The IDB Vice President, Dr Amadou Boubacar Cisse was in Kazakhstan from 27-29 August 2007 for a policy dialogue to map out the areas of cooperation between Kazakhstan and the IDB in the coming years, and to support the country in its move to become one of the 50 most competitive countries in the world. Discussions were also held with ministers and senior officials, including the Minister of Economy and Budget Planning, Minister of Transport and Communication, Minister of Agriculture, Minister of Energy and Mineral Resources, Deputy Minister of Finance, Management of both SAMRUK and KAZYNA, Chairman of National Bank, Chairman of Agency for Monitoring and Supervision of Financial Institution. They discussed matters of mutual interest covering wide ranging topics aimed at enhancing IDB partnership with Kazakhstan and prospects for deepening cooperation with the Institutions and development Funds of the Arab Coordination Group. The IDB Vice President congratulated Kazakhstan under the leadership of H.E. Nursultan Nazarbayev for the country’s remarkable socio-economic development. An MOU was signed with Mr Askar Batalov, the Vice Minister of Trade and Industry who is also the IDB Governor. The Vice President reaffirmed the IDB’s determination to participate actively in the development of infrastructure, energy, promotion of trade and investment, regional cooperation, private sector development especially in SMEs, promotion of Islamic financial services and support institutional capacity building. As part of its mandate of supporting development of Kazakhstan, the IDB confirmed its commitment to work with various government authorities and affiliated entities, such as SAMRUK, KAZYNA, KAZAGRO and SAMGAU. In this regard, the IDB will explore financing projects sponsored by the Government state owned enterprises, private sector as well as public-private partnership (PPP). Some of the projects which the Vice President mentioned is the reconstruction of roads of the international route West Europe-West China and Petrochemical projects. The IDB is also prepared to work with concerned authorities to invite the Arab Coordination Group to participate in this and other projects. Rated AAA (Standard and Poor’s, Fitch and Moodys), the IDB is able to mobilize resources from the market at competitive rates, and invest these resources in development projects in member countries. The IDB is also exploring the possibility of tabbing the domestic capital market by mobilizing resources through the issuance of Islamic Bonds (called Sukuk) to finance infrastructure projects. So far, the IDB has issued Sukuk in the international capital market amounting to over US$ 1.4 billion. Issuing local Sukuk would mobilize local currency to finance infrastructure projects. On the occasion of the visit, the Vice President signed two financing agreements to assist in the development of small and medium scales enterprises on 29 August 2007 in Almaty. Two lines of credit worth US$ 50 million each were extended to Bank Turan Alem and Halyks Bank for this purpose. The credit lines are expected to provide medium terms financing to private sector, particularly for SMEs in any productive sector of the economy using Shariah compatible modes of financing of Instalment Sale, Leasing and Istisna’a. Private sector enterprises in Kazakhstan are encouraged to submit suitable projects for processing by these two banks. If these schemes prove successful, the IDB is prepared to increase the amount of credit lines to these and other banks. The Vice President also met with heads of international financial institutions operating in the region, such as the World Bank, Asian Development Bank, EBRD, UNDP and Eurasia Development Bank to share views and also to find ways in which IDB and these institutions could collaborate for the development of Kazakhstan. Apart from the credit lines, the IDB Group has so far provided financing to both public as well as private sector projects and trade financing facilities. Among the projects financed by the IDB are the Almaty-Gulshad and Astana-Karaganda roads, Sizganov Hospital in Almaty, Modernization of KAZPOST and Rural Water Supply project in Karaganda Oblast. Under lines of credit with local banks, the IDB Group also provided financing to the private sector for procurement of farm equipment and oil drilling equipment. IDB has recently introduced post-harvest financing scheme which will assist in the export of wheat from Kazakhstan to other member countries. Based on this experience, the IDB will provide similar schemes to other countries in the region to support their export of agriculture products. 29.08.07