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Tourism

Kazakhstan to Construct Three New Airports

Kazakhstan has started the construction of airports in the resort zones of Katon-Karagai, Zaisan, and Kenderli, which are popular tourist destinations. The airports will link the three resort areas with Astana and Almaty. Together with other measures, this will give the tourism industry a new push. Katon-Karagai State National Nature Park is the largest national park in the country. It is located in the East Kazakhstan region and is included in UNESCO’s Man and the Biosphere Programme as a biosphere reserve. Lake Zaisan is also located in Eastern Kazakhstan. It is a beautiful freshwater lake fed by the Irtysh River and surrounded by cliffs. Kenderli is a resort in the Mangistau region located on the coast of the Caspian Sea. It is becoming increasingly popular every year. The Civil Aviation Committee (CAC) said reaching these tourist destinations will be much easier. The sites for the construction of airports have already been identified. CAC reported that “In Zaisan, the airport will be located on the territory of the former military airfield named after Satpayev. The distance from the construction site to the city of Zaisan is 25 kilometers. In Katon-Karagai district, a new air harbor will be built between the villages of Katon-Karagai and Ulken Naryn, near Soldatovo. The distance from the construction site to Katon-Karagai village is 38 kilometers”. The Kenderli airport will be built 13 kilometers from the resort area. Construction of the three airports will begin in 2025 and provide direct air routes from Astana and Almaty. In December 2023, the Ministry of Transport reported that it plans to spend 16 billion KZT to build the airport in Zaisan and an additional 23.2 billion KZT in Katon-Karagai. Other major expenditures are planned for the development of the tourism industry. According to the Ministry of Sports and Tourism budget plan, these expenditures will increase the number of foreign tourists from 2 million in 2024 to 3.5 million in 2026 (+75%). The number of domestic tourists will also grow by 15% over three years to 8.5 million in 2026. It is reported that 4.6 billion KZT will be allocated for the formation and promotion of the tourism industry, including 1.52 billion KZT in 2024. In 2023, 2.44 billion KZT was spent on these purposes. It is further planned to allocate 11.9 billion KZT for the training and education of professionals in the industry, including 3.5 billion KZT in 2024, for this purpose. Efforts to modernize the industry are already bearing fruit. In May 2024, Kazakhstan improved its position in the tourism development index. Kazakhstan ranked 52nd among 119 countries, beating Qatar, Azerbaijan, Uzbekistan, Vietnam, Egypt, and Latvia. Kairat Sadvakasov, Chairman of the Board of Kazakh Tourism, called it a victory. He stated, "Our long-term goal is to enter the TOP-50 in this rating”. Achieving this ambitious goal will require serious efforts. In the summer, President Kassym-Jomart Tokayev listed the shortcomings of the tourism sector and outlined priority areas of work. One of the most important points was logistics, as it...

Cultural Heritage

Tashkent Announces International Contest to Design New Entrance Gates

The city authority (hokimiyat) of Tashkent has announced the start of an international competition to develop a sketch concept for four entrance gates to the capital of Uzbekistan. The new gates will be created at the Rohat, Bektemir, Erkin, and Uchkahramon posts. The project should embody modern and traditional ideas, with construction planned to begin by the end of this year. The competition is open to both Uzbek and international participants, and those wishing to participate can submit their works individually or in teams. The three best works will receive cash prizes from 30 to 100 million UZS ($2,350 to $7,800). The winner will be announced on November 30. Until the 19th century, Tashkent was surrounded by a mighty fortress wall divided by 12 gates. At first, the fortress of Binkenta (the former name of Tashkent) had seven gates, but with the city's expansion by 1864, their number reached 12. Since the shape of the city wall coincided with the system of stars, the gates were built according to the location of 12 stars of the Zodiac according to the cycle of Muchal. Thus, 12 gates were the earthly reflection of heavenly luminaries. Tashkent was the only city in the world with such celestial gates. These gates were destroyed, and the fortress wall was demolished in the late 19th century. But in recent years, there have been repeated ideas to restore part of the entrance gates. In June 2022, the Tashkent hokimiyat presented the first sketches for the fortress gates.

