Tag Archives: IFI

Chinese institution to fund road projects in Kazakhstan and Tajikistan

APRIL 19 2016 (The Conway Bulletin) – The AIIB, a China-backed international financial institution, said it would fund road projects in Tajikistan and Kazakhstan. According to unnamed sources quoted in the FT, the AIIB will join an EBRD-funded road project in Dushanbe and a World Bank and EBRD-backed ring road project in Almaty. The AIIB has said it is keen to fund infrastructure upgrades within its Silk Road project.

ENDS

(News report from Issue No. 277, published on April 22 2016)

ADB says that Turkmenistan’s TAPI pipeline is ‘doable’

APRIL 8 2016 (The Conway Bulletin) – The Asian Development Bank (ADB) said it will support infrastructure projects in Turkmenistan, including the $10b TAPI gas pipeline and also rail and electricity links to neighbouring countries.

Over the next two years, the ADB plans to invest around $1b on construction of railway corridors and the production and supply of electricity.

On TAPI, the pipeline that should, if all goes to plan, pump Turkmen gas to India through Afghanistan and Pakistan by 2019, the ADB delivered a determined, positive endorsement.

“We’re going through some of the toughest territory in Afghanistan, so the challenge is there. There’s no doubt about it,” Sean O’Sullivan, director for Central Asia at the ADB, told Reuters the day after a $200m investment deal was signed for TAPI between its key shareholders — Turkmenistan, Afghanistan, Pakistan and India.

“But I am sure it’s doable.”

The ADB has been a staunch defender of the TAPI pipeline, which many analysts have said is too complicated to pull off successfully, and advised the partners on the financing of the $10b project.

Previously, the ADB pulled funding from the Turkmenistan-Afghanistan-Tajikistan railway link, because of security concerns. Now, by saying that TAPI is “doable”, Mr O’Sullivan is effectively giving the ADB’s endorsement to the project, despite ongoing doubts on security guarantees.

In the meantime, construction work continued on TAPI, with Turkmen officials triumphantly announced that they had finished welding the first kilometre of the pipeline.

The other countries have reportedly started construction work too.

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(News report from Issue No. 276, published on April 15 2016)

Azerbaijan’s SOCAR applies to ADB for Shah Deniz loan

MARCH 28 2016 (The Conway Bulletin) – Azerbaijan’s state-owned energy company SOCAR said it applied for a $450m loan from the Asian Development Bank (ADB) to help pay for the expansion of its Shah Deniz gas project.

The loan, according to both ADB and SOCAR, is aimed at financing the second phase of the project, which the company plans to bring online by 2018. Shah Deniz is core to Azerbaijan’s future gas plans.

BP, which develops the field together with SOCAR, said the expansion of the Shah Deniz project will cost around $28b and will add 16b cubic metres annually to the current production of around 10b cubic metres.

Gas produced at Shah Deniz 2 is already booked for export to Georgia and Turkey in 2018 and further on to Europe by 2019, with the completion of the Southern Gas Corridor.

Unnamed ADB sources told Natural Gas Europe: “It is in the processing stage. Once approved, the loan will be provided under the state guarantees.”

There was no information on the timeline of the loan.

SOCAR, hit by sustained low oil prices, has applied to various sources for financing and has sought to divest from some of its unprofitable ventures to raise cash for its core projects.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Carrefour extends its presence in Georgia

MARCH 17 2016 (The Conway Bulletin) – The EBRD said it extended a $39.5m credit line to Majid Al Futtaim, the regional franchisee of French retailer Carrefour, to extend its presence in Georgia. Carrefour already has three stores in Georgia and said it wants to open new ones. Carrefour is also present in Armenia, where it owns one store, Tajikistan and also in Kazakhstan.

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(News report from Issue No. 272, published on March 18 2016)

Uzbekistan finishes railway

FEB. 25 2016 (The Conway Bulletin) – Uzbek officials said that work on a $1.63b railway section in the Fergana Valley had been completed, meaning that trains can now travel from Tashkent without having to pass through Tajikistan.

Although the cost of the 123km track is high, driven up by kilometres of tunnels and bridges that were needed to breach the mountainous terrain, for Uzbekistan cutting out the irritation of having to deal with Tajikistan makes it worth it.

Uzbekistan and Tajikistan have been at loggerheads since the breakup of the Soviet Union in 1991.

At its core, Uzbekistan worried about Tajik plans to build hydropower dams across rivers that feed Uzbekistan’s cotton crops. Tajikistan doesn’t like Uzbekistan’s unilateral stance.

