ASTANA, March 14, 2024 - The World Bank's Board of Executive Directors approved today a Development Policy Operation (DPO) loan in the amount of $600 million to Kazakhstan, marking the first phase of a series of reforms aimed at promoting sustainable and inclusive economic growth in the country. The reforms support Kazakhstan's vision to transition towards an economy that is greener, has more competitive markets, and is more inclusive.
As a carbon-intensive economy, Kazakhstan has bold ambitions to scale-up action on climate change and reduce reliance on the extraction of natural resources. The targeted reforms aim to increase renewable energy generation, gradually phase out fossil fuel subsidies, improve energy efficiency, and protect poor and vulnerable households. These efforts are part of Kazakhstan's Nationally Determined Contributions, which commit to a 25 percent reduction in emissions by 2030 compared to 1990 levels.
"This new partnership with the Government of Kazakhstan supports tangible measures to advance a low-emissions development strategy as part of the global fight against climate change," said Andrei Mikhnev, World Bank Country Manager for Kazakhstan. "It will play an important role in contributing to global public goods and supporting improved prospects for shared prosperity in Kazakhstan."
Achieving Kazakhstan's development goal of reaching high-income status calls for a competitive and dynamic economy. Reforms supported under this operation will enhance market contestability and help mobilize private capital, increase digital connectivity, and raise productivity. At the same time, ensuring that the benefits of higher and more sustained growth are equally distributed among the population is critical. Targeted reforms also support improvements to the social protection system to protect the poor and aim to enhance regional development to bring benefits to all.
The World Bank's financing offers a low-cost and long-term repayment option that is tailored to the financing needs of the government. It will support the government's reforms in the following areas:
- Develop greener and more efficient energy. The program implements key recommendations from the Country Climate and Development Report (CCDR) to support the reduction of Kazakhstan's carbon footprint and contribute to global efforts to combat climate change.
- Develop more competitive digital and financial markets and promote transparent procurement practices. The program aims to change the rules of the game to allow more firms to provide digital services, develop safeguards essential for a digital economy, allocate credit to support productivity and increase transparency in procurement practices. These reforms will support market-based practices that foster innovation and connectivity.
- Protect the poor and support regional development. Targeted reforms aim to strengthen the social protection system and enhance regional development, as part of broader efforts to enhance inclusion and bring greater opportunities to the regions.
Read more about the World Bank's operations in Kazakhstan.
