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Investment projects worth over USD183 million with participation of German capital implemented in Kazakhstan in 2018

12th meeting of Kazakhstan-German Intergovernmental Working Group on Trade and Economic Cooperation took place in Berlin.

For the first time, the basic organizer of this important event from the Kazakhstan side became the Ministry of Foreign Affairs of the Republic of Kazakhstan that since the end of 2018 has been assigned with the issues of attracting foreign investments as well as supporting Kazakhstan export abroad.

Kazakhstan’s delegation is chaired by Ermek Kosherbayev, the Deputy Minister of Foreign Affairs - Co-Chairman of Kazakhstan side of the Intergovernmental Working Group (IWG), while German’s delegation is chaired by Eckhard Franz, German Deputy Federal Minister for Economic Affairs and Energy, Co-Chairman of German side of IWG.

The event considered issues of investment climate and economic conjuncture in Kazakhstan and FRG. Heads of delegations expressed interest in strengthening trade, economic and investment cooperation. The sides reached a principle agreement to develop and sign a high level project of the Road map as soon as possible that would systematize economic areas of cooperation between the countries and aim to implement targeted projects across real sectors of the economy.  

This important document will be a starting point for a new stage of the bilateral cooperation aimed at supporting the modernization of the Kazakhstan economy, attracting advanced German technologies and producing Kazakhstan’s goods with a high degree of processing.

In addition, the meeting of IWG considered issues of bilateral trade and economic cooperation between Kazakhstan and Germany, in the field of development of energy and energy efficiency, renewable energy sources, ecology, agriculture, industry, technology transfer, transport and logistics, housing and public utilities, healthcare, education, tourism and cooperation in sphere of intellectual property protection. In 2018, Kazakhstan implemented 4 investment projects with participation of the German capital worth over USD183 million in the fields of trade, industry and renewable energy sources (RES). Due to the implementation of these projects we created about 400 new jobs.

Co-Chairmen of IWG briefed participants of the meeting on the current economic situation in their countries in the context of current political events, and also actual development of economic and its challenges arising from the trading wars. Against the backdrop of turbulence in the world markets and protracted sanction policy of a number of leading players, the sides highlighted the significant increase in trade turnover between Kazakhstan and Germany in 2018. In addition, more than 90 % of German investments into Kazakhstan economy directed to the non-primary sector including the processing and chemical industries, building materials production and agro-industrial complex.

The Co-Chairman of Kazakhstan side of IWG noted that Germany is one of key political and leading trade and economic partners of Kazakhstan in the EU, and also one of the priority countries representing Kazakhstan long-term export interest.

Ermek Kosherbayev informed German partners about priorities of the state policy in attracting investments, directed to creating a favorable investment climate, improving the investment infrastructure and ensuring cooperation with foreign investors. In this context, he proposed making maximum efforts to implement large-scale joint investment projects and expand production activities of German companies in Kazakhstan.

«Today, we are modernizing our investment attraction ecosystem. The investment climate will meet the Organization for Economic Co-operation and Development (OECD) standards. We will develop a chain of interaction from embassies abroad to local executive agencies. We are ready to make every effort for our joint investment projects and potential proposals for localizing production in Kazakhstan», - the head of the Kazakhstan delegation said.

In turn, Kazakh Invest of the Ministry of Foreign Affairs of the Republic of Kazakhstan, being the chief-negotiator on behalf of the Government of the Republic of Kazakhstan, informed investors of measures of the state support and progress tracking of investment projects, presented the company's project package to German investors.

«Our pipeline includes 174 projects worth almost USD40,1 billion with participation of foreign investors. These are mainly projects in the agroindustrial and mining-metallurgical complexes, oil-gas-chemistry, mechanical engineering, infrastructure and trade. The company, with representatives abroad and in the regions, provides a full range of services for the investment projects from an idea up to its implementation and in the post-investment period, according to the single window principle», R.Isatayev, the Vice-Chairman of the Board of Kazakh Invest JSC said.

The head of the German delegation, in turn, highlighted the role of Kazakhstan as a major partner of Germany in the region, highly appreciated dynamic development of trade, economic and investment cooperation between two countries, and also underlined permanent interest of German business in the market of Kazakhstan. He said that removing barriers opens up new opportunities for increasing cooperation between the countries in the areas of economy and investment.

«Our relations have a large, not yet fully used potential, as well as niches that we can fill with specific content. For us, Kazakhstan is the key and most important partner in the Central Asia. The German economy is interested in participation in the modernization of the Kazakh economy and is ready to make its own contribution in this direction» - Eckhard Franz said.

It is necessary to note that in 2019 the sides intend to implement the joint project with Tönnies German firm on meat processing and food production (an annual turnover of 6,3 billion euro). This company will invest in the creation of a full technological chain of a meat processing plant that includes a feedlot, meat processing facility and distribution centres.

Negotiations are underway with the Sun Farming and Prisma Solar companies to build renewable energy facilities

Also, as part of bilateral meetings, the German company intends to build a joint waste processing plant in Zhambyl region, a potential partner of the German company may be a local company Ecozher Ltd (Taraz city).

The 50-million euro (USD56 million) operation will process 150,000 tons of municipal solid waste per year and generate up to 5 MW/h  of electricity. The construction and operation of the facility will create 80 jobs.

Besides, in Berlin the Kazakhstan delegation met with the management of CLAAS company, one of leading producers of agricultural machinery. Following the negotiations, the German side agreed to create agricultural machinery production in Kazakhstan, as well as to develop the plan of the joint project implementation. The important achievement is the arrangement that CLAAS company would select Kazakhstan enterprises for 30 % location in the fifth year after the production opening.

Furthermore, the Kazakhstan delegation carried on negotiations with deputies of the German Bundestag, with the leadership of the German Eastern Business Association and the German Economic Promotion Association. The delegation participated in a study visit to the Berlin Adlershof Science and Technology Park, which brings together over 500 companies and research institutes in photonics and optics, RES and biotechnology.

The outcome of the IWG meeting demonstrated the beginning of a qualitatively new stage of economic cooperation between the two states and the readiness of the sides in the progressive and large-scale implementation of specific economic projects that would be reflected in the cooperation Roadmap being developed by the sides for the coming years.

Let's remind that IWG is the basic body coordinating trade and economic cooperation between Kazakhstan and Germany and is to conduct regular partnership dialogue at the intergovernmental level.