised over $1b in private financing to build a TPP in Uzbekistan. The 1,580 MW plant will run on gas and is expected to cover 17% of electricity demand across the country. The facility will be developed by a consortium that includes Electricité De France, Qatari Nebras Power, and Japanese Sojitz Corporation and Kyuden International. Co-financing of $655m came from the Japan Bank for International Cooperation and the Japan Export and Investment Insurance Agency.
Balancing on the verge of sanity is another megacity project, this time in Turkmenistan. Named Arkadag in honour of Berdimukhamedov Sr, the city is located 30 km out of the capital, and will have a price tag of $5bn, with the first phase already completed at $3.3bn, and the second estimated $1.5bn, but which officials say is yet to be confirmed. Serdar Berdimukhamedov, who replaced his dad as president in 2022, will also need to ensure that the city honours his father's wish for the city to somehow enter the Guinness Book of World Records.
Wrapping up, here comes the announcement of this year's iteration of the Tashkent International Investment Forum to be held in late April.