KazCham

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Kazakhstan plans to borrow $1 billion each from the Asian Development Bank (ADB) and the World Bank in order to finance its 2016 state budget deficit.

Kazakhstan’s parliament passed the budget last month, with an estimated deficit of 723.4 billion tenge ($2.2 billion).

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Samruk-Kazyna, the sovereign wealth fund of the Republic of Kazakhstan, has announced memorandums of understanding and agreements for five projects totalling $4 billion at the meeting of the Kazakhstan-China Business Council (KCBC).

The event was attended by more than 350 representatives from governments and businesses from both countries and included keynote remarks from Kazakhstan’s Prime Minister Karim Massimov and Samruk-Kazyna’s CEO Umirzak Shukeyev.

Key announcements at the KCBC meeting included:

• Agreement between KazMunayGas and Sinopec in oil exploration and production, petrochemicals, engineering and renewable energy.
• Agreement between Kazakhstan’s national atomic company, Kazatomprom, and China General Nuclear Power for the design and construction of a plant for the production of fuel assemblies in Kazakhstan and the joint development of uranium deposits in Kazakhstan.
• Agreement between Kazakhstelecom and China Telecom to roll out fibre optic communications lines in rural Kazakhstan.

Kazinform

On November 18, the EXPO-2017 Commissioner Rapil Zhoshybayev met with Ambassador of Cuba to Kazakhstan, Commissioner of the national section of the Cuban pavilion at the EXPO-2017 Carlos Enrique Valdes de la Concepcion in Astana.

The sides shared opinions about the prospects of future cooperation in the green energy sphere and signed an agreement on Cuban participation in the EXPO-2017.

Cuba has participated in EXPO exhibitions since the first one in London in 1852 (as a Spanish colony). It has become the 14th country that signed an agreement on the participation. However, 53 world countries and 11 international organizations have officially confirmed their participation in the Exhibition in Astana.

The Ambassador noted these events are a measure of a high level of political relations between the two countries. Cuba understands the relevance of the theme of the EXPO-2017 and plans to produce 24% of the total energy from renewable energy sources by 2030.

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The $40 billion “Silk Road” fund, set up last year to boost connectivity across Asia, has agreed to contribute $2 billion to a new investment fund to support “capacity cooperation” with Kazakhstan.

China has been trying to promote similar cooperation with other countries, under which local firms export some of their huge production capacity as they build infrastructure and factories overseas.

Chinese Premier Li Keqiang held talks with his Kazakh counterpart Karim Massimov in Beijing on Monday, vowing to step up bilateral cooperation in industrial capacity, agricultural products, energy and regional connectivity.

PwC Kazakhstan

·           a gradual introduction of obligatory electronic invoices: during 2016 — for certain types of taxpayers, from 2017 — for all VAT payers. Violation of electronic invoicing requirements could result in an administrative fine for large taxpayers up to 80% of the VAT stated in the invoice’s hard copy (but not less than 40 MCI, approximately KZT 85 thousand);

·           transfer of goods from KZ to another member state of the Customs Union (CU) within the same legal entity shall be non VAT-able turnover.  Similarly goods, imported from another member state of the CU within the same legal entity shall not be subject to import VAT;

·   new provisions on VAT refunds for taxpayers who have excess VAT receivable accumulated during the period of geological exploration and field development;

·           a clarification on turnovers, which are not turnovers of commissioner under agency and commission  contracts, as well as clarification on the order of invoicing under a commission contract;

·   a cancellation of voluntary VAT registration from 2017;

·           a reduction of the annual turnover threshold for mandatory VAT registration up to 3 234 MCI (about KZT 7 mln);

·           new requirements for VAT registration;

·           a transition to electronic VAT registration certificate from 1 April 2016;

·   prolongation of import VAT payment by offset mechanism on import of certain goods till 2022.

Telegraph

Residents at a proposed apartment building in Astana would be able to ski or snowboard down a 1,000ft slope linking the roof to the ground.

A new housing complex planned in Astana, Kazakhstan‘s capital, is set to include a 1,000ft ski slope, running from the roof to the ground.

The proposed project was devised by a group of architects, led by Shokhan Mataibekov, who were inspired by Kazakhstan’s exceedingly long, cold winter.

The city of Astana experiences temperatures averaging around -20°C, with a long winter lasting from November right through to April – but there are currently no slopes nearby for skiers and snowboarders to make the most of the conditions.

Enter House Slalom, a multi-purpose, 21-storey building comprised of shops on the ground floor, 421 flats on the upper floors, and an outdoor ski slope running alongside the building.

Plans have been submitted, and the project is currently awaiting approval from city officials.

If successful, the building would be the first of its kind in the world according to Mr. Mataibekov, formerly Astana’s chief architect.

He added: “It would be an instant hit for ski and snowboard lovers”.

The run has been designed to offer year-round snow sports – constructed from Snowflex, a synthetic material designed to simulate the slip and grip effects of real snow, the slope would be equally accessible in the summer months.

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The Kazakh National Holding KazAgro plans to attract $2 billion in funds from the World Bank for 35 years for lending to the agro-industrial complex, according to the Chairman of the National Holding Nurlybek Malelov.

According to the chairman, the loan will provide a twofold increase in lending to the agricultural sector, without attracting funds from the budget.

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Central Asia’s largest transport and logistics centre has been launched in Astana, Kazakhstan.

The country’s railway operator, Kazakhstan Railways, has said that the centre will provide integrated storage services with a full cycle of multi-modal logistics.

Transport and logistics centres will also be built in other major cities in Kazakhstan, such as Aktobe, Pavlodar, Almaty, Uralsk, Atyrau, Kostanai and Semey as part of a programme to create external and internal terminal networks.

