Baiterek Holding Signs Agreements Worth USD 870 Million with Germany

Chairman of the Management Board of National Investment Holding Baiterek Rustam Karagoishin continued his business program in Berlin as part of the official visit of President of Kazakhstan Kassym-Jomart Tokayev to Germany. He held negotiations with financial institutions and banks, took part in the Kazakhstan-Germany Business Forum, signed an agreement on the Qazaq Kalium project, and met with representatives of the KfW Group, Deutsche Bank and Euler Hermes.

The business events were also attended by Deputy Chairman of the Management Board of Baiterek Holding Timur Onzhanov, Chairman of the Management Board of the Development Bank of Kazakhstan Marat Yelibayev, and others.

Kassym-Jomart Tokayev proposed establishing a Kazakhstan-Germany Investment and Financial Platform that would bring together German and European capital with Kazakh co-financing, guarantees and risk-sharing mechanisms. Baiterek Holding will be responsible for structuring projects within the framework of this platform. The President also emphasized the importance of participation by German export credit and investment insurance institutions, specifically highlighting the importance of cooperation with Euler Hermes.

On the sidelines of the event, the Chairman held a working meeting with Michael Harms, Managing Director of the German Eastern Business Association and Co-Chairman of the Kazakhstan-German Business Council for Strategic Cooperation. The parties discussed further coordination of cooperation with German businesses and the promotion of joint projects.

Rustam Karagoishin signed an agreement to launch financing for a contract covering the design, equipment supply and construction of a mining complex based on the Satimola potash salt deposit in the West Kazakhstan Region. The contract is worth EUR 418.2 million. The document was signed between the Development Bank of Kazakhstan, Qazaq Kalium, and the consortium of Thyssen Schachtbau and Schachtbau Kazakhstan.

Qazaq Kalium is implementing a project to establish a potash fertilizer production complex with an annual capacity of 1.5 million tonnes. German company Thyssen Schachtbau specializes in the construction of mines and underground structures. The project will contribute to the development of mineral raw material processing and fertilizer production in Kazakhstan.

Long-term financing opportunities were discussed at a meeting with representatives of KfW IPEX-Bank, KfW Development Bank and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group. The KfW Group is Germany’s state-owned development finance institution, while KfW IPEX-Bank specializes in international project and export financing.

The negotiations covered projects in metallurgy, renewable energy and infrastructure, as well as opportunities to support small and medium-sized businesses through the Damu Fund.

The Development Bank of Kazakhstan and KfW signed a loan agreement of up to USD 200 million, guaranteed by MIGA, to finance renewable energy projects. The credit facility will provide financing for the construction of a 1 GW wind power plant with an energy storage system in the Zhambyl Region.

As part of the business program, key financing terms were also signed between the Development Bank of Kazakhstan and Aluminum of Kazakhstan, a producer of alumina, in the amount of USD 88 million. The document concerns the modernization of the Pavlodar Aluminum Plant and the establishment of gallium production. The final financing terms are subject to approval by the Bank’s authorized bodies.

A framework agreement between the Development Bank of Kazakhstan and German bank Helaba, amounting to up to EUR 52.5 million, provides for financing the construction of a sodium cyanide production plant in the Khimpark Taraz Special Economic Zone. The Industrial Development Fund and AKA, a German export and trade finance bank, signed a EUR 30 million loan agreement to provide leasing financing for projects.

At a meeting with Deutsche Bank, one of Germany’s largest banks, Rustam Karagoishin discussed expanding lending and trade financing for the Holding’s subsidiaries. The parties considered opportunities to attract new resources for Kazakh projects using guarantees from international financial institutions.

The negotiations with Euler Hermes, the operator of Germany’s state export credit guarantees, focused on insurance support for supplies of German equipment and improving financing terms. Particular attention was paid to the assessment of Kazakhstan’s country risk under the classification of the Organisation for Economic Co-operation and Development (OECD). An improvement in this category could help reduce the cost of insurance coverage and increase the availability of export financing for Kazakh enterprises.

The meetings with German financial institutions also covered opportunities for educational cooperation with Baiterek Business University (BBU), the corporate university of Baiterek Holding. The parties considered establishing a joint academy, exchanging knowledge and practical experience through a Know-How Exchange format, as well as regularly conducting joint seminars and training courses.

The results achieved and further cooperation with German partners are aimed at developing industrial production, modernizing enterprises and expanding Kazakhstan’s energy capacity.