The World Bank loans represent 21.8% of the total state external debt. The vast majority of the loans are those of the International Bank for Reconstruction and Development (IBRD), and a relatively low share are from International Finance Corporation (IFC). We should mention that one of the largest IFC loans disbursed to date was the financing of restructuring at Ispat Karmet steel mill, in consortium with the European Bank for Reconstruction and Development (EBRD). All of the IBRD loans are long term and are aimed at restructuring industry, infrastructure, agriculture, the financial sector, and a social safety net. For the purposes of this paper, the repayment and/or servicing of the IBRD loans are just touched upon and are not analysed in detail due to their long term character.

The objective of IMF loans is to support the stability of the financial system through financing the balance of payment deficit and the supporting exchange rate stability. The IMF loans represent a minor portion of the state external debt (14.8%), and they are, like the other financing of international institutions, on a long term basis. Moreover, the IMF has approved a USD 480 million loan to Kazakhstan which has not been disbursed yet. However, the Government announced it is not going to take this money by the end of 1998 and/or afterwards, unless a serious threat to the stability of the national currency appears. So far, Kazakhstan can use this loan as an emergency kit, thus providing the National Bank and the Government with a room for manoeuvring.

Other international financial institutions have a minor share in the government external debt. The European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) have participated in a number of projects which are crucial to the national economy, such as restructuring the Aktau Sea port, supporting the agriculture and financial sectors, environmental protection, and technical assistance. However, their share in the total government external debt is low, at 1.3% (EBRD) and 6.6% (ADB).

The EBRD’s only loan to the state sector is a USD 54 million credit facility provided for the reconstruction of the Aktau port on the Caspian Sea which was approved in March 1996. The objective of the loan is to modernise the port and upgrade its cargo-handling facilities. The development of the project has been successful so far, and now it is in the second stage of implementation which includes the reconstruction of the breakwater and strengthening the port’s oil tanks/pipeline facilities.

Another important source of international borrowing for Kazakhstan has been the credits provided by the Governments of Germany, Japan, USA, Austria, and others. These credits played a crucial role in the national economy, especially those credits provided in the early years of independence. The amount of credits (stock) of the Governments of other states was around USD 300 million in 1997, which made up 9.5% of the government’s total external debt.

According to international principles, the funds under technical assistance programmes are not included in the external debt. However, the inflow of funds under these programmes are quite significant and worth mentioning. According to the National Statistics Committee, Kazakhstan annually receives about USD 60 – 80 million of technical assistance from the Governments of USA, Japan, UK, Germany, and France, along with the European Community, UN, ADB and the World Bank. The objectives of technical assistance programmes are to strengthen the institutional development of Government and non-governmental organisations (NGOs), support privatisation programmes, and personnel training.

The total volume of export credits under Government guarantees is about USD 1,900 million. The objective of such credits has been the financing of exports in the lender countries. Kazakhstan is currently repaying this debt stock, and the remaining principal amount due is USD 963.2 million, which is roughly 50% of all signed credit export agreements.

The most significant loan agreement in 1998 has been signed by the Government of Kazakhstan in September. Kazakhstan is to receive a USD 1 billion soft loan from the Japan (it is still unclear whether the loan would be from the Government of Japan or Japanese companies) with a maturity of 40 years and 10 years grace period. The interest rate for this loan would be between 0.75 and 2.20 per cent. This loan forms a part of the package offered to the Government of Kazakhstan in exchange for the sale of one sevenths stake in the OKIOC oil and gas consortium to a Japanese and US companies. Other parts of the package include a USD 500 million cash bonus to the Government of Kazakhstan, which has been already received in full. The direct investment commitments are worth USD 2 billion and include a number of projects in oil and gas sector.