Kazakhstan ratifies protocol to fund EAEU joint industrial projects
ASTANA. May 28 (Interfax) - Kazakh President Kassym-Jomart Tokayev has signed into law a bill ratifying the protocol amending the Treaty on the Eurasian Economic Union (EAEU) dated May 29, 2014 aimed at providing financial assistance for joint industrial projects of EAEU member states.
The document is aimed at expanding cooperation between companies of EAEU member states, encouraging the growth of mutual investments and increasing the amount of jointly manufactured goods.
Earlier, Kazakh Industry and Construction Minister Kanat Sharlapaev said that businesses of EAEU member states noted the need for additional assistance instruments. The new format of funding will allow to implement large industrial projects and enhance mutual investments.
"This is a pilot financial assistance mechanism. It will run for five years. It may be prolonged if the member states do not object. The source of funding is 10% of the total budget revenues of the member states from special, anti-dumping, and compensation duties," Sharlapayev said.
The protocol establishes a subsidy limit of 1.890 billion tenge per project annually, or 9.450 billion tenge over five years.
The Eurasian Economic Commission allocate the funds to national financial institutions and the Eurasian Development Bank, covering 100% of the basic rate set by national banks. The commercial loan interest rate must not exceed 6.5% of the basic rate.
Fifteen financial organizations, including 11 commercial banks and four subsidiaries of Baiterek Holding, such as the Development Bank of Kazakhstan, the Damu Fund, the Industrial Development Fund, and the Qazaqstan Investment Corporation, may join the mechanism.
Selection criteria for cooperation projects require the participation of companies from three or more member states, involvement of other countries through supply chains or investments, and production of goods originating in member states, with project durations not exceeding five years.
Applications are accepted continuously, with the Eurasian Economic Commission reviewing them twice a year, before April 1 and October 1.
The official exchange rate is 442.84 tenge to $1.
