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