Successful refinancing of currency obligations of Moynak hydropower plant

The electricity holding company “Samruk-Energy” JSC and the company in its structure “Moynak HPP” JSC repaid the foreign currency loan of “Moynak HPP” JSC in the amount of 136,3 mln.US dollars, which was earlier obtained from the State Development Bank of China for the construction of a Kazakhstan hydropower plant.

The implementation of the deal allowed Samruk-Energy to significantly reduce the share of foreign currency loans in its loan portfolio from 17% to 3% and reduce the negative effect of currency fluctuations on the company’s financial indicators. Moreover, according to experts, the early repayment of a foreign currency loan is consistent with state policy in terms of de-dollarizing the economy, reducing the level of external quasi-public debt, increasing the value of assets of national companies.

“In addition, the deal allowed releasing the corporate guarantee of “Samruk-Kazyna” JSC in the amount of 50 mln.US dollars, thereby reducing the amount of the shareholder’s contingent liabilities,” said Sergey Lee, director of Treasury and Corporate Finance Department at “Samruk-Energy” JSC, at a press conference on this occasion.

We would like to remind that 300 MW “Moynak HPP named after U. Kantaev” was commissioned in 2012. It is located on the Sharyn River in Raimbek district of Almaty region. The project successfully addresses the issues associated with reducing the shortage of electricity in the southern zone of the UES of Kazakhstan (Almaty, Zhambyl, Kyzylorda and Turkestan regions). The  plant was constructed through co-financing from the State Development Bank of China and the Development Bank of Kazakhstan.

“After 7 years of operation of the plant equipment, we can confidently talk about the success of the project. The State Development Bank of China fully supported the initiative of Samruk-Energy group on refinancing the loan. We consider “Samruk-Energy” JSC as one of the reliable partners in Kazakhstan and look forward to further cooperation, ”said Mr. Fan Xiaohui, Principal manager of the Market Research and Business Development Department of the State Development Bank of China Representative Office in Kazakhstan, at a press conference.

During the event, Sergey Lee also noted that in order to support the development of the domestic stock market, funds for repaying a foreign currency loan were raised on the platform of the AIFC (Astana International Exchange), which was the start of a successful cooperation between the largest Kazakhstani energy holding company and the international financial center .

According to the representative of a Kazakhstan company, the deal is a clear confirmation of successful cooperation between Samruk-Energy group of companies, Kazakhstan Development Bank and one of the largest world banks - the State Development Bank of China.

 “Samruk-Energy” JSC has been actively reducing the share of foreign currency loans in its loan portfolio since 2016. Foreign currency loans in the loan portfolio of the group were reduced from 65% to 17% during 2017-2018.

At present, “Samruk-Energy” JSC continues its cooperation with the second lender of the Power plant – “Kazakhstan Development Bank” JSC. In order to further reduce exposure to currency fluctuations, agreements on the conversion of part of the debt from US dollars to tenge have been reached. Following the completion of the deal, the share of foreign currency obligations will be reduced from 3% to 1.6%, and the main assets of Moynak hydropower plant will be released from the security base.


For reference:

“Samruk-Energy” JSC is the largest power holding company in Kazakhstan, 100% owned by “Samruk-Kazyna” SWF JSC. It was established in 2007. Core business: electricity and heat production; transmission, distribution and sale of electricity, power coal mining. The holding company comprises energy and coal enterprises, including “Ekibastuz SDPP-1” LLP, “Ekibastuz SDPP-2 Plant” JSC, “Bogatyr Komir” LLP, “Almaty Power Plants” JSC, “Moynak Hydropower Plant named after U.D. Kantayev” JSC, “Shardarinsk HPP” JSC, etc.

China State Development Bank is the largest of China's three state development banks. The Bank is directly subordinate to the State Council of China and is the second largest issuer of bonds in China after the Ministry of Finance and the largest lender in foreign currency.

“Kazakhstan Development BankJSC is a national development institute for upgrading and development of the non-resource and infrastructure sectors of the economy of Kazakhstan, established in 2001. The main areas of activity: the development of industrial infrastructure and manufacturing industry, the promotion and attraction of external and internal investments in the country's economy. KDB is one of the largest investment operators of state programs for industrial and innovative development.


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