Tag Archives: business

Georgia boosts hydropower and talks up united energy market

DEC. 7 2015 (The Conway Bulletin) — Georgian Water and Power (GWP) said it has started construction of a new hydropower plant near Tbilisi, part of a broader investment package designed to boost Georgia’s electricity generating capacity.

The Saguramo hydropower plant will cost 10.5m lari ($4.38m) to build and be operational by the end of 2016.

Importantly, it will feed its electricity straight into the Tbilisi power system.

And the timing of the start of construction at the Saguramo 4.4 megawatt plant was pertinent.

Only a couple of days earlier, Georgian energy minister Kakha Kaladze told media that he wanted to see a united energy market in the South Caucasus.

“It is logical to create a common energy network with Russia, Armenia and Azerbaijan, which will create a single regional energy market,” media quoted him as saying.

Georgia is deficient in energy and is currently negotiating with Russia to import more gas.

It has unveiled a large hydropower investment plan which at its centre has the much-delayed Nenskra dam in the northwest of Georgia. Nenskra will have a power generating capacity of 280 megawatts and cost $1b to build.

But Mr Kaladze appeared to suggest that he wanted to hedge his bets and develop a pan-South Caucasus energy market that also included Turkey and Russia.

“Taking into account existing and future projects, it is possible to connect the energy system of the South Caucasus and Georgia will be an energy bridge, ensuring the growth of exchange and trading of electricity,” he said.

So far, though, there has been a less than ecstatic response from the rest of the region, unsurprisingly given the fraught nature of most of the neighbours’ relations.

ENDS

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

ADB supports Tajikistan

DEC. 7 2015 (The Conway Bulletin) – The Manila-based Asian Development Bank approved a grant of $53.4m and an additional loan of $6.6m to Tajikistan to help it develop private businesses. The ADB said the grant was designed to bring in programmes that would reduce business costs as well as increase protection for small companies.

ENDS

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

GM Uzbekistan sales fall

DEC. 9 2015 (The Conway Bulletin) — GM Uzbekistan posted a 47% fall in sales of cars to Russia in the first eleven months of the year. Only 18,753 cars manufactured by the General Motors-led joint venture with the Uzbek government were sold in the Russian market. In January-November last year, GM Uzbekistan sold over 35,000 cars to Russia. Russia is its most important market.

ENDS

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

Ratings agencies warn Kazakhstan that NPLs are worsening

DEC. 7/10 2015 (The Conway Bulletin) – Ratings agencies Standard & Poor’s and Fitch said that worsening economic conditions in Kazakhstan threaten to generate bad debt that could drag down the banking sector.

The warnings add to the mounting analysis which suggest that the initial impact of low oil prices and a recession in Russia were underestimated. Last week the World Bank said that the Kazakh economy would grow by its lowest rate since the 1990s.

Specifically Standard & Poor’s downgraded the rating of Almaty-based Eurasian Bank to B from B+ because of an increase in its non- performing loan portfolio.

“The level of non-performing loans increased to 11.1% of total loans on Nov. 1, 2015 from 7.5% on Jan. 1, 2015,” it said in a statement.

Non-performing loans are those which are more than 90 days overdue.

After the Global Financial Crisis of 2008/9, Kazakhstan’s banks held portfolios with the largest proportion of non-performing loans in the world. It had managed to reduce this before the onset of the current economic malaise.

But the current economic problems have slowed this recovery.

Similarly to the World Bank last week, Fitch said the Kazakh economy would grow by just 1% this year.

“Medium-term prospects for Kazakhstan’s banking system have deteriorated in 2015 due to lower oil prices, the economic slowdown (especially in non-extractive sectors) and the weaker tenge,” it said in a statement.

Unlike the World Bank, though, it did say the recovery would be quicker and that the Kazakh economy would grow by 2.3% in 2015, compared to a World Bank estimate of 1.1%.

ENDS

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

Armenia’s Armeneconombank and BTA merge

DEC. 8 2015 (The Conway Bulletin) — Armenia’s Armeneconombank said it intends to merge with BTA Bank Armenia. The two companies signed a memorandum of understanding in Almaty, confirming the deal. The European Bank for Reconstruction and Development owns 20% of Armeneconombank. Kazakhstan’s BTA Bank owns 65.2% of BTA Bank Armenia. BTA Bank, in turn, is owned by Kazakhstan’s Kazkommertsbank.

