1. Kazakhstan’s Economic Overview and ADB Operations 03 September 2017
Giovanni Capannelli
Country Director, Kazakhstan Resident Mission
Asian Development Bank /

2. Key Economic Indicators
 Kazakhstan
2014
2015
2016
2017 (project.)*
GDP growth (%)
4.4
1.2
1.0
3.0
Inflation (%)
6.7
6.6
8.5
 8.0
Current account
($ bln)
 6.0
 -5.8
-6.4 
-3.4 
Exchange rate USD/KZT, average
179.3
222.8
337.9
330
Oil Brent $/brl 99
52.4
44.0
50-60
*ADB estimates.

4. An Economy that Follows Oil
Exchange rate
Economic growth

5. Medium/Long Term Growth Drivers
Economic diversification agriculture, manufacturing, services/renewables
Structural reforms governance, civil service, human capital development, privatization, competition, deregulation
Private sector development targeted 50% contribution of SMEs to GDP by 2050
Trade expansion EAEU, BRI, regional connectivity, economic corridors, etc.

6. National Development Strategy
Kazakhstan 2050 Strategy
To become one of the 30 most advanced economies in the world.
Medium-Term Strategy: Third Modernization of KAZ
Accelerate technological upgrading and digitalization.
Improve business environment and expand the private sector.
Stabilize the macroeconomic environment.
Enhance the quality of human capital.
Support institutional change, ensure security, and continue the fight against corruption.
Green Economy Concept
Increase renewable energy generation; promote energy efficiency; and decrease CO2 emissions.
Reflect SDG targets, COP21 commitments, and other global obligations in government strategies and plans. 6

7. Less State in the Economy
Privatization of over 780 companies
Reducing the state’s share in the economy to 15% of GDP by 2020
Strengthening “Yellow pages” principles (limit government’s share in private sector)
Transformation of Samruk Kazyna into efficient company with high-level corporate standards (215 companies planned for privatization)
Improve efficiency of KazAgro and Baiterek and limit their operations in private sector

8. FDI Flows to Kazakhstan, 2005-2016
Source: NBK
As of December 2015, total foreign investment in Kazakhstan reached $198.5 billion, of which $125.1 billion were net FDI
FDI structure by sector
Natural-resource based sectors (mining, geological exploration)
61%
Manufacturing industry
12%
Financial and insurance services, wholesale trade, construction
27%

9. Opportunities and Challenges for FDI in Kazakhstan
Natural resources
New strategy for renewable energy
Labor market
Favorable business environment
Eurasian Economic Union / Belt and Road Initiative
Challenges
Political risk
Governance, bureaucracy
Global and regional competitiveness
Rule of law
Institutional coordination

10. Asian Development Bank
Founded in 1966
67 members
48 in Asia-Pacific
19 outside the region
Lending 2016: $31.7 Bn - Energy: $10.4 Bn - CW Asia: $8.2 Bn
TA Grant 2016: $320 Ml
KAZ joined in Astana office (1999) - Almaty office (1997)

11. ADB Strategic Priorities
Inclusive Growth
Environmentally Sustainable Growth
Regional Integration

12. Energy Priorities and Trends
Sustainable energy and low carbon development
Accelerate clean energy development
Maximize access to energy for all
Promote policy reforms in the energy sector to support low carbon development
Increasing energy sector lending
$16 billion pipeline ( )

13. Clean Energy Projects Solar and Wind Hydropower
Concentrated Solar Thermal Power
Solar Rooftop Program
Solar-Wind-Diesel Hybrid
Off-grid Prepaid Solar Photovoltaic

14. ADB Operations in Kazakhstan
During Kazakhstan received a total of:
30 sovereign loans ($5 billion)
8 private sector loans ($455million)
85 technical assistance projects ($37million)
Key Sector of ADB operations
Transport
Finance
Agriculture and irrigation
Water Supply and Sanitation
Energy

15. ADB 2017-2021 KAZ Partnership Strategy
Support economically diversified, socially inclusive, and environmentally sustainable growth
Strategic Pillar 3:
Sustainable Growth
Strategic Pillar 2:
Inclusive Development
Strategic Pillar 1: Econ. Diversification
Promote energy efficiency and the use of renewables; support adaptation and mitigation efforts to foster green growth and lessen the vulnerabilities associated to climate change
Address infrastructure bottlenecks, support service delivery across the country, and strengthen governance and institutions to reduce spatial inequalities and improve the quality of life
Improve access to finance and promote private sector development to enhance competitiveness and support the production of tradable goods and services
Cross-cutting priorities: Macroeconomic Resilience, Regional Cooperation and Integration, Support to Project Finance and Public-Private Partnerships, and Gender Mainstreaming 15

16. Energy Sector Priorities for KAZ
Expected Outcomes
Decreased energy intensity of GDP
Increased renewable energy generation
Reduced carbon dioxide emission levels
Areas of Assistance
Energy efficiency
Electrical power transmission
Air pollution reduction
Private sector operations and PPPs
Corporate governance reforms and privatization
Knowledge support, capacity development, and policy dialogue