Big American companies tapping investment opportunities in Kyrgyzstan

BISHKEK (TCA) — The State Committee for Industry, Energy and Subsoil Use of Kyrgyzstan and the American corporation General Electric have signed an agreement on mutual understanding to cooperate on projects related to the development of an efficient, sustainable and competitive industrial infrastructure of the Kyrgyz Republic using GE advanced technologies and solutions.

 

The agreement was signed at the Kyrgyzstan-US business forum held on July 11 in Bishkek as part of the visit of a trade mission of major American companies to Kyrgyzstan. During the forum, the US trade mission held B2B meetings with local companies and government agencies. The forum was organized by the State Investment and Export Promotion Agency under the Ministry of Economy of Kyrgyzstan and the US-Kyrgyz Business Council in conjunction with the American Chamber of Commerce in the Kyrgyz Republic (AmCham).

It was the first American trade mission in the history of bilateral relations to study Kyrgyzstan’s trade, economic and investment opportunities. There were big names among the visiting companies including Baker & McKenzie, General Electric, AGCO Corporation, AES, Coca-Cola, John Deere, American Councils for International Education, and others.

Cooperation in the energy sector

The agreement with GE provides for an analysis of the possibilities for construction, rehabilitation and modernization of the region’s hydropower capacities, as well as development of infrastructure for transmission and distribution of electricity. The potential of using digital technologies in existing and new hydroelectric power stations will be considered to improve the productivity and availability of HPP equipment, increase their service life and reliability, and optimize costs.

To exchange professional knowledge, the parties will consider the possibility of organizing technical conferences, seminars and forums jointly with the Kyrgyz State Technical University.

The parties will establish a joint working group responsible for the development of cooperation priorities and the implementation of the agreement terms.

GE technologies will help maximize Kyrgyzstan’s rich potential in the renewable energy and improve the reliability and efficiency of the energy system of Kyrgyzstan as a whole, CEO of GE for Central Asia & Azerbaijan Bela Ferenczi said.

Kyrgyzstan has an experience of work with American companies in the energy sector, but cooperation with GE now goes to a new level, Chairman of the Committee for Energy, Industry and Subsoil Use Duishenbek Zilaliev said. “I hope that following the results of the forum, the US companies will be interested in the CASA-1000 project, too,” he added.

GE equipment is already operating at the facilities of the country’s energy sector, in particular, at the At-Bashi and Kurpsai HPPs, as well as in the electricity transmission infrastructure. In the spring of 2017, GE won a tender for the reconstruction of the At-Bashi HPP in the Naryn province.

Zilaliev also suggested paying attention to renewable energy projects, which will be supported with the provision of preferences.

Investment and trade

In the first three months of 2017, the US FDI to Kyrgyzstan amounted to almost $13 million, which is a 10-fold growth compared to the same period in 2016, Deputy Economy Minister of Kyrgyzstan Eldar Abakirov said at the forum. Most investments came to the financial services (67.3%), transportation and communications (23.6%), and hotel and restaurant activities (5.9%).

Bilateral trade turnover was $154 million for 2016 and increased by $31 million compared to 2015.

Abakirov told about the country’s investment policy aimed at creation of a favorable business environment and attraction of FDI. Two procedures are required to open a company in Kyrgyzstan, and it takes three days only, and in this regard the country holds the 12th place in the Doing Business rating.

The investment regime is equal both for the domestic and foreign investors in Kyrgyzstan. Administrative barriers to entry into Kyrgyzstan’s market have been reduced, and free capital export and currency conversion provided. The country has the most liberal tax regime. The VAT is 12% and the profit tax and sales tax are 10% each.

However, the trade indicators between Kyrgyzstan and the United States are low, so we need to raise it, Head of the Kyrgyz President’s Office Sapar Isakov said. Kyrgyzstan is a member of the Eurasian Economic Union with a market of 182 million consumers and enjoys special trade conditions. Thus, the US companies may be interested in investing in the country, he concluded.

Good progress

Over the past five years, cooperation between the two countries has made good progress, including in the maintenance of democratic goals. According to US Ambassador to Kyrgyzstan Sheila Gwaltney, the USA supports the public sector, education and other spheres, attaching great importance to the development of a sustainable economy in the country. The program for business development includes tourism, agriculture and light industry.

The USAID will continue to collaborate with the Kyrgyz Government to increase tourism capacity and support tour operators who will participate in exhibitions in Madrid, Istanbul and other cities. In agriculture, the USAID is supporting more than 30 small farms and households, including those in remote regions, developing new technologies to increase yields.

The rate of American franchise expansion has increased in recent years in Kyrgyzstan, in particular in entertainment, tourism, hotel and restaurant activities.

The visit of representatives of several largest American companies testifies to the growing interest of business and private investors from developed countries to cooperate with Kyrgyzstan, President of Kyrgyzstan Almazbek Atambayev said at the meeting with the US business mission. He told the guests about the State’s efforts to create favorable conditions for doing business and ensure transparency of all processes.

“Kyrgyzstan is already becoming a paradise for business, a free country where you can invest and earn big money, working honestly and transparently,” President Atambayev said.