This impacted rail traffic, which steadily dropped off.

The World Bank estimated the route will transport 600,000 people and 5 tonnes of freight every year. The project also underlines the financial might of China in the region. It paid $350m of the cost of the project, the World Bank paid $190m and the Uzbek government covered the rest.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Editorial: Uzbekistan’s railway

FEB. 26 2016 (The Conway Bulletin) – At 19.2km, the Kamchik Pass railway tunnel may be the longest in Central Asia and might also be a great engineering achievement, but it is also a sign of Uzbekistan’s further isolation from world politics and markets.

Uzbekistan said it completed a World Bank and China-backed railway bypass in the Ferghana Valley that will allow its trains to run to the east of the country without having to transit through Tajikistan.

The World Bank support is important because it shows international endorsement for a mega project that Uzbekistan was eager to achieve despite the economic downturn rolling through Central Asia.

Chinese money and workers were key to the success of the project, as China has growing interest in building infrastructure in Central Asia to support its ambitious project to connect with Europe via rail and road.

Tajikistan is the main loser in this game. It will no longer receive the in- kind payment of $25m worth of gas shipments from Uzbekistan in exchange for the railway transit. And it also lost an important diplomatic chip in its endless row with Tashkent.

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(Editorial from Issue No. 269, published on Feb. 26 2016)

EBRD finances Kazakh road

FEB. 18 2016 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) said it is giving Kazavtozhol a $103m loan to widen an 80km stretch of road in southern Kazakhstan on the main south-north highway. The EBRD has been an important driver of infrastructure projects in former Soviet Central Asia since the collapse of the USSR in 1991.

ENDS

(News report from Issue No. 268, published on Feb. 19 2016)

IMF draws funding plan for Tajik Rogun

FEB. 4 2016 (The Conway Bulletin) – IMF representatives met with Tajik government officials in Dushanbe to draw up funding plans for the $2b Rogun hydropower plant. The IMF has said that the World Bank-backed Rogun project, strengthening its banking sector and diversifying the economy are priorities for Tajikistan. Down- stream Uzbekistan has lobbied hard against the Rogun dam.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

EBRD funds power plant in Kazakhstan

JAN. 31 2016 (The Conway Bulletin) — The EBRD sent a $5.9m loan to Sagat Energy for the completion of a combined gas and heat electric power plant in Atyrau, western Kazakhstan. The plant will have a capacity of 11 MW.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

IMF flies to Azerbaijan for talks on $4b loan

JAN. 27 2016, BAKU (The Conway Bulletin) — An IMF delegation flew to Baku for meetings with Azerbaijan’s government over a potential loan to buffer it against a financial storm that now threatens to seriously damage its economy.

The FT newspaper reported that the the loan could hit $4b, although an IMF statement later dodged giving specific numbers.

“An IMF team will be in Baku during Jan. 28 – Feb. 4 for a fact- finding staff visit at the authorities’ request. The team will discuss areas for technical assistance and assess possible financing needs,” it said in a statement.

Azerbaijan’s finance minister, Samir Sharifov, though, played down reports of a loan.

He instead said that Azerbaijan was going to raise $2b by selling debt for the Southern Caucasus Gas Corridor Company, which manages various pipelines, and pipeline projects, running from the Caspian Sea to Europe.

“There is no urgent need for a loan, but we can raise loans to support the economy amid low oil prices,” Mr Sharifov told journalists in Baku of talks with the IMF.

If Azerbaijan did take an IMF loan it would be the first emergency loan given to a sovereign state during this current financial downturn. Taking an IMF loan would also dent Azerbaijan’s pride. Fuelled by high oil prices its economy has boomed over the past 15 years. The government has invested heavily in promoting its reputation as a bridge between the East and West, building grandiose towers and sponsoring major sports events.

But the government has failed to shift Azerbaijan from a petro-econ- omy to a more dynamic economy with several income streams. Instead, Azerbaijan still receives around 95% of its export revenue from oil sales.

And with oil prices at around 12- year-lows this has begun to hurt.

The government has slashed spending, inflation is soaring and jobs are melting away. The manat currency has dropped a third in value in the past month and frustrated ordinary people are beginning to speak out and protest against the government.

A Conway Bulletin correspondent in Baku said people in the streets were increasingly referring to the current economic downturn as a “crisis”.

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(News report from Issue No. 265, published on Jan. 29 2016)