IFC To Invest $300 Million-$350 Million In Kazakhstan This Fiscal Year

Dec 09. Dow Jones

IFC To Invest $300 Million-$350 Million In Kazakhstan This Fiscal YearThe World Bank’s International Finance Corp. will maintain its investment in Kazakhstan of between $300 million and $350 million this fiscal year, with a significant portion earmarked for infrastructure, Tomasz Telma, IFC’s representative in Kazakhstan, said Wednesday.

Telma told Dow Jones Newswires that he hoped IFC “could do [invest] a quarter to a third of that amount in infrastructure,” including the country’s power sector, physical infrastructure such as roads, as well as municipal infrastructure.

IFC plans to decrease the share of its ongoing investment in Kazakhstan’s financial sector as access to private-sector funding is “getting a little bit better,” Telma said.

The institution has increased its investment in Kazakhstan over the past couple of years, raising it to $350 million in fiscal 2010, which started in July 2009 and ended in June this year, from $250 million fiscal 2009.

“I expect there’ll be a bit of a reallocation from the financial sector to other sectors and the overall amount will not increase beyond the $300 million-$ 350 million range,” Telma said of IFC’s investment plans in Kazakhstan for the current fiscal year.

He said that IFC would continue to look for investment opportunities in the financial sector and provide debt and trade finance to Kazakh banks.

Telma said that the financial sector isn’t in a severe crisis as it was before but that banks were still facing challenges finding opportunities to lend money.

“The banks are very liquid but in terms of the growth of their loan portfolios, it is very difficult to identify good projects,” he said. “The economy began to grow, which creates opportunities to start lending again but it’s very slow especially outside of oil and gas sector.”

In addition to slow pickup in lending, Telma said that Kazakh banks “still have very high nonperforming loans and how fast they are able to restructure or write them off will affect their medium-term prospects.”