Kazakhstan dips into oil fund for EXPO 2017 construction
Published on 13/11/2014
Kazakhstan’s building sector has been boosted by president Nursultan Nazarbayev’s announcement that the country’s sovereign oil wealth fund will be tapped for $2.7bn to stimulate the economy. The total will include $220m more spent on building work to get its capital Astana ready to host the EXPO 2017 global exhibition event in three years’ time.
Based around the theme of ‘Future Energy’, EXPO 2017 will bring 3 million visitors and participants from 100 countries to Astana, and Kazakhstan’s government has already assigned over a billion dollars in total to building pavilions and upgrading facilities for the event. As well as other projects such as improving transport infrastructure, this latest instalment of cash will partly be spent on a new terminal and runway for Astana’s airport.
“The city airport has reached its projected capacity of handling 3.5 million passengers this year. To further develop its potential, I commission to allocate another $159.3 million in 2015 to have a new terminal and have the takeoff runway renovated at the airport of Astana. The measure will enable to bring the capacity of the airport up to 7.1 million passengers a year by 2017," said Nazarbayev in his Address to the Nation, where he announced the plans.
Elsewhere, $550 million from the wealth fund has been assigned to SMEs and ‘large-scale entrepreneurship projects’, while $445 million more will be spent on infrastructure in the Khorgos-East Gate special economic zone on the Kazakh-Chinese border and industrial parks elsewhere in Kazakhstan. The remainder of the $2.7bn has been earmarked for boosting small businesses and compensating for falling oil prices.
Building growth
As well as bringing exhibitors and visitors from around the world, EXPO 2017 is also bringing good news to Astana’s building sector. Chicago architects AS+GG won a tender last year to design a 173 hectare (1.73 sq km) Expo City for the event, which will include exhibition pavilions, performance spaces, offices, hotels and apartments. According to Talgat Yermegiyayev, in charge of preparations for the event, EXPO 2017 will generate 20,000 new jobs in Astana, most of these in construction.
Construction has been a main driver of Kazakhstan’s economy recently – house building is enjoying a steady rise, while Almaty’s bid to host the 2022 Winter Olympics (with Beijing the only other contender) has led to anticipation of building boost similar to the one given by Kazakhstan’s $1bn+ spend on hosting the 2017 Universiade world student games.
Kazakhstan’s sovereign oil wealth fund, which stood at over $76bn at the end of July 2014, was first dipped into at the beginning of the year when President Nazarbayev ordered $5bn of it to be used to provide cash in the form of long-term credits, ‘giving an impetus to develop small-sized businesses’. The $2.7bn of funding announced this week forms the second chunk of this total.