Kazakhstan and China eye $200 million joint investment fund
Kazakhstan and China plan to establish a joint direct investment fund with up to $200 million in capital. The announcement came after a meeting between Kazakhstan’s Minister of National Economy Serik Zhumangarin and China’s Minister of Finance Lan Fo’an. The two officials held talks on the sidelines of the 2nd Tien Shan Forum for Central Asia Economic Cooperation.
According to the Kazakhstani government’s press service, Kazakhstan first proposed the initiative at a high-level meeting in Shanghai in July as a way to support the development of the Trans-Caspian International Transport Route (TITR). The proposal sets the fund’s initial target size at up to $200 million, with the possibility of further expansion.
To speed up the fund’s launch, Zhumangarin also proposed identifying financial institutions from both countries that would develop a common approach to its operations.
«For practical steps toward financing our projects, we need to build a comprehensive Kazakh-Chinese financial architecture. We are currently developing several complementary mechanisms, each designed to address specific objectives,» he said.
These mechanisms include the Kazakh Invest Fund, which involves Silk Road Finance Corporation; a Kazakh-Chinese private equity fund backed by the national holding company Baiterek and the Silk Road Fund; and financing mechanisms supported by Baiterek, the Development Bank of Kazakhstan, China Development Bank, China EximBank, Bank of China, ICBC and Sinosure, among others.
«I propose consolidating existing and emerging mechanisms through a unified Kazakh-Chinese ‘window’ for project financing and insurance, without the need to establish a new organization. This would enable the creation of a comprehensive financial package for each priority project encompassing long-term lending, insurance coverage, guarantees, financing in Chinese yuan, and, where necessary, equity participation,» Zhumangarin said.
To test the proposed mechanism, the two sides will select several pilot projects and support them at every stage, from the initial investment decision to financial close. This process will help identify and remove systemic barriers that currently delay major investment projects.
The two sides also discussed expanding cooperation with China’s Exim Bank to finance priority infrastructure projects. Kazakhstan is currently working on several strategically important initiatives to develop its transport and utility infrastructure.
