ALMATY, KAZAKHSTAN, November 9, 1998 --- The International Finance Corporation today signed financing agreements for a US$900,000 loan and an equity investment of $250,000 to help the Kazakhstan Construction Company (KCC) to improve the quality of its products and expand its production to meet the growing local demand for construction materials.
Kazakhstan, the largest country in Central Asia, has attracted $3.5 billion in foreign direct investment, primarily due to its huge oil reserves. The commercial activity has led to strong demand for construction of new office and residential buildings in Almaty, the country's business center. In parallel, the relocation of the capital from Almaty to Akmola means that there is a construction boom in that city too.
KCC will undertake a $2.6 million project to renovate existing machinery, equipment, and buildings and install new machinery and equipment. The project will also expand the company's existing production line for concrete slabs, pavement blocks, and hollow blocks.
IFC will help modernize KCC by introducing new management and technical practices, including accounting and information systems. As part of the project, KCC will adopt international standards and establish environmental standards that meet local and World Bank guidelines.
The financing agreements were signed in Almaty by Mr. Maulen Maratbekov, General Director of Kazakhstan Construction Company and Mr. Jemal-ud-din Kassum, IFC Vice President of Investment Operations.
Mr. Kassum said the project will benefit the economy of Kazakhstan through employment of about 90 construction workers, the fuller use of underemployed land and buildings, and lower prices for the company's products. He said it would also spawn small and medium sized enterprises, which the Government of Kazakstan and IFC have set as a priority.
As of June 30, 1998, IFC's investment portfolio in Kazakhstan amounted to $124.1 million. In the fiscal year ending in June, IFC approved $93.27 million for six projects in Kazakhstan.
The project is a part of the "Extending IFC's Reach" initiative, a three-year pilot program that promotes private investment in countries where difficult conditions have hampered investment. IFC, part of the World Bank Group, fosters growth in the developing world and in emerging economies by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
