Almaty. July 22. Information Center - The
members of China International Contractors Association (CHINCA) have offered a
system to attract investments into green projects originating from Central
Asia. The deals will be structured on the basis of the Astana International
Financial Centre (AIFC), that has become the office of the Belt and Road Green
Investment Principles initiative in Central Asia, Global Times reports.
The pandemic has shown that one of the main global priorities over coming years
should be the projects corresponding to the responsible investment principles
(ESG, Environmental, Social, Governance). The last five years have seen global
volume of green assets double reaching $40 trillion. This figure was voiced by
the participants of Astana Finance Days financial forum in Kazakhstan organized
by Astana International Financial Centre. At the forum, it was also announced
that with the support from CHINCA, special base of ESG-compliant projects has
been created. The base is accessible to a wide range of investors ready to
invest in this category of projects. During Astana Finance Days, CHINCA members
invited Kazakhstan companies to actively include their projects into the
database in order to attract Chinese financing into green projects.
Belt and Road Initiative becomes greener
The green finance market is one of the fastest growing segments of financial
market today: in 2016 its volume according to Bloomberg was estimated at $22.8
trillion, while now it has reached $40 trillion. "These are the
investments corresponding to the Green Investment Principles (GIP), developed
in London in 2017 involving among others China Green Finance Committee,"
said Cheng Lin, Director of the Centre for International Cooperation of the
Institute of Finance and Sustainability (IFS), Head of the Secretariat of the
Beijing Green Investment Principles (GIP) Office for the Belt and Road.
China is striving to develop the green finance market especially under the Belt
and Road project. To do so under the support of China International Contractors
Association which includes many large Chinese corporations, a special online
database was created allowing to find an investor for green projects from other
"We expect to have even more projects from Central Asia that will be able
to get financing as GIP members," Cheng Lin said.
He urged Kazakhstani companies to file requests if their activities correspond
to green standards.
Cheng Lin also stressed that Belt and Road Initiative (BRI) is one of the
largest sources of green investments and projects involving over 140 countries.
Creating the New Silk Way is one of the key BRI ideas, which would entail new
logistic routes and economic corridors between Central Asian countries, Europe
and Africa. This in turn will allow increasing the cargo delivery speed between
these regions and China and cut the delivery term by six times from 60 days to
10 days. Kazakhstan has become an important spot for the BRI in Central Asia,
first of all due to its geographic location: the main trade and transport
routes from China to Central Asia and Eastern Europe lie through Kazakhstan. It
is the Chinese cargo transit through Kazakhstan that became one of the main economic
growth drivers for the country during the pandemic. Industry growth was not
hindered even by the crisis-ridden 2020, on the contrary, the volumes of cargo
transportation from China have grown by 23 percent reaching 21.6 million tons.
Overall cargo transportation and oil transit provide Kazakhstan economy with
over $2 billion annually, according to Kazakhstan National Bank.
Notably Kazakhstan is one of the most active participants of the Belt and Road
projects in Eurasia. Throughout 2008 to 2018 the country has invested over $30
billion in creating the corresponding infrastructure. These funds also helped
to organize five new rail and six automobile routes to transport cargo from
China to Europe. The International Center for Border Cooperation Khorgos has
become one of the important projects that are realized under the BRI and the
state program of infrastructure development "Nurly Zhol". This new
dry port has become an entrance point for the Chinese goods being shipped to
Central Asia, Russia or Europe. Moreover, it should become a site to attract
investments from China. To do so, in the beginning of 2021 an agreement on
cooperation was concluded between Khorgos and AIFC, under which Khorgos is
viewed as a site to attract Chinese investments under the auspices of AIFC.
Being a free economic zone and offering favorable business conditions, Khorgos
has proven its value with about 30 investment projects being implemented with a
total worth over $258.6 million.
AIFC will ease the way for Chinese capital to promising projects in Eurasia
Chinese capital will be able to be invested in high potential projects in
Kazakhstan and other Eurasian countries through the AIFC platform, where all
the necessary conditions have already been created. These include opportunity
to place securities in yuan on the stock exchange (AIX, Astana International
Exchange). The Nur-Sultan branch of China Construction Bank (CCB Astana Branch)
came as the first issuer of yuan bonds placing 1 billion yuan of securities
denominated in Chinese currency in March 2020. The funds were used to finance
local infrastructure and Belt and Road projects in Kazakhstan.
"The listing of CCB Astana Branch bonds came as an important result of the
Kazakh-Chinese financial cooperation within the global BRI. This is a
significant milestone that will contribute to the further development of the
yuan settlement market in the AIFC, Kazakhstan and Central Asia," noted
AIFC Governor Kairat Kelimbetov on the occasion.
Today, the AIFC aims to become a regional settlement center for the Chinese
yuan in Kazakhstan. It was here where the BRI was first announced in 2013. The
AIX Belt and Road Market Segment is a marketplace where yuan-denominated
securities, including bonds, stocks and other products, can be listed and traded.
The AIFC expects a surge in the number of different issuers offering securities
in yuan, which will help to establish AIX as the main center for listing and
trading of securities denominated in yuan for Central Asian countries.
At the same time, the AIFC pays special attention to the development of green
financial instruments, with a special Green Finance Center established offering
help to any company preparing to issue green bonds in preparing the necessary
documents. This will cut the costs of preparing for listing by 30-50 percent
(legal, financial consulting, underwriting, etc.). The center will also help to
obtain a mandatory external review of green bonds confirming that the project
for which the green bonds are issued meets the "green" project
criteria. Without this external review, issuing green bonds is simply not
possible. Business from any country in the world registered with the AIFC can
receive support. At the same time, small and medium-sized enterprises from
Kazakhstan, Uzbekistan and Kyrgyzstan have additional preferences. As part of
the adoption of the Environmental Code of Kazakhstan, the AIFC introduced
drafts of accompanying norms in the Entrepreneurial Code of Kazakhstan,
specifying measures of economic stimulation for business to the use of green
loans and green bonds. This includes subsidizing credit and coupon rates for
the implementation of green projects. Currently, as part of the implementation
of these financial support measures, work is underway to introduce amendments and
additions to the Business Support and Development Program "Business
Roadmap-2025", through which the abovementioned mechanism will be
Thus, Kazakhstan aims not only to facilitate access to promising projects for
Chinese capital using the AIFC infrastructure and instruments, but also to
develop the green financing segment, as a result stimulating Belt and Road
projects to comply with the sustainable development principles.