Finance mobilized in Kazakhstan by AIIB to address infrastructure shortfall
Rewritten Article:
Gettin' that dough: It's Crunch Time to Bridge Asia's Infrastructure Financing Gap, Says Panel
ASTANA - Pulling in private investments is crucial to tackling Asia's mind-boggling trillions of dollars infrastructure financing deficit, according to experts from development banks, investment firms, and government agencies, who gathered at a talk organized by the Asian Infrastructure Investment Bank (AIIB) and Kazakhstan's Ministry of National Economy on April 29 at the Astana International Financial Centre (AIFC).
From left to right: Akzhol Urazalin, Evgeniya Bogdanova, Zamira Sundetova, Asim Rana, Nikoloz Gagua, Wang Xianming. Credit: Nagima Abuova / The Astana Times
Kazakhstan's infrastructure development vision
The event kicked off with comments from Konstantin Limitovskiy, a chief investment officer at AIIB, who joined virtually to restate Kazakhstan's significance in the bank's portfolio. He pointed out that Kazakhstan, an original AIIB member, has received over $2 billion in investments across seven major public and private sector projects.
"These are the roads that bring communities together, renewable energy that lights up homes, and hospitals that provide critical care. Kazakhstan's strategic placement as a major traffic and trade hub aligns with our mission to spur international connectivity," said Limitovskiy.
He underlined AIIB's role in projects aligned with Kazakhstan's goal of achieving carbon neutrality by 2060.
"We've added 420 megawatts of green energy so far," he said, pointing out ongoing wind farm developments and the groundbreaking financing of Kazakhstan's first hospital under its public-private partnership (PPP) law.
He also spotlighted railway bypass projects and infrastructure initiatives designed to eliminate trade obstacles, boost regional connectivity, and increase access to essential services. "Together, we're mobilizing public and private capital to invest in projects that are transformative and sustainable," he said, inviting stakeholders to the AIIB's 10th annual meeting in Beijing this June.
Government priorities: diversification and off-budget funding
Vice Minister of Transport Talgat Lastayev emphasized Kazakhstan's dedication to crafting a modern, cutting-edge transport network, backed by state development programs that extend through 2030.
"Over 4,000 kilometers of roads are planned for reconstruction and construction, costing more than $15 billion," he said. "Sustainable infrastructure development and the switch to clean energy are key components of Kazakhstan's national strategy."
Lastayev laid out priority transport corridor projects such as the Karagandy-Zhezkazgan and Aktobe-Karabutak-Ulgaisyn routes, and shared updates on upcoming co-financing agreements with the World Bank and European Bank for Reconstruction and Development (EBRD).
Expanding investment tools and partnerships
Evgeniya Bogdanova, CEO of the Astana Financial Services Authority (AFSA), broadened the discussion to stress the importance of sustainability in capital markets.
Evgeniya Bogdanova, the CEO of the Astana Financial Services Authority (AFSA). Credit: Nagima Abuova / The Astana Times
"Infrastructure isn't just about constructing assets—it's about creating opportunities. We must engage private capital in a significant way through the right regulatory frameworks, risk mitigation tools, and market-based incentives that reward sustainability," she said.
Bogdanova stressed that the public sector can't bridge the infrastructure gap alone. Securing private capital requires regulatory certainty, risk mitigation tools, and financial instruments tailored to long-term investor goals.
She noted that AFSA is expanding the financial landscape for sustainable products and environmental, social, and governance (ESG) instruments.
"The role of multilateral development banks like AIIB is indispensable," she said, citing their ability to link public development needs with private sector execution.
Bringing in Private Sector Capital
Asim Rana, AIIB's manager for financial institutions and funds clients, walked the audience through the bank's strategies to gather private capital, which he described as a top strategic priority.
Beyond direct investments in roads and solar farms, Rana said the bank collaborates with financial intermediaries, such as banks and asset managers, to amplify impact. He explained how AIIB supports on-lending facilities, where capital is channelled through local banks to fund multiple infrastructure projects under strict environmental and social standards.
He highlighted the creation of Bayfront, a collateralized loan obligation (CLO) vehicle launched in Singapore, as well as similar initiatives in Hong Kong that bundle infrastructure loans into tradable securities.
"We established a market for securities that are quite hard to establish in Asia," he said, noting that these innovations help recirculate capital and boost liquidity in the sector.
Rana also added that making infrastructure projects financially viable is essential to attracting institutional investors. "Infrastructure is a lengthy asset class. It demands patience, but it certainly calls for returns," he said.
He highlighted that gathering private capital for long-term infrastructure projects involves stringent checks on environmental, social, and credit factors to demonstrate the project's viability and sustainability.
Kazakhstan's development agenda and challenges
Providing context, Akzhol Urazalin, a deputy director of the International Economic Cooperation Department at the Ministry of National Economy, noted that Kazakhstan has seen a steady economic growth of 4.8% in 2024, primarily driven by agriculture, transportation, and manufacturing.
He noted that Kazakhstan's national infrastructure plan, running from 2029, amounts to approximately $80 billion and includes over 200 projects across the energy, transport, digital, and sanitation sectors.
"Around 90% of the funding is expected to come from off-budget sources," he said.
Urazalin also highlighted the importance of public-private partnerships, mentioning ongoing reforms to boost transparency, tax policy, and institutional frameworks. However, he pointed out that obstacles remain in long-term financing for the private sector and in building robust legal mechanisms for PPPs.
"We're working on developing and implementing flexible risk-sharing models between the government and the private sector, to promote the use of green financial instruments," said Urazalin.
Investment philosophy: lean, green, and clean
Zamira Sundetova, SkyBridge Invest CEO, offered a private sector viewpoint on how asset managers contribute to long-term infrastructure development.
"At SkyBridge Invest, we not only act on behalf of our clients—we also facilitate complex infrastructure transactions," she said during the discussion. "Our government has pledged carbon neutrality by 2060, and we're doing our best to reach that goal."
She also underscored surging interest in renewable energy and digital infrastructure, specifically fiber optics and 5G, driven by national priorities and rising regional demand.
"Sustainability, financial resilience, and environmental impact are among the most significant factors when choosing a project for the long term," Sundetova informed The Astana Times.
She suggested that Kazakhstan consider setting up a joint infrastructure investment fund, inspired by the Three Seas Initiative in Europe.
Commercial banks as ecosystem creators
Wang Xianming, a senior executive officer at China Construction Bank's (CCB) Astana branch, highlighted the bank's $1 billion investment in Kazakhstan since its 2019 entry, with a focus on gas, solar, and wind infrastructure.
"In supporting infrastructure development, commercial banks can mainly serve three roles. The first one is financing supporter, the second is risk manager, and the third is ecosystem builder," said Wang.
Wang described how CCB has developed green finance structures, reduced financing costs through cross-border cooperation, and syndicated loans in collaboration with multilateral banks. He emphasized the need for greater collaboration among banks, asset managers, insurers, and government entities to establish diverse financing systems.
"This innovative collaboration not only leverages our project evaluation expertise but also integrates the capabilities of various financial institutions," he said.
- The need for private investments is crucial in addressing Asia's infrastructure financing deficit, as discussed by experts from various sectors at the event organized by the Asian Infrastructure Investment Bank (AIIB) and Kazakhstan's Ministry of National Economy.
- In Kazakhstan's vision for infrastructure development, sustainability and the private sector play significant roles, with Evgeniya Bogdanova, CEO of the Astana Financial Services Authority (AFSA), stressing the importance of engaging private capital in infrastructure projects through suitable regulatory frameworks, risk mitigation tools, and financial instruments tailored to long-term investor goals.
