By Patrick Gill
PROJECT FINANCE IN the strict sense of the term has not yet developed in Kazakhstan but this is expected to change as the market grows. Despite the lack of pure project finance, with the establishment of a special purpose vehicle, companies have no shortage of financing options for their investment needs. Bank loans, bond issues and initial public offerings are tried and tested ways of raising capital that have served Kazakh companies well. Part of the reason why project finance has not taken off is that the Kazakh banking sector is well enough developed to offer cheaper alternatives. With a diversifying economy and an improving legal framework, there is the potential for larger-scale, classic project financing, bankers say.
“We have seen very little true project financing, where the financing structure was based on the performance of the project itself,” says Jurgen Rigterink, head of ABN Amro in Kazakhstan....
