World Monitor Magazine Summer Issue - Page 46

EXPERT OPINION

Public-private partnerships and investment projects in Kazakhstan . Which one to go for ?

The number of companies in Kazakhstan with foreign participation has grown 12 % this year alone to 21.7 thousand by the start of autumn . Of these , 97.3 %, or 21.1 thousand are small businesses ; 1.5 % ( 325 companies ) are medium-sized business and 1.2 % ( 260 companies ) are large businesses , with the majority of them from Russia , Turkey and China . Even though the pandemic has undoubtedly affected project numbers , there does still seem to be investor interest in Kazakhstan , especially in projects offering state concessions and preferences .
Olessya Kirilovskaya , Tax and Legal Department Director , Deloitte
Dariga Tokpayeva , Tax and Legal Department Senior Manager , Deloitte
With that in mind , renewable energy projects , which are popular across the globe , have recently caught the eye of investors due to the wealth of opportunities offered for sector development in Kazakhstan . Investment projects and objectives
In Kazakhstan , the following types of investment projects are available :
• investment projects
• priority investment projects (“ PIP ”);
• special investment projects (“ SIP ”);
• public-private partnerships (“ PPP ”).
In this article we discuss the specifics of each type of investment project .
INVESTMENT PROJECTS
Officially , an investment project represents a series of measures to invest in :
• the creation of new production 2 ; and / or
• the expansion of current production 3 ; and / or
• the upgrading of current production 4 .
PRIORITY INVESTMENT PROJECTS
PIP are used to :
• create new production , stipulating investment in the construction of new production facilities of at least two million times the monthly calculation index (“ MCI ”);
• expand and / or upgrade current production , stipulating investment of at least five million times the MCI ;
• realise projects involving priority activities as approved by the Kazakhstan Government ;
• carry out projects for which investment is not made through PPP contracts or concession contracts .
SPECIAL INVESTMENT PROJECTS
SIP criteria include :
• implementation by a Kazakhstan company registered in a special economic zone (“ SEZ ”) or as a free warehouse owner ; or
• a project acquired from an SEZ member , or
• a project of a Kazakhstan company that has entered into a vehicle assembly agreement .
By law , PPP projects cover all areas of the economy except for those in a special government-approved list 5 . PPP targets include property and property portfolios planned , built , created , reconstructed , upgraded and operated within the framework of a PPP project , as well as work and innovations to be implemented during a PPP project . 6 world monitor