EU-Kazakhstan ties praised as genuinely advantageous by EIB high-ranking official
Fresh Take:
Hey there! Let's chat about the €200 million loan agreement signed between EIB Global and the Development Bank of Kazakhstan. This Pathfinder deal, unveiled during the visit of EU Commissioner Josef Sikela to Kazakhstan, underscores the EU's deepening engagement with Central Asia.
According to Andrew McDowell, the EIB Global Director General, this partnership aligns perfectly with their mission—to finance win-win partnerships between the EU and countries globally. The funds will be used to support Kazakhstan's nationwide road rehabilitation program, primarily via KazAvtoZhol, the national road operator. This investment will enhance road connectivity and infrastructure quality, facilitating sustainable transport infrastructure development.
Part of this agreement will also fund 5,000 kilometers of roads linked to the Trans-Caspian International Transport Route (TITR), which connects China to European markets via Central Asia, the Caucasus, and the Caspian Sea. This marks the first tangible outcome of the four memorandums of understanding signed by EIB Global with the DBK and Central Asian countries at the EU-Central Asia Investors Forum in January 2024.
However, McDowell indicated that opportunities extend beyond roads. They see potential for cooperation in port and border-connectivity projects to ensure seamless trade, as these improvements can reduce freight transport times up to 12 days, providing an alternative to shipping and other transport routes. The EU has faced similar challenges, requiring investments not only in hard and physical infrastructure but also in technology, capacity building, customs processing, and data transfer.
The funding will also support projects aimed at expanding renewable energy sources and addressing climate change, aligning with Kazakhstan's net-zero goal of 2060 and the EU's climate targets. McDowell emphasized the potential for renewable energy collaboration, given the EU's industrial strengths in this area.
Furthermore, the EIB is interested in helping Kazakhstan build its local processing capacity for critical raw materials, particularly those essential for industries like the automobile sector in the transition to electric vehicles. McDowell highlighted that their expertise in exploration and extraction industries, combined with environmental and social considerations, is crucial to the long-term financial sustainability of these projects.
As we gear up for the EU-Central Asia summit in Samarkand, expectations are mounting. McDowell believes regional Central Asian cooperation with Europe has entered a new level of collaboration, reflecting the changed geopolitical context. He added that European leaders are also keen to diversify their partnerships, establishing a win-win partnership for both sides.
In conclusion, this loan agreement represents just the beginning of a broader potential partnership between Kazakhstan and the EU. Beyond financial investments, the EU aims to bring technological and capacity-building expertise to support Kazakhstan's economic diversification and sustainable development. Stay tuned for more updates on this exciting partnership!
additional insights:
- The European Investment Bank plans to support 100 billion euros in investment by 2027 and aims to contribute around a third of the EU's Global Gateway's total target.
- Trade between Kazakhstan and the EU reached $48.8 billion in 2024, accounting for almost half of the total foreign direct investments in the country.
- The EU plans to mobilize 55 billion euros for digital connectivity projects in Central Asia under the Global Gateway strategy.
- The EIB has provided loans to banks like Bank CenterCredit and Home Credit Bank Kazakhstan to stimulate green lending practices and support micro, small, and medium-sized enterprises.
- The EU is actively supporting green initiatives in Kazakhstan through the European Bank for Reconstruction and Development (EBRD).
- The €200 million loan agreement between EIB Global and the Development Bank of Kazakhstan aligns with the EU's mission to finance partnerships that aim for sustainability, as part of the funds will be used to support renewable energy projects in Kazakhstan.
- In addition to infrastructure development, the European Investment Bank is keen on supporting Kazakhstan's local processing capacity for critical raw materials, particularly those crucial for the automobile sector in the transition to electric vehicles, underlining their industrial strengths in environmental science and finance.
- The renewable energy collaboration between Kazakhstan and the EU is significant as it aligns with Kazakhstan's net-zero goal of 2060 and the EU's climate targets, aiding the transportation industry with greener alternatives for road networks and easing environmental concerns.
- By facilitating digital connectivity projects and green lending practices through investments in banks like Bank CenterCredit and Home Credit Bank Kazakhstan, the EU aims to shape Kazakhstan's environmental-science sector and support sustainable business growth for micro, small, and medium-sized enterprises.
