Monochrome by Centil Law: Soft and tender

Actions speak louder than words and this week in Central Asia, lots of actions, some decisive, some more soft and tender were taken across the board.

Kazakh investor Pioneer Capital Invest LLP acquired the Asian-Pacific Bank from the Central Bank of Russia, beating Promsvyazbank and Sovcombank amongst its other competitors with the best offer in an auction, standing at approximately $193m. Under the terms of the tender, Pioneer will transfer a part of APB's net profit for the first 9 months of 2021 to the CBR by 30 November.

The Saudi firm ACWA Power won the tender for the construction of a 100MW wind-power station in Karakalpakstan by 2023, beating its main competitors UAE’s Masdar and French Voltalia with the tariff of $0.0257 per kWh. Ultimately, ACWA intends to build a 1GW wind park to contribute to the Uzbek government’s new target to generate 5GW from wind energy by 2030, instead of 3GW as set in 2020.

The Ukrainian company Lekkhim plans to build a pharmaceuticals production facility in Tashkent by 2023. The firm already invested $2.5m and was granted permission for 3 ha of land plot for this purpose. It expects to spend another $10 to $12m during the first stage of construction. Lekkhim also intends to request the EBRD to finance up to 30% of the $40m estimated total cost of the project.

Local investment and participation is softly encouraged in both Kazakhstan and Uzbekistan. First, following last week's announcement, further details on ETFs appeared as the Ministry of Finance of Uzbekistan applied for the registration of the first ETF of $100,000, although more details are yet to follow. In parallel, a five-year social bond of approximately $250,000 will be listed on the KASE with a 11.9% rate.

IFC invests $75m in one of Uzbekistan’s major lenders Uzpromstroybank to encourage loan financing for local SMEs, as well as boost climate finance and green banking programs. The funding will be structured as an Uzbek Soum-denominated loan to provide access to long-term local currency funding to the bank. The process of privatisation of Uzpromstroybank is expected to finalise by 2023.

President Tokayev and the Vice President of Germany’s Linde Group discussed opportunities for engagement in the field of gas and chemistry. In 2020, Linde Group implemented the second stage of the largest oxygen, nitrogen and argon production facility in the CIS in the Kazakh city of Temirtau. Now the company plans to construct a gas processing plant in the city of Zhanaozen.

Uzbekistan-based VC fund Semurg VC agreed to invest $120,000m into Micros24, a fintech startup that facilitates digitisation of small businesses. Micros24 participated in the third wave of Tashkent’s IT Park acceleration program. The startup intends to use the funds to launch a multibank service that will replace internet banking, as well as to expand its R&D and marketing capacities.

The company connected to Nurali Aliev, grandson of Nursultan Nazarbayev, Unit Telecom purchased a 75% stake of the telecoms company TransTelecom, while the remaining 25% are held by the national railway company KTZh. TransTelecom’s total assets were worth over $400m, liabilities amounted to over $336m and the net revenue in 2020 reached $9m.

Tajikistan hosted a series of multilateral meetings: the SCO Summit, the CSTO meeting and the Pakistan-Tajikistan Business Forum, as part of Pakistan's regional enhancement program. While the developments in Afghanistan remain a hot topic in the region, the leaders call for cooperation. Iran now becomes a full SCO member, while Dialogue Partner status is granted to Egypt, Qatar and Saudi Arabia within the SCO.

Turkmenistan and Uzbekistan discussed the format of cooperation for the use of shared water resources of the Amu Darya River and for better operation of water facilities in both countries. Parties met in Tashkent, as part of the first meeting of the Joint Turkmen-Uzbek intergovernmental commission on water issues. Looking for a soft-touch approach to prevent potential clashes for the key resource in the landlocked region.

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