Kazakhstan is drawing foreign direct investment, even as global FDI flows slow. Here’s how:
FDI in Kazakhstan is slowing, but multibillion-euro deals are still landing. Officials call the shift cyclical, not a sign of waning investor confidence.
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00:00Industrial investors, international companies who want to invest in Kazakhstan.
00:05Really, this business environment is very friendly and it's a good background and environment to grow the business in Kazakhstan.
00:15Kazakhstan, Central Asia's top investment hub, has attracted nearly 130 billion euros in net FDI since 1991.
00:31But last year saw a 30% drop from over 20 to 14.5 billion euros.
00:36According to the UN Conference on Trade and Development, FDI flows fell globally 11% due to geopolitical tensions, trade fragmentation and rising financial risks.
00:47In Kazakhstan, the drop in investment is tied to oil giants, Kashagan, Karachaganak and Tengiz, repatriating profits to shareholders.
00:56The Foreign Affairs Ministry says the shift from investment to returns is cyclical and does not signal declining confidence.
01:06Onktad recognizes Kazakhstan for streamlining investment regulation, especially through digital licensing and fast-track procedures.
01:35Despite the FDI's slowdown, it secured four of Central Asia's five largest greenfield projects worth 6 billion euros.
01:42Its sovereign wealth fund, Samru Kazana, remains a key driver of foreign investment.
01:47We usually take a minority stake. We don't get involved into the operational issues.
01:53But we provide full support with the government authorities on the central and regional levels.
01:59And if needed, we provide off-takes from our portfolio companies.
02:03And this model has proved it to be successful.
02:07At the moment, we are under execution of more than 130 investment projects for the full value of more than 102 billion US dollars.
02:16One of Samru Kazana's key partners, French multinational air liquid, is supplying industrial gases to its petrochemical and refining industries.
02:24Since 2016, the company has doubled its investment, adding another 100 million euros to the 120 million already committed with more expansion ahead.
02:33Growing in the country, we see a lot of opportunities, of new opportunities in the refining sector, in the petrochemical sectors,
02:41maybe in the metal industry and in other industrial sectors, manufacturing and the like, where we can supply industrial gases.
02:48So for our home company in Paris, it's important not only for what we've achieved already,
02:53but also for the potential that Kazakhstan has in terms of economic development and industry overall growth potential in the industrial sectors.
03:05Another partner is Fortune 500 American company Wabtec, which is supplying critical components, locomotives, signaling systems, and logistics solutions for the global railway industry.
03:15Wabtec has invested more than 196 million euros since 1996.
03:20I think we have the opportunity to grow our business in Kazakhstan, double digits per year.
03:27A piece of it is making sure we drive organic growth into other parts of the rail ecosystem.
03:35We are continuing to do acquisitions in our company, and that will allow us to ultimately grow the content of what we sell into the rail business here in the country.
03:48Kazakhstan's largest FDI has gone into mining, nearly 80 billion euros, followed by 35 billion in manufacturing and 7 billion in insurance.
03:57Top investors over the past decade include the Netherlands, the US, Switzerland, Russia, and China.
04:03To boost its appeal, Kazakhstan offers tax breaks, customs exemptions, and infrastructure support.
04:08The president chairs the Foreign Investment Council, where foreign investors can directly propose policy and development recommendations.
04:14And that open discussion, I really think, adds to clarity, and from clarity you have stability.
04:23And I think coming at this from the legal perspective, one of the things that businesses are always looking for in investment is things such as stability and regulation,
04:36and having guidance as to how the investment opportunities will evolve over time.
04:42Despite global challenges, Kazakhstan draws over half of Central Asia's FDI and a large share of its output.
04:48As the region's largest economy, it continues building a strong investment climate, digital economy, and partnerships for industrial growth.
