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Kazakhstan's AIFC to bring more revenue to state budget by project co-funding

7 July 2020 17:46 (UTC+04:00)
Kazakhstan's AIFC to bring more revenue to state budget by project co-funding

By Trend

Kazakhstan’s Astana International Financial Center (AIFC) is planning to maintain sustainability of companies registered in its jurisdiction during and after COVID-19 pandemic, AIFC official told Trend.

The official said that current circumstances demonstrate the importance of the financial center as a well-established platform focused on strengthening financial stability, ensuring market integrity, protecting consumers and supporting financial markets.

"Initially, the AIFC was created in 2016 as an anti-crisis tool to develop Kazakh economy, diversify it, develop the capital market, and attract foreign investment into the country with the help of special jurisdiction based on the principles of English law," the official said.

Thus, presently AIFC Financial Services Authority (AFSA) is working closely with companies registered in the AIFC jurisdiction to assess the financial and economic consequences of the COVID-19 pandemic. AFSA decided to provide support measures to companies and the financial community so that they can prioritize their business and operational issues during business disruptions.

Also, Kazakh government created the Kazakhstan Investment Development Fund Ltd.(KDIF) in the AIFC.

"All decisions on investing in projects are made by the Kazakh government, the KDIF Board of Directors is headed by Kazakhstan’s Prime Minister Askar Mamin. KDIF registration at the AIFC allows attracting foreign business for a partnership more effectively," the official said.

The official noted that the KDIF received an additional capitalization of 35 billion tenge ($88.2 million).

"These funds will be used to fulfill the obligations of KDIF for financing joint projects with foreign investors. All KDIF projects are in the non-commodity sector, i.e. the agricultural sector, tourism and the development of regional infrastructure," the official said.

The majority of the projects are being implemented in Akmola, Almaty, Mangistau and Turkestan regions. Total volume of foreign direct investment on these projects is about $155 million, all of them are implemented on the principles of co-investment.

Talking the effect of support measures offered by AIFC, the official expressed hope that Kazakh government uses the AIFC as a tool for economic development, and will achieve its goals with the help of KDIF.

"Tax revenues to the budget will be 6.1 billion tenge ($15.3 million) per year by 2025 after the mentioned above projects are implemented and commissioned," the official said.

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