ALMATY, May 21 (Reuters) - The European Bank for Reconstruction and Development and Kazakhstan’s central bank signed deals on Wednesday allowing the EBRD to issue loans to Kazakh borrowers in the tenge currency for a combined equivalent of up to $1 billion.
“Our strategic priorities in Kazakhstan focus on diversification, development of the regional infrastructure and strengthening the role of the private sector,” EBRD Managing Director Olivier Descamps said in a statement after signing the agreements with Kazakh National Bank Governor Kairat Kelimbetov.
“These priorities require us to lend more to local businesses in local currency.”
The signing took place in the Kazakh capital Astana on the sidelines of the Astana Economic Forum.
Kelimbetov said the agreements with the EBRD will be “especially important” for micro- and small and medium-sized businesses which need protection from foreign exchange risk.
The two facilities signed include one which will make an equivalent of $400 million available to the EBRD via the central bank’s repo operations, and a swap framework agreement for an equivalent of $600 million.
Kazakhstan, Central Asia’s largest economy and the second-largest ex-Soviet oil producer after Russia, is trying to diversify its economy, which currently relies heavily on commodity exports, to lessen its vulnerabilty to global prices for raw materials.
The government views a more versatile economy as a key to sustaining robust economic growth, which last year accelerated to 6 percent from 5 percent in 2012.
Since the start of its operations in Kazakhstan, the EBRD has invested around $6.5 billion in the country’s economy, with more than half of its projects supporting the private sector. (Reporting by Dmitry Solovyov; Editing by Hugh Lawson)