ALMATY, KAZAKHSTAN, November 9, 1998 ---
The International Finance Corporation today signed financing agreements
for a US$900,000 loan and an equity investment of $250,000 to help the
Kazakhstan Construction Company (KCC) to improve the quality of its products
and expand its production to meet the growing local demand for construction
Kazakhstan, the largest country in Central Asia, has attracted $3.5 billion
in foreign direct investment, primarily due to its huge oil reserves. The
commercial activity has led to strong demand for construction of new office
and residential buildings in Almaty, the country's business center. In
parallel, the relocation of the capital from Almaty to Akmola means that
there is a construction boom in that city too.
KCC will undertake a $2.6 million project to renovate existing machinery,
equipment, and buildings and install new machinery and equipment. The project
will also expand the company's existing production line for concrete slabs,
pavement blocks, and hollow blocks.
IFC will help modernize KCC by introducing new management and technical
practices, including accounting and information systems. As part
of the project, KCC will adopt international standards and establish environmental
standards that meet local and World Bank guidelines.
The financing agreements were signed in Almaty by Mr. Maulen Maratbekov,
General Director of Kazakhstan Construction Company and Mr. Jemal-ud-din
Kassum, IFC Vice President of Investment Operations.
Mr. Kassum said the project will benefit the economy of Kazakhstan through
employment of about 90 construction workers, the fuller use of underemployed
land and buildings, and lower prices for the company's products. He
said it would also spawn small and medium sized enterprises, which the
Government of Kazakstan and IFC have set as a priority.
As of June 30, 1998, IFC's investment portfolio in Kazakhstan amounted
to $124.1 million. In the fiscal year ending in June, IFC approved $93.27
million for six projects in Kazakhstan.
The project is a part of the "Extending IFC's Reach" initiative,
a three-year pilot program that promotes private investment in countries
where difficult conditions have hampered investment. IFC, part of the World
Bank Group, fosters growth in the developing world and in emerging economies
by financing private sector investments, mobilizing capital in the international
financial markets, and providing technical assistance and advice to governments