Tag Archives: business

EBRD gives loan to Armenian bank

DEC. 15 2016 (The Conway Bulletin) — The EBRD sent a $10m loan to Ameriabank, Armenia’s largest bank by assets, to promote credit to women-led small and medium enterprises. The EBRD also sent a $3b loan to ACBA-Credit Agricole Bank, one of the largest lenders to Armenia’s agriculture sector. The loan is part of the EBRD’s Women in Business programme, which includes Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Georgia Global Utilities issues 30m lari bond

TBILISI, DEC. 12 2016 (The Conway Bulletin) — Georgia Global Utilities (GGU), a subsidiary of London-listed BGEO Group, issued a 30m lari ($12m) bond, giving investors the chance to take a punt on the lari.

The bond, destined to GGU’s subsidiary Georgian Water and Power, offers a 3.5% premium over the Central Bank’s lari refinancing rate and will mature in five years.

The lari has slid by 15% in the past three months against the US dollar and is now trading at 2.66/$1. This prompted the Central Bank to stop easing its monetary policy and to keep interest rates stable at 6.5%.

Despite the fall in the value of the lari, BGEO was bullish about the issue. “This is in line with GGU’s funding strategy to continue to raise new funding in local currency, with longer-term maturity,” Irakli Gilauri, BGEO’s CEO, said in a statement.

Georgian Water and Power, which supplies water to Tbilisi, Mtskheta and Rustavi, was privatised in 2008. The sale was criticised because of a perceived lack of transparency over GGU’s British Virgin Islands registration.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Russia argues with Georgia over gas

DEC. 15 2016 (The Conway Bulletin) — At a meeting in Vienna on Dec. 13, Gazprom chiefs told Georgia that a long-standing deal by which it could take a 10% chunk of gas that Russia exports to Armenia via Georgian territory should be scrapped, Georgian energy minister Kakha Kaladze told media. The two sides held similar negotiations last year. Russia wants the gas deals to move onto a monetised basis, Georgia wants to swap deal to remain. Last year a swap deal was retained.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Stock market: OPEC

DEC. 16 2016 (The Conway Bulletin) — The collapse in oil prices since 2014 has hit the economies of Central Asia and the South Caucasus. Every now and then, though, a new touted solution emerges, be it maximising oil output to earn as much as possible or freezing output and waiting for sunnier days.

Both Azerbaijan and Kazakhstan, the main producers in our region, have played with the idea of “freezing” oil production, although this is more a reflection of a drop in production at aging oil fields rather than a conscious choice. An agreement reached between members of OPEC and other producers seems to have solved the headache in the medium-term. The parties pledged to cut output, forcing prices up.

This measure, however, lasted just a few days.

After the US Federal Reserve raised interest rates for the first time in one year on Wednesday, the US dollar soared against all commodities, cancelling out the progress made after the OPEC-sponsored meeting.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Oil platform collapses in Azerbaijani sector of the Caspian Sea, 1 oil worker killed and 9 missing

DEC. 15 2016 (The Conway Bulletin) — Nine oil workers were missing after an oil rig partially collapsed during a storm in the Azerbaijani sector of the Caspian Sea that killed at least one person, Azerbaijan’s state energy company SOCAR said.

The collapse came almost exactly a year after a fire on two Azerbaijani oil platforms killed 30 oil workers in the worst offshore accident in the energy sector since 167 people died in the Piper Alpha fire in the North Sea in 1988.

The latest accident will embarrass SOCAR and Azerbaijan’s oil sector because it had promised to improve safety after the deaths in 2015.

Much of the infrastructure that SOCAR uses in the Caspian Sea is decades old and Azerbaijan has been heavily criticised for not updating and modernising its structures.

The oil industry is also vital to the Azerbaijani economy. It has been under pressure to maintain oil output despite the aging infrastructure and aging fields.

