ANNOUNCEMENT 23 Apr 2015

In April 2015, the government of Kazakhstan announced a change in private-sector financial support and a change in its trade finance instruments.

NUMBER OF INTERVENTIONS

2

  • 0 harmful
  • 2 neutral
  • 0 liberalising
Inception date: No inception date

State loan

On 23 April 2015 the Government of Kazakhstan approved Decree No. 271. It constitutes a between the Government of Kazakhstan and the National Bank of Kazakhstan for financing of domestic producers and exporters. The financing of the mentioned beneficiaries is to be performed through the 'Development Bank of Kazakhstan' (DBK) and its daughter company 'BRK-Leasing' in the period 2015-2016. The state support is to be either in the form of leasing or loans.
Decree No. 271 outlines three direction of state support, namely:

  • State support of domestic automakers;
  • State support for the production of passenger cars;
  • State support of exporters.

 
State support of domestic automakers
Financing

Mechanism: signed agreement between DBK and commercial banks as a first step. The parameters of the allocated credits by the commercial banks as a second step are:

Total limit of the financing: 15 billion tenge (ca. 81 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 1% p.a.
Currency: tenge
 
Leasing
Mechanism: signed contract between DBK and 'BRK-Leasing' as a first step. The parameters of the the agreement between them include:

Total limit of the financing: 5 billion tenge (ca. 27 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 0.25% p.a.
Currency: tenge
On a second stage 'BRK-Leasing' acquires vehicles (except for agricultural machinery and appliances) from local manufacturers (hence, in addition to bail-out features, it contains a localisation requirement as per the GTA criteria, although no concrete percentage of local content is mentioned.)
Total leasing limit: not mentioned
Leasing contract maturity: from 3 to 5 years
Nominal leasing fee: not more than 4% p.a.
Currency: tenge
Leasing advance payment: 30% of the value of the object of the leasing contract
 
State support for manufacturing of helicopters 'Eurocopter'
Mechanism: signed contract between DBK and 'BRK-Leasing' as a first step. The parameters of the the agreement between them include:

Total limit of the financing: 10 billion tenge (ca. 54 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 0.25% p.a.
Currency: tenge
On a second stage 'BRK-Leasing' provides financial support under the following conditions:

Lessor: 'BRK-Leasing'
Lessee: airline company 'Kazaviaspas' or other companies that fulfil the requirements of 'BRK-Leasing' (not disclosed in this decree).
Manufacturer: 'Eurocopter Kazakhstan Engineering'
Total leasing limit: 10 million tenge (ca. 54 million USD)
Leasing contract maturity: 20 years
Nominal leasing fee: not more than 4% p.a.
Currency: tenge
 
State support for the production of passenger cars
The parameters of the the financing provided by DBK to the company Temir Zholi (Kazakhstan's National Railway Company) are:

Total limit of the financing: 5 billion tenge (ca. 27 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 2% p.a.
Currency: tenge
 
State support of exporters
An explicit condition for state financing is export of domestically-produced goods and import of products for circulation in Kazakhstan's processing industry. Both credits and leasing deals are to be executed under the following conditions:
Total limit of the financing/leasing: not mentioned for individual deals but as a global sum of 35 billion tenge (ca. 189 million USD) for 2015 and 15 billion tenge for 2016 (ca. 81 million USD).
Credit contract maturity: 20 years
Nominal interest rate: not more than 6% p.a.
Currency: tenge.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

AFFECTED SECTORS

 
Inception date: No inception date

Trade finance

On 23 April 2015 the Government of Kazakhstan approved Decree No. 271. It constitutes a between the Government of Kazakhstan and the National Bank of Kazakhstan for financing of domestic producers and exporters. The financing of the mentioned beneficiaries is to be performed through the 'Development Bank of Kazakhstan' (DBK) and its daughter company 'BRK-Leasing' in the period 2015-2016. The state support is to be either in the form of leasing or loans.
Decree No. 271 outlines three direction of state support, namely:

  • State support of domestic automakers;
  • State support for the production of passenger cars;
  • State support of exporters.

 
State support of domestic automakers
Financing

Mechanism: signed agreement between DBK and commercial banks as a first step. The parameters of the allocated credits by the commercial banks as a second step are:

Total limit of the financing: 15 billion tenge (ca. 81 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 1% p.a.
Currency: tenge
 
Leasing
Mechanism: signed contract between DBK and 'BRK-Leasing' as a first step. The parameters of the the agreement between them include:

Total limit of the financing: 5 billion tenge (ca. 27 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 0.25% p.a.
Currency: tenge
On a second stage 'BRK-Leasing' acquires vehicles (except for agricultural machinery and appliances) from local manufacturers (hence, in addition to bail-out features, it contains a localisation requirement as per the GTA criteria, although no concrete percentage of local content is mentioned.)
Total leasing limit: not mentioned
Leasing contract maturity: from 3 to 5 years
Nominal leasing fee: not more than 4% p.a.
Currency: tenge
Leasing advance payment: 30% of the value of the object of the leasing contract
 
State support for manufacturing of helicopters 'Eurocopter'
Mechanism: signed contract between DBK and 'BRK-Leasing' as a first step. The parameters of the the agreement between them include:

Total limit of the financing: 10 billion tenge (ca. 54 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 0.25% p.a.
Currency: tenge
On a second stage 'BRK-Leasing' provides financial support under the following conditions:

Lessor: 'BRK-Leasing'
Lessee: airline company 'Kazaviaspas' or other companies that fulfil the requirements of 'BRK-Leasing' (not disclosed in this decree).
Manufacturer: 'Eurocopter Kazakhstan Engineering'
Total leasing limit: 10 million tenge (ca. 54 million USD)
Leasing contract maturity: 20 years
Nominal leasing fee: not more than 4% p.a.
Currency: tenge
 
State support for the production of passenger cars
The parameters of the the financing provided by DBK to the company Temir Zholi (Kazakhstan's National Railway Company) are:

Total limit of the financing: 5 billion tenge (ca. 27 million USD)
Credit contract maturity: 20 years
Credit fee: not more than 2% p.a.
Currency: tenge
 
State support of exporters
An explicit condition for state financing is export of domestically-produced goods and import of products for circulation in Kazakhstan's processing industry. Both credits and leasing deals are to be executed under the following conditions:
Total limit of the financing/leasing: not mentioned for individual deals but as a global sum of 35 billion tenge (ca. 189 million USD) for 2015 and 15 billion tenge for 2016 (ca. 81 million USD).
Credit contract maturity: 20 years
Nominal interest rate: not more than 6% p.a.
Currency: tenge.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.