Identifier
Created
Classification
Origin
08ASTANA1869
2008-09-25 02:27:00
UNCLASSIFIED
Embassy Astana
Cable title:  

KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, AUGUST 31 -

Tags:  ECON EIND ENRG EPET EFIN KTDB KZ 
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RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1869/01 2690227
ZNR UUUUU ZZH
R 250227Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3395
INFO RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE 0648
RUEHAK/AMEMBASSY ANKARA 2183
RUEHBUL/AMEMBASSY KABUL 0419
RUEHNE/AMEMBASSY NEW DELHI 0518
RUEHAST/USOFFICE ALMATY 0753
UNCLAS SECTION 01 OF 02 ASTANA 001869 

DEPT FOR SCA/CEN (O'MARA)
DEPT PASS TO OPIC - BALLINGER
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER
DEPT PASS TO AID - EE-PHILLIPS/RUSHING
TREASURY FOR OASIA/VELTRI
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS
USDOC FOR 6110/ITA/TD/BI/RHALPERN
ANKARA FOR CFC

SIPDIS

E.O. 12958: N/A
TAGS: ECON EIND ENRG EPET EFIN KTDB KZ
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, AUGUST 31 -
SEPTEMBER 13, 2008

ASTANA 00001869 001.2 OF 002


UNCLAS SECTION 01 OF 02 ASTANA 001869

DEPT FOR SCA/CEN (O'MARA)
DEPT PASS TO OPIC - BALLINGER
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER
DEPT PASS TO AID - EE-PHILLIPS/RUSHING
TREASURY FOR OASIA/VELTRI
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS
USDOC FOR 6110/ITA/TD/BI/RHALPERN
ANKARA FOR CFC

SIPDIS

E.O. 12958: N/A
TAGS: ECON EIND ENRG EPET EFIN KTDB KZ
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, AUGUST 31 -
SEPTEMBER 13, 2008

ASTANA 00001869 001.2 OF 002



1. Summary: This information is drawn primarily from the
Kazakhstani local press, and has not been verified for accuracy.

-- Kazyna Upgrades Legal Status
-- Samara-Uralsk Fiber Optic Line
-- German Technical Assistance to Help Labor Ministry
-- August Inflation
-- Kazakhstani Investment in Georgia
-- Kazakhstan Wants To Build Power Plant in Ukraine
-- KazMunayGas and Gazprom Neft In Joint Deal
-- Kazakhstan and China To Build Hydro Plant
-- Oil and Gas Discovery in West Kazakhstan

Kazyna Upgrades Legal Status
--------------


2. The Financial Supervision Agency (FSA) has awarded the Kazyna
Sustainable Development Fund status as a "financial agency."
According to the Law on Securities, a financial agency is a bank or
organization with the right to engage in limited forms of banking,
including the right to borrow from both domestic and international
capital markets to invest in priority development projects. This
new status will also allow Kazyna to take out loans from the
national budget. As a newly named financial agency, Kazyna now
possess the necessary legal basis to be one of the primary
implementers of Kazakhstani regional investment policy.

Samara-Uralsk Fiber Optic Line
--------------


3. Golden Telecom, which is part of Russia's VympelCom group, has
recently established a fiber optic line connection from Samara
(Russia) to Uralsk in northwest Kazakhstan. According to Golden
Telecom representatives, the new fiber optic line will expand the IT
backbone of KazakhTelecom, thereby accelerating Kazakhstan's
integration into the international telecommunications market, and
significantly upgrade regional telecommunication services.

German Technical Assistance to Help Labor Ministry
-------------- --------------


4. The Ministry of Labor and Social Protection has signed a
memorandum on cooperation with the German Society for Technical
Cooperation (GTZ). The purpose is to create a competitive local
labor force in Kazakhstan. The partners hope to develop mechanisms
that better identify the needs of the local labor force, as well as
the impact of migrant labor.

August Inflation
--------------


5. According to the Kazakhstan Statistics Agency, prices in August
2008 were 20.1% higher than in August 2007. Food prices posted the
highest gains, rising 27.9% year-on-year. Service prices grew 17.4%
year-on-year, and prices for non-food goods rose by a more modest
rate of 11.4% year-on-year. However, month-on-month inflation
slowed somewhat, registering 0.8% for August, in comparison with
0.9% for July and 1.2% for June.

Kazakhstani Investment in Georgia
--------------


6. According to Renaissance Capital, Kazakhstani investments in
Georgia total approximately $2 billion, including about $800 million
invested by BTA bank and $500 million by KazMunayGas.

Kazakhstan Wants To Build Power Plant in Ukraine
-------------- ---


7. According to Kazakhstan's Ambassador to Ukraine, Amangeldy
Zhumabayev, Kazakhstan is negotiating the construction of a power
plant in Uzhgorod, Ukraine, which would utilize approximately 1
billion cubic meters of natural gas from Kazakhstan annually.

KazMunayGas and Gasprom Neft in Joint Deal

ASTANA 00001869 002.2 OF 002


--------------


8. KazMunayGas and Russia's Gasprom Neft intend to sign a framework
agreement to jointly participate in oil exploration, production,
processing, and sale projects in Kazakhstan, Russia, and Europe.

Kazakhstan and China To Build Hydro Plant
--------------


9. The State Asset Management Holding Company "Samruk" has
announced a project to construct a 300 megawatt hydropower plant in
Almaty oblast that will come on-stream in 2012. The Kazakhstan
Development Bank and the State Development Bank of China will
finance the project. Eighty percent of the project's labor will come
from Kazakhstan, 20 percent from China.

Oil and Gas Discovery in West Kazakhstan
--------------


10. A large oil and gas deposit has been found near Petrov village
in West Kazakhstan oblast (region). According to experts, this is
one of the largest deposits discovered in Kazakhstan in the past 15
years. The quality of oil in the deposit is comparable to that of
Brent oil. Commercial oil extraction is scheduled to start in 2010.


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