Monochrome by Centil Law: Take care of pennies

As the money keeps flowing to assist economies and speed up recovery, one may be cautious to care for the pennies, so the pounds take care of themselves should the global economy tumble again as some predict. This works well in theory, but...

With 18.72% of shares already in free float, Samruk-Kazyna floated another 6.28% in Kazatomprom for a total of $206m. Of them, 0.01% of the world’s largest uranium producer was exclusively listed on AIX at the same unitary price of $13. Samruk retained the remaining 75%. Upon Nazarbayev’s orders last year, all proceeds should be transferred to Samruk to reduce its external debt.

All this while the country considers borrowing an additional €917m from the Asian Development Bank for its anti-crisis budget. The preliminary terms stipulate that the loan would be issued at a +0.50% Euribor rate and a yearly -0.15% reservation commission on the unspent balance. Half of the sum would be issued for 10 years, whilst €459m - for 5 years, with 3 years grace periods in both cases.

Uzbekistan’s Ipoteka-Bank received a $10m trade finance-guarantee package from the International Finance Corporation under its Global Trade Finance Program to finance import and export activities. Earlier, the European Bank for Reconstruction and Development extended $220m to Ipoteka-Bank, Asaka, UzPSB and NBU for the same purpose.

The EBRD, the EU and the European Investment Bank will pitch in €2m, €5m and €3m in loans, respectively, to Kyrgyzstan to finance better solid waste management and new infrastructure in Osh and its municipalities. EBRD’s Shareholder Special Fund and the Early Transition Countries Fund also granted additional €0.95m for engineering support.

Tajikistan gets more funding, with USAID and the Aga Khan Foundation committing to transfer $2.6m over the year to support the country’s COVID-19 response. Moreover, the EU granted €80,000 to help Tajikistan in mediating the consequences of the May floods, which destroyed crops and settlements. The UN FAO also contributed $40,000 to the most affected farmers.

Kazakhstan lifted the wheat and flour export quotas introduced in March. This caused discontent amongst the affected stakeholders, who calculated the opportunity cost at an average of $150m in sales during the two past months. What is more, traders incurred a 15% loss to refund the contracts concluded before the decree, given the new rate, whilst many flour millers had to interrupt production. 

Compare this with the prognosis from the World Bank that highlights the potential of the agricultural sector in restoring Central Asian economies from the slowdown caused by COVID-19. With 40% of the population across the region living in rural areas, they recommend states to invest in sector development programs, including better cattle maintenance and increased intra-regional trade.

Uzbekistan launched tenders for the construction of three hydropower plants in the southeast of the country, as part of the state-led low-carbon energy strategy, which includes generating 1.5GW from hydropower. The ADB will assist the management of the bidding process, which will last until 31 July. Only companies from ADB member states with an annual turnover of above $30m will be considered. 

LUKOIL and Uzbekneftegaz announced the launch of a new joint venture to collaborate on geological exploration and natural gas extraction, against the backdrop of a 40% decrease in gas production since February due to low demand in China. According to the Uzbek party, three potentially commercially viable blocks are already being studied by LUKOIL experts in the Kyzylkum desert.

Turkmenistan prepares to receive a delegation from the WHO in the upcoming weeks. This will be the WHO’s second attempt to assess the COVID-19 situation on the ground, as the Turkmen leadership continues to insist on having no cases of infected patients. The delegation’s visit was initially scheduled to be organised in May, right after its mission in Tajikistan, but was postponed in the end.

As lockdown restrictions ease around the globe, many are eager find new opportunities in the post COVID-19 world. If their gaze falls on Central Asia, be sure to let them know that they should use this newsletter as a first step, by subscribing here, and talking to us to find out more.

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