Kyrgyzstan needs to make a lot of preparations to effectively use ACF investment loans
Moscow, 5 March 2014. A pool of applications from farms for agricultural equipment, which will be supplied to Kyrgyzstan under the investment project funded by the EurAsEC Anti-Crisis Fund (ACF), should be begun to be formed. Alexei Cherekayev, head of Eurasian Development Bank’s (EDB) Department for ACF Operations, stated this today at the meeting with Kyrgyz Minister of Agriculture and Land Improvement Taalaibek Aidaraliyev.
Alexei Cherekayev believes that this should help to determine the characteristics and the range of equipment to be supplied, establish on-hand control over the selection of applications and secure preferences for equipment suppliers from the ACF member states.
The EDB delegation in Bishkek focused on the issues of signing and bringing into effect financial agreements between EDB and the Kyrgyz Republic under two ACF investment projects.
In December 2013 the ACF Council decided to provide loans to the Kyrgyz Republic for the projects to finance agricultural equipment supplies to Kyrgyzstan (US $20 million) and reconstruct the Bishkek-Osh highway (Phase IV; US $60 million).
The former project envisages the supply to Kyrgyzstan of agricultural machinery, which can be provided to farmers for long-term lease. This is one of the acutest problems in Kyrgyzstan: over 90% of the country’s fleet of agricultural equipment is outdated and its demand for various types of machinery is estimated at tens of thousands of items.
The ACF loan is expected to help to solve this problem. EDB, as the ACF Resources Manager, will provide the loan for twenty years to the Kyrgyz Ministry of Finance. Over the first two years the ministry will distribute the loan through AiylBank among farmers in the form of sub-loans, which will be used to lease equipment. Since sub-loans will have a shorter repayment period, farmers are expected to lease equipment to the tune of US $120 million over twenty years. The Ministry of Finance will collect the interest paid on sub-loans in a special fund, which will be used to continue lending activities after the ACF loan, which will be provided on highly beneficial terms, is repaid.
The ACF is working with the Asian Development Bank (ADB) on the second project to reconstruct the Bishkek-Osh highway.
In the course of its current visit to Bishkek the EDB delegation took part in a joint mission with ADB and the Kyrgyz Ministry of Transport on this project. The sides discussed the preparation of procurement plans, relocation and protection measures in the area of construction.
Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. EDB’s charter capital exceeds US $1.5 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. Read more about EDB at http://www.eabr.org/
The EurAsEC Anti-Crisis Fund (ACF) amounting to US$8.513 billion was formed on 9 June 2009 by the governments of six countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The objectives of the ACF are to assist the member countries in overcoming the consequences of global financial crisis, ensure their economic and financial stability, and foster integration processes in the region. The ACF member countries signed the Fund Management Agreement with Eurasian Development Bank giving it the role of the ACF Resources Manager. Read more at http://efsd.eabr.org/
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