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Azerbaijani company wants partners for Greek distributor deal

DEC. 10 2015 (The Conway Bulletin) — SOCAR, Azerbaijan’s energy company, has to sell a 17% stake in the Greek gas distributor DESFA by the end of June 2016 to comply with EU ownership regulations, media quoted the Greek authorities as saying.SOCAR bought a 66% stake in DESFA in 2013 although the European Commission later said that under 2009 rules it had to bring its stake in DESFA down to 49%. Belgium’s Fluxys and Spain’s Enagas have submitted a joint offer for the stake. Italy’s Snam has also said it would be interested in buying it.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Kazakhstan’s DevBank and Al Hilal sign agreement

DEC. 3 2015 (The Conway Bulletin) — The state-owned Kazakhstan Development Bank and Abu Dhabi-based lender Al Hilal signed an agreement on the development of Ijara, an Islamic banking financial instrument linked to leasing real estate. Earlier this week Kazakhstan’s Central Bank also said it is considering halving capital requirements for Islamic banks to 5b tenge ($16.2m).

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Lydian secures funds to develop Armenian gold mine

DEC. 1 2015 (The Conway Bulletin) — Toronto-listed miner Lydian International said it had reached a $325m financing agreement to develop a gold mine in Armenia, an initiative that will boost the country’s gold output.

In a detailed statement, the company said it will receive a line of funding from US-based investment firms Orion Mine Finance and Resource Capital Funds. The money will be used to start construction at the Amulsar gold project in south- central Armenia.

Once preparation work is completed next year according to the company, Lydian forecasts a production rate of around 6 tonnes of gold per year from the Amulsar project. For a comparison, Armenia produced 3.5 tonnes of gold in 2013.

Lydian has been working on financing the project since 2006.

A fall in gold prices, down around 13% year-on-year on Dec. 1 at $1,069/ounce – a 5-year low, has put pressure on mining companies with operations in the South Caucasus and Central Asia.

Lydian’s CEO Howard Stevenson said the agreement with Orion and RCF was a major step forward, especially considering the current financial markets.

“The Financing provides over 75% of the overall financing requirement, which is a strong achievement in the current financial market,” Mr Stevenson said in a company statement

Armenian PM Hovik Abrahamyan also said the government was pleased Lydian had won backing for the project.

“The financing of the construction of the Amulsar Mine represents a significant step forward in the development of the mining industry in Armenia,” Mr Abrahamyan said in a statement.

Gold is an important cash earner for the Armenian government but although potentially lucrative for the state, the project has angered people who worry about the environmental degradation. In 2014, police dispersed a large crowd of protesters around the mine.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Tajikistan moves towards EEU

DEC. 2 2015 (The Conway Bulletin) – Tajikistan’s parliament ratified a treaty that guaranteed investment protection for members of the defunct Eurasian Economic Community, a precursor of the Kremlin-led Eurasian Economic Union (EEU). The treaty itself is of no significance but signing it does signify Tajikistan’s determination to join the EEU.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Kazakhstan issues new (devalued) 20,000 tenge note

DEC. 1 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank issued its first 20,000 tenge note, depicting the Akorda presidential palace and a mock Arc de Triumphe in Astana and the Eli winged statue in Almaty’s central square.

When the idea of the blue, grey 20,000 tenge banknote was conceived in 2013, it would have been worth around $129.

Now, after two devaluations linked to the drop in oil prices and the fall of the Russian rouble, Kazakhstan’s 20,000 tenge is worth $65.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Pegasus flies to Turkmenistan

DEC. 1 2015 (The Conway Bulletin) –Turkey’s low-cost airline Pegasus will open a new Istanbul-Turkmenbashi route, according to Turkmenistan’s official press service. Pegasus would become the first international airline to fly to Turkmenbashi, a port city on the Caspian Sea. The nearby Awaza resort should benefit from this new route.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Chinese Kyrgyz refinery opens

NOV. 28 2015 (The Conway Bulletin) – A $60m Chinese-built oil refinery opened in Tokmok in the north of Kyrgyzstan, the second refinery that China has constructed in the country. Both the Chinese-refineries will rely on Russian crude oil to operate. Kyrgyzstan has been facing a shortage of refined petrol products.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Inflation rises in Georgia, again

DEC. 3 2015 (The Conway Bulletin) – Year-on-year inflation in Georgia rose to 6.3% from 5.8%, the national statistics agency said, its highest level for four years. Although the year-on-year rate is rising, the month-on-month rate has slowed to 0.3% from 0.8% in October and 1.1% in September. Like other economies, Georgia’s currency has lost value this year, pushing up the cost of imports.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Currencies: Kyrgyzstan’s som, Tajikistan’s somoni

DEC. 4 2015 (The Conway Bulletin) — The Kyrgyz som continued its slump against the dollar and now trades at above 75.5/$1. The Central Bank chairman Tolkunbek Abdygulov said the exchange rate had changed because of a speculative attack and promised to continue to intervene to prop up the currency. The regulator said that local bank FinanceCredit was found guilty of speculative trading of the som. In addition, the Central Bank fined several exchange points across the country for speculating on currency rates.

In Tajikistan, the somoni was stable at 6.7/$1, after a rough week. On Nov. 30, media reported that Dushanbe residents had to pay around 7.5somoni for $1. The Central Bank reacted by drafting a decree that shut down the remaining private exchange bureaus in the country. Earlier in April, it had forced the closure of over 800 out of a total of 1,500 exchange bureaus because it said they were taking advantage of the unstable currency markets.

On Dec. 1, the Central Bank also reported the arrest of six employees of exchange bureaus for currency speculation. As with the Kyrgyz incidents, the details of these so-called speculative attacks have been difficult to pin down.

But none of this is surprising in Central Asia’s currency markets.

We witnessed a similar trend in Kazakhstan in 2014, when a devaluation of the tenge was followed by speculative attacks on the currency and interventions to keep the tenge from plummeting. This was repeated this year again in Kazakhstan.

It is likely that both Tajikistan and Kyrgyzstan will follow this trend and crack down on private exchange bureaus to strengthen their control over exchange rates.

In much of the rest of the region, currencies did not move. The exception was Uzbekistan. The Uzbek sum reached a new record trading low, officially, at 2,755/$1. In the last year, it lost almost 15% of its value.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Georgian police arrests 4 ‘IS sympathisers’

DEC. 1 2015 (The Conway Bulletin) – Georgian security forces arrested four men in a village in the west of the country who they said were planning various terrorist attacks, one week after the extremist group IS called for a revolution in Georgia.

The deputy head of Georgia’s security services, Levan Izoria, said that the arrests were made during a search of 11 houses.

“Information had been obtained identifying several individuals who support Islamic State ideology,” media quoted him as saying.

A photo taken after the arrests showed several heavily armed Georgian security forces personnel wearing combat uniforms leading four men in handcuffs.

Georgia is concerned about IS using it as a transit country to send recruits to Syria. IS recruits travelling to Syria have flown to Tbilisi and then travelled west to the border with Turkey. From there they can reach Syria. Since an attack in Paris last month that killed 130 people Georgia has boosted its border controls.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)