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In a major legislative development, Kazakhstan is implementing a new law on public-private partnerships. As such, our team has prepared an extended overview of the major aspects of this new law, which is due to enter into force next week on 23 November 2015.

Kazakhstan’s President Nazarbayev has signed the Law “On Public-Private Partnership” (the “Law”) which provides for the conditions of cooperation between the state and private businesses in Kazakhstan. The law is aimed at ensuring the country’s sustainable social and economic development and will enter into force on 23 November 2015.

The Law regulates the main approaches and phases for the implementation of public-private partnership (PPP) projects, and outlines the challenges, principles and defining characteristics of PPPs. It also provides guarantees for the rights and interests of the participants of PPPs, the forms of their participation in projects and the means of state support.

The participants of PPPs include: (i) the state (ii) entrepreneurs and (iii) financial organisations that provide project financing. The Law stipulates the conditions for sources of financing for PPP projects, the reimbursement of expenses to subjects and income generation.

The Law also stipulates that a private partner may be selected on the basis of (i)a tender or (ii) direct discussions. It also defines the qualification requirements that a potential private partner must satisfy in order to participate in a tender process, the conditions for a tender process and the procedure for the conclusion of PPP agreements.

Specifically, the new definitions include the following:

• “Private partner” – a sole entrepreneur, partnership, consortium or legal entity, except for persons acting as public partners in accordance with the Law, entered into a public-private partnership agreement;
• “Public partner” – the Republic of Kazakhstan, on behalf of which the Government of the Republic of Kazakhstan or local executive body of the region, city of republican status and the capital, as well as their other authorised state authorities and subjects of quasi-public sector, 50% and more of voting shares (interests in the charter capital) of which are directly or indirectly owned by the state, concluded a public-private partnership agreement;
• “Public-private partnerships” – a form of cooperation between the public and private partners corresponding to the characteristics defined in the Law;
• “Direct agreement” – a written agreement between the public partner, private partner and creditor of a private partner for the implementation of a public-private partnership project of special importance.

In addition, President Nazarbayev has signed the Law “On amendments and additions to some legislative acts of the Republic of Kazakhstan as to the public-private partnership”. The purpose of this legislative act is to bring current Kazakh legislation into compliance with the new Law.

This Law is also aimed at implementing some of the “100 Concrete Steps” and regulates the issues involved in attracting investment for the construction of infrastructure for the Kazakh population.

AramcoWorld

In October 2014, the us National Aeronautic and Space Administration (nasa) released images of the Aral Sea taken by its Terra satellite. These were among the first to show the South Aral Sea’s entire eastern basin as bone-dry—a dramatic difference from a similar image taken in August 2000. “This is the first time the eastern basin has completely dried in modern times,” said geographer and Aral Sea expert Philip Micklin of Western Michigan University. “And it is likely the first time it has completely dried in 600 years, since the medieval desiccation associated with diversion of Amu Darya to the Caspian Sea.”

Aral, population just above 30,000, is the largest town on the northeast shore of the North Aral Sea, and some 73,000 people remain living in the surrounding region. Here, explained Darmenov, the Kazakh government and World Bank must work together with the Syr Darya river to save the sea. The river is the sea’s sole source of replenishment, and its fate is still largely determined by cyclical rainfall patterns, as well as snowmelt from the distant Tien Shan Mountains.

In 1976, according to a historical marker at the once-thriving port, Aral shipped 5,000 metric tons of wool, 340 furs, 3,000 sheepskins, 1,500 pairs of woolen gloves and 1,200 pairs of woolen trousers. Now, the tourists who stop by here can climb aboard the Lev Berg, a fishing boat painted bright blue, and look out over the desertified lakebed. Two rusting cranes that have not been used since the early 1980s hulk above the otherwise flat horizon.

But the waters that by the early 2000s had retreated 100 kilometers from Aral are now only 20 kilometers away, and they are coming closer.

“We inherited the problem of the Aral Sea from the Soviet Union, but as soon as we became independent, we adopted special programs,” said Zhanbolat Ussenov, director of the Eurasian Council on Foreign Affairs and former spokesman at Kazakhstan’s Foreign Ministry.

“We of course understood that we wouldn’t be able to save the sea on our own— from neither a financial nor an expertise point of view—so we created an International Save the Aral fund,” Ussenov explained. “We invited the World Bank and individual countries to help us with this environmental catastrophe. And I’m happy to say that today the Aral Sea is slowly returning to its original boundaries.”

The dream of saving the entire Aral Sea – both North and South – is unrealistic, said experts who know the region. But everyone seemed to agree that the first phase of the project Ussenov alluded to – officially known as the Syr Darya Control and Northern Aral Sea Project, or synas-1 – has been a success so far.

Ahmed Shawky M. Abdel-Ghany, a senior water-resources specialist with the European and Central Asian region of the World Bank’s Water Global Practice, has managed the project from his Washington office since late 2010. He said synas-1 cost $83 million, and it included a subproject for restoration of the North Aral Sea.

“We’re not talking about the whole Aral Sea, just the northern part that fully lies in Kazakhstan,” said the Egyptian civil engineer, who’s worked in 20 countries during his 12-year career with the World Bank.

He said that one crucial element of synas-1, construction in 2005 of the 13-kilometer-long Kok-Aral Dam, increased the volume of water in the North Aral Sea by around 50 percent in three years.

“The northern Aral Sea was initially [in 2005] 38 meters above sea level. Now it could reach around 42 meters,” said the engineer. “As a consequence, salinity in the NAS has been reduced by around half, but all these numbers are subject to the hydrological variables that change every year.”