Azernews.Az

By Aynur Jafarova

The European Bank for Reconstruction and Development (EBRD) and the National Bank of the Republic of Kazakhstan signed two agreements which enable the EBRD to dramatically increase local currency lending, the bank reported on May 21.

"The institutions have signed two facilities which will enable the EBRD to source up to US$ 1 billion in tenge from the NBRK for on-lending to Kazakh financial institutions, municipalities and corporates," the bank said.

The two facilities will be an amended repo agreement for $400 million equivalent and a swap framework agreement for $600 million equivalent, the latter being provided over a three-year period.

The agreements were signed during the Astana Economic Forum by the head of Kazakh National Bank Kairat Kelimbetov and EBRD Managing Director Olivier Descamps.

"Our strategic priorities in Kazakhstan focus on diversification, development of the regional infrastructure and strengthening the role of the private sector. These priorities require us to lend more to local businesses in local currency," Descamps said.

Thanks to the agreements, the EBRD will be able to increase lending for projects with Kazakh banks, non-banking financial institutions and corporate clients, Kelimbetov said in turn.

"This will be especially important for micro and SME clients who need protection from foreign exchange risk," he added.

The EBRD has invested close to $6.5 billion in the country's economy since the beginning of its operations in Kazakhstan, with more than half of the bank's projects supporting the private sector.