ENDS

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

UAE fancies Georgian capital as prime development spot

DEC. 3 2015 (The Conway Bulletin) — UAE-based Green Valley International said it was launching a 500m dirham ($136m) luxury housing development project in Tbilisi aimed specifically at investors from the Middle East.

The Green Valley City project near the Georgian capital will spread over 88,000 square metres, roughly the size of 12 football pitches. In the ten apartment blocks the company plans to build, there will be around 510 residential units.

Ali Saeed Al Salami, general manager at Green Valley said: “Georgia is one of the most attractive destinations for real-estate development and investments in Europe. For this project, we will be providing special offerings and facilities to Arab and GCC citizens who would like to invest in it.”

The Gulf Cooperation Council (GCC) is a group of countries that includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

Other investors have been piling into the Tbilisi property market. China’sHualing Georgia has opened its first hotel in Tbilisi Sea New City and Axis said it would complete two $83m twin towers in the city centre.

ENDS

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

Tajikistan cuts electricity exports

DEC. 8 2015 (The Conway Bulletin) – Tajikistan’s public utilities company Barqi Tojik said it had stopped exporting electricity to Kyrgyzstan and Afghanistan because of a seasonal shortage of supply, showing the weakness of Tajikistan’s power generating infrastructure.

The decision to halt exports also poses major questions over Tajikistan’s plans to become a regional power exporter. Only last week, foreign ministers from the countries involved in the CASA-1000 project signed a final agreement in Istanbul which should power the project forward.

The CASA-1000 project will link Tajikistan and Kyrgyzstan to Pakistan, which is short in power, via Afghanistan.

The export cut by Barqi Tojik is a routine measure to satisfy domestic demand during the peak winter season but the company said hydro-power plants suffered from lower- than-normal production this year.

“Water levels are today roughly 10% lower than last year,” said Barqi Tojik in a statement on Dec. 8.

For CASA-1000 to be a success, Tajikistan needs to build more hydropower capacity.

Shutting off power supplies to Afghanistan and Kyrgyzstan during the winter months highlights this issue.

ENDS

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

Georgia to increase gas supplies from Russia

DEC. 8 2015 (The Conway Bulletin) – Georgia’s energy minister Kakha Kaladze met with Alexei Miller, the chairman of Russia’s Gazprom, in Luxembourg to discuss increasing imports of Russian gas. No deal has been signed although even the talks have stirred controversy in Georgia where memories of the 2008 war against Russia are still very fresh.

ENDS

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

Coca Cola opens plant in KZ

DEC. 9 2015 (The Conway Bulletin) — Turkish producerCoca Cola Icecek will open its second plant in Kazakhstan in the first half of 2016, the chairman of the government agency KAZNEX INVESTBorisbi Zhangurazov told media.Coca Cola Icecek will operate the plant, located in Astana, which cost around $70m to build. Kazakhstan is the largest market in Central Asia for Coca Cola Icecek.

ENDS

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

Kashagan to start pumping oil by Dec. 2016, says Kazakh minister

DEC. 8 2015 (The Conway Bulletin) — Seemingly determined to be the bearer of positive news, Kazakh minister of economy Yerbolat Dossayev said construction on expanding the Tengiz oil project would start next April and that the Kashagan oil field would finally begin production in December 2016.

These dates confirm earlier plans to speed up the much-delayed Kashagan oil field in the Caspian Sea and expand the Chevron-led Tengiz oil- field sooner rather than later.

But some of the numbers are lower than the government had hoped for.

Deputy energy minister Magzum Mirzagaliyev said the Kashagan oil- field will reach an output of 13m tonnes/year by 2020, the equivalent of 250,000 barrels of oil/day. In June, NCOC ex-director Stephane de Mahieu said Kashagan would reach 370,000 barrels/day by the end of 2017. The NCOC consortium includes Eni, Kazmunaigas, Shell, ExxonMobil, Total, CNPC and Inpex.

Tengizchevroil – which includes Chevron, ExxonMobil, Kazmunaigas and LukArco – delayed their expansion plan to Tengiz this year because of a drop in oil prices. It has not commented on an April expansion date.

ENDS

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