Kazakhstan, along with the Asian Infrastructure Investment Bank (AIIB), are mobilizing finances to address the country's infrastructure deficit.
Unleashing Private Capital: Closing Asia's Infrastructure Financing Gap
ASTANA - Harnessing the power of private capital is crucial for addressing Asia's trillions of dollars infrastructure funding gap. This was the consensus among representatives from development banks, investment firms, and government agencies who gathered for a panel discussion, organized by the Asian Infrastructure Investment Bank (AIIB) and Kazakhstan's Ministry of National Economy at the Astana International Financial Centre (AIFC) on April 29.
Nagima Abuova / The Astana Times
Kazakhstan: A Beacon in Sustainable Infrastructure
The event opened with remarks by Konstantin Limitovskiy, a chief investment officer at the AIIB, emphasizing Kazakhstan's pivotal role in the bank's portfolio. He praised Kazakhstan, a founding member of the AIIB, for receiving over $2 billion in investments across seven major public and private sector projects.
Limitovskiy underlined the AIIB's commitment to projects aligned with Kazakhstan's goal of achieving carbon neutrality by 2060. "We have so far added 420 megawatts of green energy to Kazakhstan, and we're supporting the country's first hospital financed under its public-private partnership (PPP) law," he said.
The conversation expanded to include sustainable infrastructure development, diversified investment tools, and meaningful partnerships.
Government Priorities: Prioritizing Diversification and Off-budget Funding
Vice Minister of Transport Talgat Lastayev echoed Kazakhstan's commitment to building a modern and advanced transport network, supported by ambitious development programs through 2030. "Over 4,000 kilometers of roads are planned for reconstruction and construction, costing more than $15 billion," he said.
Lastayev shared updates on priority transport corridor projects like the Karagandy-Zhezkazgan and Aktobe-Karabutak-Ulgaisyn routes, as well as upcoming co-financing agreements with the World Bank and European Bank for Reconstruction and Development (EBRD).
Private Capital Partnerships: Sustainable Opportunities Amplified
Evgeniya Bogdanova, CEO of the Astana Financial Services Authority (AFSA), underlined the importance of sustainability in capital markets. "Engaging private capital in a meaningful way requires regulatory certainty, risk mitigation tools, and financial instruments that align with long-term investor goals," she said.
Bogdanova mentioned AFSA's efforts to expand the financial environment for sustainable products and environmental, social, and governance (ESG) instruments, stressing the indispensable role of multilateral development banks like the AIIB in bridging public development needs with private sector execution.
Harnessing Capital: AIIB's Strategies for Mobilizing Private Investment
Asim Rana, AIIB's manager for financial institutions and funds clients, divulged the bank's strategies for attracting private capital. These strategies involve partnering with financial intermediaries, such as banks and asset managers, to scale impact through on-lending facilities and collateralized loan obligation (CLO) vehicles.
Rana pointed out the banks' creation of Bayfront, a CLO vehicle in Singapore, and similar initiatives in Hong Kong. "We've established a market for securities that are hard to make in Asia," he said, adding that these innovations help recycle capital and increase liquidity in the sector.
Kazakhstan's Development Agenda: Balancing Challenges and Opportunities
Akzhol Urazalin, a deputy director of the International Economic Cooperation Department at the Ministry of National Economy, shared valuable insights into Kazakhstan's development agenda. He noted that the nation had a steady 4.8% growth in 2024, driven by agriculture, transportation, and manufacturing, with its infrastructure plan spanning 2029 valued at approximately $80 billion.
Urazalin highlighted the importance of public-private partnerships and the need for innovative risk-sharing models between the government and private sector to promote the use of green financial instruments.
Privately-led Progress: Achieving Sustainable Development
SkyBridge Invest CEO Zamira Sundetova offered a private sector perspective on infrastructure development. "At SkyBridge Invest, we don't just represent our clients; we help facilitate complex infrastructure transactions," she said. "We're doing our best to help Kazakhstan achieve its goal of carbon neutrality by 2060."
Sundetova also emphasized the growing interest in renewable energy and digital infrastructure, driven by national priorities and increasing regional demand.
Banks as Ecosystem Builders: A Shared Responsibility
China Construction Bank's (CCB) Astana branch senior executive officer Wang Xianming underscored the bank's focus on gas, solar, and wind infrastructure investments in Kazakhstan. "In supporting infrastructure development, commercial banks can act as financing supporters, risk managers, and ecosystem builders," said Wang.
Wang detailed the bank's efforts to develop green finance structures, reduce financing costs through cross-border cooperation, and syndicate loans in collaboration with multilateral banks. He urged the need for increased collaboration among banks, asset managers, insurers, and government entities to cultivate diversified financing systems.
In conclusion, this panel discussion highlighted a multi-faceted strategy combining collaborative partnerships, sustainable project focus, PPP frameworks, strategic alignment, risk management, and innovative financing to mobilize private capital towards addressing Asia's infrastructure financing gap. By embracing sustainable, green, and resilient infrastructure projects, and fostering collaborative partnerships across various sectors, actors can collectively contribute to closing the gap and promoting sustainable development.
In the context of the panel discussion organized by the Asian Infrastructure Investment Bank (AIIB) and Kazakhstan's Ministry of National Economy, it was noted that Kazakhstan, a founding member of the AIIB, has received over $2 billion in investments in various public and private sector projects, demonstrating the nation's important role in the bank's portfolio and its significant involvement in business and finance. Moreover, the AIIB's commitment to projects aligned with Kazakhstan's goal of achieving carbon neutrality by 2060 indicates a focus on sustainable infrastructure development, which is crucial for addressing the infrastructure funding gap in Asia.