International Finance Corporation

IFC Increases Investments in Central Asia

The International Finance Corporation (IFC), a member of the World Bank Group, says it committed $1.04 billion in Central Asia in the fiscal year 2024, which started on July 1, 2023, and ended on June 30, 2024. The funds comprised over $400 million in long-term financing from IFC’s account, $600 million in mobilization, and $35 million in short-term trade and supply-chain finance to facilitate trade flows. The funds, coupled with advisory support, aimed to increase private sector participation, create jobs, boost financial inclusion, bolster infrastructure, and support the region’s green transition. Priority sectors included finance, capital markets, renewable energy, agriculture, and infrastructure. Over the last fiscal year, IFC-supported projects in the Central Asian region created about 35,000 jobs, including more than 13,000 for women. Strengthening local financial markets is among its key objectives. To that end, the IFC invested $228 million in 10 financial institutions in Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, with up to half earmarked for women entrepreneurs and rural enterprises. The IFC also supported local financial institutions in growing their micro, small, and medium enterprises (MSME) businesses, advancing climate finance and digital transformation, and issuing the first-ever sustainability, social, and green bonds. The IFC and the World Bank financed a new solar plant with the country’s first battery energy storage system to support Uzbekistan's green transition and climate action. The plant is expected to provide electricity access to approximately 75,000 households in the Bukhara region. In Tajikistan, the IFC invested in the country’s first green bond, issued by Eskhata Bank. The bond will support climate-smart projects and MSMEs undertaking environmental projects. In Kazakhstan and Kyrgyzstan, in addition to investments to increase financial inclusion, the IFC has been evaluating new advisory and investment opportunities, including PPPs in areas such as drinking water supply, renewable energy (including geothermal solutions for heating and cooling), railway projects as part of the Middle Corridor, and the first municipal green bonds in Central Asia. The IFC also supports Kazakhstan's accelerated methane mitigation efforts, which align with the Global Methane Pledge. Wiebke Schloemer, the IFC’s Director for Türkiye and Central Asia, reiterated its commitment to the region: “Over the past 20 years, the region has seen substantial development, with an average annual growth rate of 6.2 percent. Central Asia must leverage the green transition to boost private investment, strengthen connectivity, and reduce resource dependency to continue this growth. The IFC aims to address these goals and continue to deliver solutions where we are needed most — from increasing access to finance for farmers and women entrepreneurs to creating jobs to continue to help countries transition to net zero.”

Healthcare

EBRD Supports Healthcare and Municipal Transport Projects in Kazakhstan

The European Bank for Reconstruction and Development (EBRD) has supported Kazakhstan's first healthcare sector public-private partnership (PPP) project, and provided finance for a tram fleet renewal program in the Kazakh city of Pavlodar. The EBRD arranged a €365 million financing package provided by six financial institutions to construct and operate a 630-bed multidisciplinary hospital in Kokshetau, northern Kazakhstan. The financing, including the EBRD’s €105 million loan, will be provided to a Kazakhstan-based subsidiary of Rönesans Holding of Turkey. The project will be co-financed through parallel loans totaling up to €260 million provided by the Asian Infrastructure Investment Bank (AIIB), the German investment corporation DEG, the Islamic Corporation for the Development of the Private Sector (ICD), Proparco, a subsidiary of Agence Française de Développement, and the Development Bank of Kazakhstan (DBK). This first PPP in the healthcare sector of Kazakhstan and Central Asia will be a greenfield development of a 110,000 m2 facility, which will provide services to more than 730,000 people living in the city of Kokshetau and the broader region of Akmola. According to the PPP agreement, the private partner will be responsible for maintaining the facility and running a digital hospital information management system. At the same time, Turar Healthcare, a state-owned, non-profit national healthcare operator, will provide medical services. EBRD President Odile Renaud-Basso, who was visiting Kazakhstan, commented: “The EBRD is pleased to join forces with our longstanding client Rönesans Holding to launch the first healthcare sector PPP in Kazakhstan and the region. PPPs are recognized as one of the most effective forms of long-term contractual relationships between the public and private sectors. They will help provide sustainable healthcare solutions, introduce new technologies, and improve the quality of medical services.” The EBRD has also announced support for a tram fleet modernization program in the north-eastern Kazakh city of Pavlodar. The EBRD’s loan of up to €10 million to Pavlodar tram management company will help the company acquire up to 25 energy-efficient trams. A €4 million loan from the Clean Technology Fund will co-finance the project. The tram company handles almost 40 percent of passenger traffic in the city, with a population of more than 360,000. Yet nearly 60 percent of the company’s fleet was commissioned in the 1970s and 1980s and requires urgent renewal. New battery-powered trams will have an autonomous driving range of up to 20 km, which means they can continue operating during electricity outages. The EBRD has invested €10 billion in 328 projects in Kazakhstan, most of which support private entrepreneurship.

