UPDATE 1-Kazakhstan eyes $2.2 bln in loans for large projects

Mon Jan 30, 2012 1:30am EST

(Adds details, background)

By Raushan Nurshayeva

ASTANA Jan 30 (Reuters) - Kazakhstan plans to borrow about $2.2 billion this year from external markets to fund a series of projects, including a transport corridor from China to Europe, its finance minister said on Monday.

Bolat Zhamishev told a government meeting that state-owned corporations would probably set a benchmark for foreign borrowing before the state itself would consider issuing a Eurobond or Islamic bond.

"We don't have any need to plug a budget deficit right now," Zhamishev said. "The issue of Eurobonds or sukuk depends on the market and the external borrowing plans of the corporate sector, so we are monitoring the situation on world financial markets."

President Nursultan Nazarbayev, who has ruled Kazakhstan since before independence from the Soviet Union in 1991, used his annual state-of-the-nation address on Friday to unveil a series of major industrial projects.

He said Kazakhstan would become "a gigantic construction site" as the world faced a second wave of economic crisis and that the country would draw on its $44 billion National Fund for collecting windfall oil revenues to help finance projects.

Zhamishev identified construction of the Kazakh section of a road to link western China with western Europe as a major project that would require financing this year, as well as an upgrade to the transportation system in the capital Astana.

Nazarbayev also identified the China-Europe transport corridor as a major project, as well as construction of a $2.3 billion power plant, a $6.3 billion petrochemical complex and a $1.7 billion upgrade to an oil refinery near the Caspian Sea. (Writing by Robin Paxton; Editing by Ramya Venugopal)