Monochrome by Centil Law: Actions

After announcing their anniversary Resolutions, the Central Asian Stans start switching to actions this week.

Kazakh PM Mamin announced the new National Action Plan implementing the state’s resolutions outlined in President Tokayev’s speech last week. The Concept of Public Finance Management was introduced for more efficient use of public finances, including fiscal policy, government debt and funds accumulated from oil revenues. The Plan also aims to raise the revenues from export of IT goods and services to $500m by 2025.

Uzbekistan’s Finance Minister announced the action plan for the development of the country’s capital markets for the next 12 months. These include the issuance of 15 IPOs, consisting of 5 state-banks, three insurance, three metallurgical companies, as well as gold ETFs, mortgage bonds and sukuk. The secondary market for state debt securities is also set for expansion, including the issuance of inflation linked bonds and the allowance for foreigners to encourage investment.

Kazakhstan’s largest microfinance organisation KMF placed two-year bonds on the Kazakhstan Stock Exchange and raised over $17m, at a coupon rate of 13% per annum with payments twice a year. The demand for the bonds reached 104.6%.KASE, with 58.7% of buyers being institutional investors, 23.2% brokerage firms, 5.5% private companies and 12.6% individuals. KMF now intends to widen its offering to ultimately raise $46.9m in total.

Uzbekistan and the Islamic Development Bank signed $1.2bn worth of agreements, including $200m for the modernisation of agroindustrial infrastructure, setting up a $100m Fund for economic cooperation, and various agreements with banks including Asaka and signing a $15m trading finance agreement with Trustbank. InfinBank and the Islamic Corporation for the Development of the Private sector also signed a $15m deal to support micro and SMEs.

One of Kazakhstan’s major electricity providers, Mangystau Regional Distribution Company secured a €9.5m loan from the European Bank for Reconstruction and Development. The funds will be aimed at increasing its resilience to foreign-exchange risks and macroeconomic uncertainty, as well as to support its current investment plan for 2025 and the integration of renewables into the national grid approved in 2018, the company’s first project with the EBRD.

The fintech bank Alif, operating in Tajikistan and Uzbekistan, raised $8m at a valuation of $100m, and attracted $50m in debt capital. The funding round will give Alif a chance to compete with fintech startups in the region and expand operations. The funds came from existing investor, Jefferson Capital Holdings Limited, a UK-based investment vehicle founded by Khofiz Shakhidi, a Tajik-born resident of Monaco.

Kyrgyzstan and the UAE consider taking joint action on energy projects. At the meeting of government and business representatives of two countries, parties agreed to sign a MOU for cooperation between the two Ministries of Energy. Having invested heavily in renewables in Uzbekistan, Masdar now considers investing in solar panels in Kyrgyzstan.

Action plans for Uzbekistan's pharma industry worth $1.25bn were presented to the President. The five-year action plan aims to increase the production volumes by three times to generate $376m from import substitution, and boost the export revenues to $84m. These projects include, amongst others, joint constructions of medicinal production facilities with Turkish, Indian, Czech and US partners worth $125.5m.

Iran eyes the prospect of full membership at the Shanghai Cooperation Organisation, with the hopes that joining a regional organisation led by Russia and China would help it expand its relations, and use them as leverage in the negotiations with the US and Europe. The Council of Heads of State is expected to make a decision regarding Iran’s admission to the SCO at the meeting in Dushanbe next week.

Former deputy of Kyrgyz Parliament, Iskhak Pirmatov, pleaded guilty with regards to his involvement in the Kumtor mine case, and entered a plea bargain, for which he was released from custody. Charged with corruption by the Pervomaisky District Court of Bishkek, Pirmatov is expected to pay a fine of $3,540. Allegedly, this is another step towards realising President Japarov’s plans on getting corrupt officials to pay up for corrupt practices, but perhaps also retain control over the country's largest asset.

Enough action-taking, let's switch to quiet contemplation for the weekend.