OCT. 11 2016 (The Conway Bulletin) – Trade turnover between Georgia and Saudi Arabia has increased, the two countries’ diplomatic corps said at a meeting in London. Saudi investment into Georgia reached $100m in the first nine months of the year and total trade turnover has doubled. Tourism is also on the rise, with visits from Saudi Arabia to Georgia likely to triple.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 300, published on Oct. 14 2016)
OCT. 7 2016 (The Conway Bulletin) – The EBRD gave a $560,000 loan to Taze Ay, a Turkmen meatpacker aiming to expand its production line by 25%. Located in the southern city of Mary, Taze Ay was founded in 2003 by a local family. Taiwan’s International Development and Cooperation fund will also contribute to the expansion of the factory with a $240,000 loan.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 300, published on Oct. 14 2016)
OCT. 4 2016 (The Conway Bulletin) – Brussels-based Rezidor Hotel Group said that its first Radisson Blu hotel in Kyrgyzstan will open in 2019. Rezidor has teamed up with local LLC Stability to build the hotel in central Bishkek. The Radisson Blu is Rezidor’s high-end hotel brand. In Central Asia and the South Caucasus, Radisson Blu hotels already operate in Astana, Tashkent, Yerevan and Tbilisi.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 7 2016 (The Conway Bulletin) – As shown in our charts this week, markets were upbeat, especially due to a steady increase in oil prices over the past two weeks, following a landmark agreement among the world’s top oil exporters.
OPEC, the exporters’ lobby group, decided to cut oil output by around 1.5% in an effort to put pressure on the US dollar and send oil prices higher.
This is OPEC’s first production cut in eight years, since the 2008 Global Financial Crisis. And the decision is an important one.
It marks a formal agreement between Saudi Arabia and Iran, whose diplomatic spats had been at the core of OPEC’s inability to decide in the past year.
It also has an important effect on countries around the Caspian Sea.
Azerbaijan has quickly eroded its reserve base, pumping its oil money into the budget to contain its currency crisis. This could have not lasted much longer. Now, if oil prices continue to float around $50/barrel, a good 20% higher than two months ago, transfers from the oil fund can slow down and the leadership can breathe.
Perhaps out of excitement from the impending re-start of Kashagan in the Caspian Sea, Kazakhstan is also rallying on higher oil prices, cutting interest rates and transfers from its oil fund into the budget.
Two caveats, however, are needed for Azerbaijan and Kazakhstan. First, don’t believe in any proposal from these two non- OPEC countries on freezing or cutting production. If their output falls it is because of economics.
Second, you need to wait until their mega projects, from Kashagan to Shah Deniz II, come online before making long-term assumptions on the energy might held by Kazakhstan and Azerbaijan.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)
TBILISI, OCT. 6 2016 (The Conway Bulletin) — The Georgian government unveiled the 20.7MW Kartli Wind Farm, Georgia’s first large-scale wind farm which is considered a key milestone towards both boosting its power production and increasing its green energy footprint.
Kartli Wind Power Plant, a joint venture owned by the Georgian Energy Development Fund (GEDF) and Oil and Gas Company of Georgia, manages the project, which cost $34m to build. GEDF is part-owned by the EBRD, which loaned $22m for the project.
At the inauguration ceremony near the town of Gori in central Georgia, PM Giorgi Kvirikashvili lauded the project and highlighted its importance.
“This project is an indication that Georgia is becoming a truly developed country with leading technologies,” Mr Kvirikashvili said.
“This wind farm will enable us to partly meet our electricity demand during winter time.”
The government has pushed for the development of wind projects across the country to increase domestic production and limit the growth in imports during the winter months.
In the summer, Georgia exports its electricity surplus from its hydropower plants, mainly to Russia and Turkey.
The Kartli wind farm aims to reduce the winter gap and lower carbon emissions.
The EBRD also praised the project and said that it was ready to lend more funds to develop the country’s renewable energies.
