Investment projects as the basis for the development of Kyzylorda region
The Kyzylorda region has a considerable potential, given the fact that the region is rich in mineral resources. This region is among the top 5 regions of the country with the most reserves of oil and gas, accounting for about 15% of total oil production in Kazakhstan. However, the depletion of mineral resources and water intrusion in oil wells has resulted in decreasing the volume of crude oil production in this area. This means that further sustainable development of the region will largely depend on attracting investment in implementation of new industrial and innovative projects.
Under the Kyzylorda Region Development Strategy until 2020 adopted in spring of this year, the economic growth in the region in the next decade will be based on strengthening the five promising industries.
First of all, the matter concerns the prospects of the mining industry potential growth. In the region, there are deposits of gold, silver, cadmium, germanium, oil shale, rock phosphate, and the raw material for production of building materials. The region ranks first in the country in terms of vanadium reserves and third in terms of reserves of zinc, uranium and lead. The plans for the next few years include prospecting works in the western flank of the Karamurun-Mynbulakskiy ore field, where deposits rich in zinc, gold, and lead are projected. Deposits of copper and gold were discovered at the Akzharskiy ore field. It is planned also to include the proven deposits of titanium and iron in the national program of the mineral sector development. The regional administration has expressed its readiness to fully support investors by granting mineral production licenses through NC SEC Baikonur JSC.
Among the advanced projects we would mark the expansion of the Shalkiya ore mine and the construction of an ore enrichment plant with a capacity of to 4 million tons of lead-zinc ore per year that provides for the creation of 900 new jobs. The reserves of this ore deposit, located in the Zhanakorgan district, exceeds 265 million tons of ore, including more than 8.5 million tons of zinc and more than 2 million tons of lead. Moreover, this area has rare earth metals. The total cost of the project, initiated by ShalkiyaZinc LLP, is 90 billion tenge.
One more major project in the area of mining is the autoclave processing of black shales at the Bala Sauyskandyk deposit, located in the Shieliyskiy district. During the period until 2018, 35 billion tenge will be invested in this project, with the creation of 649 jobs. The proposal made by Firm Balausa LLP with regard to this project looks the most attractive: the idea is that in the framework of the project not only vanadium can be produced, but also ferroalloys, silicon carbide, vanadium batteries for solar and wind power plants, etc. Therefore, it seems quite logical that the Governor (Akim) of the region, Krymbek Kusherbayev, proposed to study all the options and to make a decision on the creation on the territory of the field of a cluster of related industries.
The second trend is the development of a building materials industry that will be based on local raw materials. Here, the flagship project is the construction in Kyzylorda of a plant for fabrication of sheet glass, worth $140 million, which will provide jobs to 400 people. Syr Tsementі LLP is implementing a project of construction of a cement plant with a capacity of 750 tons of cement per year with a total investment of 12.7 billion tenge. Firm Dana LLP is working on the project of construction of a mining and processing works for dry silica sand enrichment; the cost of the project is of 4.5 billion tenge. Among the other most important initiatives in this area, we can mark the construction of a lime plant, the arrangement of production of dry building mixes and foamed glass. It should be noted that the latter product is an indispensable insulation material in the construction of nuclear power plants and thermal power plants.
To ensure food safety, it is necessary to further develop agriculture, which is the traditional area of business for the region. Projects in this area are numerous. One of them is the construction of a poultry farm with a capacity of to 6 million tons of poultry meat a year. The project is expected to be implemented at the expense of private investors and the SEC Baikonur. The putting into operation of the poultry farm, worth 4.5 billion tenge, will provide permanent jobs to 413 people. RZA JSC initiated the expansion of the dairy farm with bringing the number of livestock to 1,200 animals. There are also projects for the production of feed for poultry; also, a project of cattle fattening will be launched. Along with the development of fruit and vegetable production, the construction of greenhouses will start. They will be able to use cheap electricity generated at the sulfuric acid plant, put in operation by SKZ-U LLP. There are a number of good projects in the fish cluster as well.
Given the rich cultural heritage of the region, as well as the fact that the longest section (800 km) of the international highway Western Europe – Western China passes through the territory of this region, it was decided to create a tourism cluster there; so tourism is seen as the fourth promising industry. In particular, the project of construction of a pilgrimage center on the basis of the memorial Korkyt Ata, implemented by Dorstroy LLP, is near to completion. It is planned to implement a tourism project Space Harbor on Baikonur. Also, work is now in progress to develop a recreational area on Lake Kambash. In addition, along the said international highway three large transport and logistics centers with roadside infrastructure will be built.
And of course, one of the main objectives is the sustainable provision of new industrial facilities and the population of the region with energy. So, in the framework of public-private partnership through SEC Baikonur, a project of construction of a new thermal power station #2 will be implemented with the attraction of investment from private businesses; the cost of the project is about 30 billion to 35 billion tenge. Proposals were made to use associated petroleum gas from the Kenlik field for power generation, to lay the gas distribution pipeline Aryskum – Zhosaly, etc.
In general, the implementation of objectives for forced industrialization of the country that were set by the President of Kazakhstan, has lead to a notable leap forward in intensive industrial development of the region. As part of the Industrialization Map, 23 projects with a total value of 138.4 billion tenge are currently in the process of implementation in the region.
Most importantly, the investment activity in the region continues to grow. For seven months of this year, investments in fixed assets, taking into account post evaluation have risen by 94.2% to 157.6 billion tenge. Investment from own funds by enterprises and organizations has increased by 70.4%, foreign investments have increased 2.2 times, investment from the local budget – 2 times, and from the national budget by 41.4%.
The regional administration chose a tactic of active and systematic work. To attract investment, an investor’s support center was set up within the structure of SEC Baikonur. In March of this year, with the support of the governor of the region, the 1st Investment Forum "Baikonur" had been held in Kyzylorda, and later in June, a delegation of diplomatic missioners from more than 20 countries, the UN and UNESCO were invited to visit the region.
Here are the first fruits. Foreign investment will be made in the bus fleet of the region. The partner of the project, the later with an estimated cost $18.5 million, will be the EBRD. Technical consultants are expected to arrive in the near future.
Talks are now in progress with Kazeurope Business Consulting to attract investors from Spain for the development of renewable energy sources, in particular, the construction of solar power plants.
Speaking of foreign investments in the economy of the region, it is worth noting that they are made, among other things, through the Development Bank of Kazakhstan and the World Bank. There are large domestic investors in Kazakhstan as well. In the next five years the NC Kazakhstan Temir Zholy plans to make investment in the region in the amount of about 300 billion tenge. Of course, the investment potential of the Kyzylorda region is far from being fully uncovered, but work in this direction is gaining momentum.