International Cooperation

American Chamber of Commerce in Kyrgyzstan: Future Development and Investment Climate

As Central Asia continues to become a regional hub for trade and innovation, The Times of Central Asia spoke with Altynai Asanova, the Executive Director of the American Chamber of Commerce in the Kyrgyz Republic, to discuss the investment climate in Kyrgyzstan, economic trends, and future development. TCA: I see that your background is primarily in hotel management and sales; how did you transition from this role to your current position? “My background includes 18 years in the hotel business. Ten years at Hyatt, starting in food and beverage and ending in the hotel sales department; then, I worked at the Orion Hotel for the pre-opening and opening stage for about three years. After this, I was hired by Sheraton, one of the Marriott chain hotels, to work on the pre-opening and opening stage for two years. I was still involved with the business audience and wanted to continue working with the stakeholders and companies who know me.” TCA: How would you describe the hospitality industry in Kyrgyzstan? Is it mainly in Bishkek or other regions? “It is developing; before, it was only the Hyatt. Now, there are three or four chain hotels in Bishkek. It is good that there are more players in the market. It is developing day by day. The development is mainly in Bishkek, but we have good perspectives for Issyk Kul as long as the roads and infrastructure are completed. The chain hotels are also becoming interested in Issyk Kul. The good thing is that enough businessmen understand and accept the market challenges in Issyk Kul. They know it will not be financially stable at launch since the busy season is only about 50 days. But if the hotels provide full service and comfort, people will travel there for the full season.” TCA: Stepping away from hospitality, what did American investment in Kyrgyzstan look like ten years ago?” “Before, there was an American base in Kyrgyzstan. During that time, the hospitality business was amazing. The rates were high considering the charter flights and pilots who needed a place to stay. Now, these rooms are listed at the lowest rates. At that time, the Hyatt was the only five-star hotel in Bishkek, so all the American guests were staying at the Hyatt. The investment climate dropped after the U.S.-Kyrgyzstan agreement ended. There is opportunity, but it goes slowly.” TCA: Since then, what has changed in the business climate? “Business-wise, if we look from the angle of the association, we do not have any purely American business; we have franchise members: KFC, Hyatt, Sheraton, and some banks. It would be nice to have purely American [businesses] here.” TCA: Who are the current major investors in the Kyrgyz market? And is competition relevant to win contracts with local companies? “China, Russia, Kazakhstan, the Netherlands, and Turkey are the main investors. Before making any contracts or tenders, we need to understand the possibilities of our market, ‘Is our country ready to accept this level of business?’ The first question...

Investment

Kazakhstan Hosts Meeting of Council of Foreign Investors

Astana's Palace of Independence hosted the 36th meeting of the Foreign Investors Council. Kazakhstan's President Kassym-Jomart Tokayev and Prime Minister Olzhas Bektenov attended the event. This year's central theme was “Kazakhstan's New Investment Cycle.” The meeting discussed strategies for the new investment cycle and the development of Kazakhstan's attractiveness to investors. Citing data from the International Institute for Management Development (IMD), Tokayev emphasized that Kazakhstan has become one of the world's top 35 competitive countries. “We set ourselves a rather ambitious goal: to attract $150 billion of foreign direct investment by 2029. To realize this goal, the Investment Headquarters under the Government is endowed with expanded powers to solve emerging problems promptly,” said the president. Tokayev noted the merits of international oil companies, which have played an essential role in the country's development. “Foreign investors have invested capital and provided advanced technologies and highly skilled labor. Their investments have contributed to the growth of our energy industry: over the past 30 years, oil production has tripled. Thanks to this, Kazakhstan has become one of the five countries with the highest oil production growth rates. Speaking about the future, we set a goal to overcome the threshold of 100 million tons per year,” he said. The meeting focused on increasing investment attractiveness in the “clean energy” sector. Specific agreements were reached with world companies such as Total, Svevind, ACWA Power, and Masdar on realizing 43 GW of “green” projects in Kazakhstan. In addition, Kazakhstan has a vast potential for developing nuclear energy, so creating an international consortium to realize the NPP construction project is under consideration. Kazakhstan focuses on the work of the Astana International Financial Center to strengthen cooperation in the financial sector. Tokayev spoke of the importance of continuing the dialog between the Council members and government agencies to improve the country's investment climate and implement new initiatives and specific projects. The meeting also included Odile Renaud-Basso, President of the EBRD; Nurlan Dosymbekov, Deputy Prime Minister and Minister of National Economy; Zhang Daowei, Chairman of the Board of the Kazakh Association “Baibazarov” and the Yerstanign Investors; Nikolai Podguzov, chairman of the EDB; Andrew Deleoni, president of Alstom for Africa, the Middle East, and Central Asia; and Vadim Vorobyov, Chief Executive Officer of PJSC Lukoil. Established in 1998, the Council of Foreign Investors is a platform for foreign investors and the government of Kazakhstan to discuss strategic objectives and find solutions to improve the business climate. From the Kazakhstani side, the Council is attended by government members and heads of several national companies and development institutions. Foreign participants include representatives of major international corporations and organizations, underscoring the global interest in investing in Kazakhstan. Last year's 35th Plenary Meeting of the Foreign Investors Council was also chaired by President Tokayev. The main topic of the meeting was “Digital Transformation of the Economy.” At the time, Tokayev emphasized that digitalization is a tremendous technological breakthrough and opportunity. The growth of digitalization is already dramatically impacting economic development and changing the game's...