“The EBRD stands ready to support Georgia in promoting renewable energy sources and this project confirms our determination to continue making significant investments in renewable energy,” Aida Sitdikova, EBRD’s regional director for Energy, said in a statement.
The Kartli Wind Farm is the biggest wind power project in the South Caucasus although Azerbaijan said it was considering erecting a wind farm in the Caspian Sea.
Power production has become a major headache for governments in the region as they try to feed electricity to growing populations and also replace aging Soviet infrastructure.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 6 2016 (The Conway Bulletin) – Bank Standard, one of the largest banks in Azerbaijan, filed for bankruptcy, delivering a sharp shock to the country’s banking sector which is trying to recover from a currency crisis.
The sight of Bank Standard, considered a stalwart of the high street since the mid-1990s, going bankrupt in Azerbaijan will worry ordinary Azerbaijanis who have already seen the manat collapse and other smaller banks disappear in a harsh economic downturn.
Azad Javadov, director of the Azerbaijan Deposits Insurance Fund, a government fund that insures people’s savings in banks, told media the government had tried to save Bank Standard.
“The state tried to normalise Bank Standard, but failed. It was decided to declare the bank bankrupt to prevent more loss,” he said.
Bank Standard has, effectively, been on life-support for some time receiving funds from the government which wanted to save the bank and protect its financial sector.
But like several other smaller banks which have filed for bankruptcy this year, Bank Standard couldn’t weather the financial storm generated since 2014 by a collapse in oil prices, a recession in Russia and the fall in value of emerging market currencies.
Part of the blame, some analysts have said, lies with the Azerbaijani government which imposed heavy capital requirements on banks in 2016.
A few days after Bank Standard declared bankruptcy, the Central Bank ordered its deposits be transferred to Muganbank, a mid-sized bank. Zaminbank, another small bank, was also declared bankrupt on Oct. 4.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 7 2016 (The Conway Bulletin) – Centerra Gold’s stock price has been on a rollercoaster this summer, closely following the ups and downs of the price of gold.
This week, both fell. Centerra contracted by 9% to 6.49 Canadian dollars and gold registered an unusual 5% fall to $1,254.38/troy ounce on Thursday. After a tense spring, when the Kyrgyz government and Centerra were at loggerheads over permits and court cases, calm now appears to reign. Importantly, though, this year Centerra has actively tried to diversify its portfolio away from Kyrgyzstan, investing in Turkey and in the US.
As part of the financing for the acquisition of Colorado-based Thompson Creek, Centerra issued new shares which analysts said will dilute the share that Kyrgyzaltyn, the government-owned gold miner, owns in Centerra from 32% to approximately 28.8%.
The deal, inked in July, put relations between the company and the government under strain once again.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 6 2016 (The Conway Bulletin) – Pakistani media hinted that it was anticipating potential supply-side problems with CASA-1000 electricity project by saying that it had invited Russia to make up any short- fall over winter when Kyrgyzstan and Tajikistan’s hydropower stations are less productive. The World Bank-backed $1.2b project aims to send electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan by 2019. This year, shortages in Kyrgyzstan have cast doubts over the country’s export capacity and Pakistan has explored other suppliers, including Turkmenistan.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 4 2016 (The Conway Bulletin) – During a visit to Uzbekistan by the World Bank’s new regional director for Central Asia, Lilia Burunciuc, the Uzbek ministry of economy asked for a $100m loan to improve the country’s job market. The ministry said it wanted to create around 500,000 new, sustainable jobs over the next five years. In June, the World Bank committed to a new partnership with Uzbekistan, earmarking around $3b for a vast range of projects.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 4 2016 (The Conway Bulletin) – GM Uzbekistan said it has discontinued sales of its Ravon Matiz car model in Russia and shifted exports to Belarus. The company did not give a reason for the marketing decision. Uzbekistan and Belarus have improved trade ties. GM Uzbekistan, a joint venture between US-based GM (25%) and state-owned Uzavtoprom (75%), has had to grapple with a corruption scandal involving car sales to Russia in the past few months.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)