EDB Assists Development of Processing Industry in Kazakhstan
The EDB executed a loan agreement with Mercur Dom Ltd on financing a sizable investment project to develop a wood processing capacity in Almaty Oblast, Kazakhstan. The agreement was signed by Kambar Shalgimbayev, Deputy Chairman of the EDB Executive Board, and Vladimir Poplavsky, General Director of Mercur Dom Ltd.
Under this project, a modern wood processing complex with a full process cycle will be built, including the manufacture of hi-end products.
A total of $63 million will be provided by the Bank in a seven-year loan. These resources will be used by the borrower to complete building and assembly work and engineering systems, purchase equipment, refinance its debt to Kazakh banks, and replenish its working capital.
The project is fully in line with the mission and strategy of the EDB, as it will contribute to the sustainable growth and diversification of Kazakhstan’s economy by assisting the development of wood processing and related industries – small house building and furniture production. The new complex will satisfy the increasing domestic demand for wood processing products and allow the import of such products to be reduced. As importantly, new jobs will be created and tax revenue will be generated.
The project is also in line with the tasks of the Programme of Innovative and Integration Development of the Forestry Complex in the Republic of Kazakhstan in 2004-2010, which was developed in accordance with the Kazakhstan-2030 Strategy, the main summary documents of the International Summit on Sustainable Development, and the State Programme of Industrial and Innovative Development of the Republic of Kazakhstan in 2003-2015.
The project will also have a positive effect on integration: it will assist the expansion of mutual trade and investments by the region’s countries. The products will be distributed domestically and, possibly, in the border regions of Russia and Central Asian countries; in a longer term, if the company obtains an ISO quality certificate, it will also launch export to more distant markets.
In addition, Mercur Dom established a subsidiary in Russia which will satisfy the company’s raw material needs to 60%. The project will allow the goods turnover between Kazakhstan and Russia to be increased, and secure Kazakh investments in production assets in Russia. In this respect, the project responds to the Aktobe Forum of the Border Regions of Russia and Kazakhstan attended by the Presidents of the two countries, which addressed the prospects for bilateral co-operation in various sectors, including industry.