China-kazakhstan Energy Cooperation Ushers in Great Opportunities
— An interview with Timur Malikov, the Director of the Representative Office to the PRC of the SAMRUK-KAZYNA
“The ‘Belt and Road’ initiative is a timely solution to the global political, economic and humanitarian crises of this century, and its successful implementation will bring tangible benefits to the world,” said Nazarbayev, President of Kazakhstan, in May 2017 when he attended the Round- Table leaders’ summit of the “Belt and Road” Forum for International Cooperation in Beijing.
As an important gateway connecting Asia and Europe, Kazakhstan has also benefited from the “Belt and Road” initiative. Joint-stock Company National Welfare Fund SAMRUK-KAZYNA Director in China, Timur Malikov, introduced a series of projects during a recent interview with China’s Foreign Trade, which witnessed achievements by economic and trade cooperation between the two countries. Powerful players encourage cooperative projects between China and Kazakhstan
It is reported that the SAMRUKKAZYNA manages these large state-owned enterprises and financial development agencies, coordinates national key projects and investment projects, and accumulates revenue to deal with the international financial crisis. In fact, it controls the real economy of Kazakhstan.
Timur Malikov said, the “Belt and Road” initiative contributes greatly t o t he SAMRUK- KAZYNA. Under the framework of the “Belt and Road” initiative, the China National Development and Reform Commission and the Kazakhstan Investment and Development Ministry jointly prepared the “China- Kazakhstan Production Capacity Cooperation and Investment Planning”, and concluded agreements for 54 projects. Most of these projects are located in Kazakhstan and 20 of them are owned by the SAMRUK-KAZYNA, including power stations, chemical fiber plants, mining and so on. In addition, the SAMRUK-KAZYNA works in cooperation with the Silk Road Fund, the China National Development Bank, the China Export-import Bank and the Asian Infrastructure Investment Bank, to fund Chinese companies that invest in Kazakhstan, since most of whom make investments through loans. Last year, the SAMRUK-KAZYNA and the Silk Road Fund reached projects of USD 8 billion.
“We look forward to diversified investments and economic and trade cooperation between the two countries, especially in the fields of intelligence, mining, chemical industry and raw material processing.” Timur Marikov said, “China has a great demand gap in electric power, and Kazakhstan intends to export electricity to China, but the cooperation in this sector is limited, since such projects are complex and there is a lack of investment. As for now, the Kazakhstan National Fund is actively boosting cooperation with the China National Energy Administration.”
The theme for the China Pavilion at the Astana Expo 2017 is “Future Energy, Green Silk Road”. Timur Malikov mentioned although rich in natural resources, Kazakhstan is not a strong player in new energy, so it needs advanced technology from China for further development by cooperating on green power generating projects. Now, the SAMRUK-KAZYNA is working together with the China Three Gorges Corporation promoting cooperation on hydropower and wind power. Localization is a consideration when investing in Kazakhstan
According to Timur Malikov, Kazakhstan began the privatization of its state- owned enterprises in 2016, in hopes of reducing the proportion of state-owned enterprises accounting for 20% in 2019 from 40%. The SAMRUK-KAZYNA owns more than 600 affiliated state-owned enterprises. It is currently trying to sell some out and it welcomes foreign investors to take part in the privatization process, including Chinese enterprises.
“Kazakhstan implements many preferential policies for foreign-funded enterprises. As to chemical projects, we have constructed two economic development zones with comprehensive water and electricity, heating and other infrastructure, and Chinese companies operating there will be free of taxes for 20 years.” Timur Marikov said.
In addition, Timur Marikov also advises Chinese companies interested in investing in Kazakhstan to pay attention to “localization”, namely strictly following local standards, employing local people, and integrating with the local community. These measures can play an important role in promoting the development of enterprises there.
Timur Malikov revealed that a number of state-owned under SAMRUKKAZYNA company would attend the energy forum held on July 5 during Astana Expo 2017, looking forward to expanding and deepening the communication between China and Kazakhstan, and promoting bilateral economic and trade cooperation.