KAZAKHSTAN: AMBASSADOR DISCUSSES PED EXTENSION,

C O N F I D E N T I A L ASTANA 000734 SIPDIS STATE FOR SCA/CEN, EUR/ACE, F, ISN STATE PLEASE PASS TO USAID E.O. 12958: DECL: 04/28/2019 TAGS: PREL PGOV ECON EAID KNNP KZ SUBJECT: KAZAKHSTAN: AMBASSADOR DISCUSSES PED EXTENSION, PPEPI, AND BN-350 FUNDING WITH ECONOMY MINISTER SULTANOV REF: A. (A) STATE 07756 ¶B. (B) O,MARA-FAGIN APRIL 22 E-MAIL Classified By: Ambassador Richard E. Hoagland, Reasons 1.4 (b) and (d) ¶1. (C) SUMMARY: During an April 28 meeting, the Ambassador informed Minister of Economy and Budget Planning Bakhyt Sultanov about the U.S government's approval of a three-year extension for the Program for Economic Development (PED) and updated him on the progress of the U.S.-Kazakhstan Public-Private Economic Partnership Initiative (PPEPI). Sultanov welcomed the news on the PED's extension and PPEPI's progress. The Ambassador also stressed the need for the Kazakhstani government to follow through on its funding commitments for our joint program to store spent fuel from Kazakhstan's BN-350 plutonium breeder reactor. Sultanov responded that the necessary funding may be available from Kazakhstan's budget reserve. END SUMMARY. ¶2. (SBU) During an April 28 meeting, the Ambassador informed Minister of Economy and Budget Planning Bakhyt Sultanov that the U.S. government has agreed to extend the USAID-implemented Program for Economic Development (PED) for an additional three years, 2010-12. The PED extension will allow for extended implementation of existing activities, as well as the development of new initiatives. The Ambassador said that we look for continued cost-sharing for PED, with the Kazakhstani government bearing a greater percentage of PED expenses during the extension period. ¶3. (SBU) The Ambassador also updated Sultanov on the Public-Private Economic Partnership Initiative (PPEPI), explaining that the five PPEPI working groups had convened for the first time during the past week. The working groups will produce policy recommendations for the Kazakhstani government. The Ambassador emphasized that if these policy recommendations are implemented, they should significantly improve Kazakhstan's investment climate. ¶4. (SBU) Sultanov thanked the Ambassador for the good news on the PED extension and on PPEPI's progress, explaining that he was pleased about our continued bilateral cooperation on these economic issues. He acknowledged that the ongoing economic crisis had raised many questions about the Kazakhstani business environment and said that "these programs will do a lot to help us." ¶5. (C) Per refs A and B, the Ambassador also stressed the need for the Kazakhstani government to follow through on its funding commitments for our joint program to store spent fuel from Kazakhstan's BN-350 plutonium breeder reactor at the Baikal-1 site. He passed Sultanov a non-paper on the issue and reminded him that the U.S. Department of Energy has already spent more than $100 million on the BN-350 spent fuel program. The Ambassador requested that the Ministry of Economy and Budget Planning allocate $5 million for 2009 so that the project can stay on schedule. Sultanov appeared somewhat surprised that the $5 million was needed for this year, but indicated that the money could be made available from budget reserve funds. He said that his Ministry would need to receive a request and the necessary documentation from the Ministry of Energy and Mineral Resources (MEMR). The Ambassador thanked Sultanov and said the Embassy would follow up directly with MEMR. HOAGLAND