SOCAR officials said that emergency services are still looking for the nine missing oil workers.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Power production rises in Kyrgyzstan

DEC. 14 2016 (The Conway Bulletin) — Electricity production in Kyrgyzstan was 2.5% higher in the first 10 months of the year compared to 2015, media quoted the statistics committee as saying. This is important for Kyrgyzstan because electricity, generated by its extensive hydropower system, is its main export. It is investing in the so-called CASA-1000 project to send electricity to Pakistan via Afghanistan.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Tajik Banks

DEC. 16 2016 (The Conway Bulletin) — News that Tojiksodirotbank had resumed banking activities might have been a relief for its many customers, but it’s still keeping the Central Bank’s officials on the edge of their seats.

Injecting around $500m, as it did to save Tojiksodirotbank from going bankrupt, into the banking system was not a joke for the Tajik government. It is struggling to keep its somoni currency afloat against a strengthening US dollar and has faced a severe downturn in remittances from migrant workers, an important part of Tajikistan’s economy.

Tajikistan is one of the world’s most remittance-dependent countries. Transfers from workers abroad accounted for around half of the country’s GDP a few years ago.

Now, the picture might be different. The Central Bank has blamed the liquidity crisis in the banking sector on the shrinking remittances, projected to decrease again this year. In two years, between 2014-2015, remittances had fallen by 47% from $3.9b.

The combination of these events put increasingly pressure on the banking sector, which risked default earlier this year. The government intervention seems to have plugged the main hole, but the crisis is far from over.

With the bailout, the government inherited the banks’ shaky credit portfolio. For regular people, the pressure on the economy has made it increasingly difficult to pay back their debt. In addition, several state-owned companies that had borrowed heavily in previous years have started to show signs of insolvency.

The government knows well enough that it is simply not in a position to bail out its entire economy.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Turkmenistan proposes discounts for airlines

DEC. 12 2016 (The Conway Bulletin) — In a move designed to increase its competitiveness for the lucrative trans-asia aviation market, Turkmenistan is offering large discounts to airlines that stop at its airport near Ashgabat, media reported. Uzbekistan and Kazakhstan have also tried to position themselves to attract international airlines flying from Europe to East Asia. Earlier this year, Turkmenistan unveiled a new terminal building.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Russia to start sending more oil to China via Kazakhstan

ALMATY, DEC. 15 2016 (The Conway Bulletin) — Russia will increase oil shipments to China via Kazakhstan by 28.5% in 2017, giving Kazakhstan’s income a much-needed boost from transit fees.

The deal also comes a few days after Russian state-owned Transneft said that it would stop taking Kazakh oil at the Caspian Sea port of Makhachkala because the consistency of its blend had changed.

Rosneft, Russia’s state-owned giant, will export 9m tonnes/year to China via the Kazakhstan-China pipeline, up from the current 7m tonnes/year, according to traders interviewed by Reuters. The pipeline, with a capacity of around 15m tonnes/year, has been utilised below capacity for years since its completion in 2009.

Russia needs to increase its export capacity to China to fulfil contracts signed in 2013. New pipelines are being built in Siberia to send Russian gas directly to China but, for now, it still needs to use Kazakhstan’s infrastructure.

The actual value of the deal has not been revealed but it will be a boost for Kazakhstan which has been struggling economically since oil prices collapsed in 2014.

This was some positive news for KazTransOil, a few days after Transneft said it would stop accepting Kazakh oil at its Caspian port of Makhachkala, citing incompatibility with the Ural blend. KazTransOil will re-route its exports to Russia via the Atyrau-Samara pipeline from Jan. 1, 2017. This is a route that KazTransOil already uses to export some oil.

The Transneft decision came after Lukoil, Dragon Oil and Mitro International decided to pull out of Makhachkala and re-route exports to the Baku-Tbilisi-Ceyhan pipeline.

The Kazakh crude, Transneft said, is not sulphurous enough to be blended with Russian oil.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

EBRD loans 100m euro to Kazakhstan

DEC. 12 2016 (The Conway Bulletin) — The EBRD agreed a €100m ($104m) loan to state-owned electricity company Samruk Energo, specifically designed to help with its privatisation plan. The company, a subsidiary of sovereign wealth fund Samruk-Kazyna, plans to privatise nine of its subsidiaries next year. The loan will be issued in tenge or roubles.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f