IDB eyes investment in Kazakh, Central Asia energy, farming

Mon Oct 1, 2012 7:01am EDT
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By Robin Paxton

ASTANA (Reuters) - The Islamic Development Bank is looking to resource-rich Kazakhstan and Central Asia as a fertile ground for investment, with the launch of a $50 million renewable energy fund on Monday and plans to finance agricultural projects, an official said.

The Saudi Arabia-based multilateral bank's private sector arm, the Islamic Corporation for the Development of the Private Sector (ICD), said it was considering financing farming projects in Kazakhstan from its $600 million agribusiness fund.

"There are Gulf countries which have the capital but lack the agricultural resources, while there are countries in Central Asia, Africa, which have the resources but not the capital. This fund will try to bridge the gap," ICD Chief Executive Khaled Al-Aboodi said on the sidelines of a conference.

"We are looking at Kazakhstan," he said.

Kazakhstan's resource-driven economy, at $185 billion the largest in Central Asia, presents opportunities for Islamic banking.

Seventy percent of its 17 million population is Muslim, and investors in Kazakhstan have been looking for alternative sources of finance since the financial crisis laid bare Kazakh banks' exposure to bloated real estate markets and foreign borrowing.

President Nursultan Nazarbayev, a 72-year-old former steelworker who has led Kazakhstan since Soviet times, has given his support to the development of an Islamic finance industry in the country.

Al-Aboodi said the ICD's agribusiness fund was considering grain, meat and dairy projects in Kazakhstan, one of the world's top 10 wheat exporters, for sharia-compliant investment.   Continued...