The Eurasian Development Bank (EDB) and JSC AZIA AVTO, a Car Assembly Plant in Kazakhstan, have signed a loan agreement on financing the construction of a car factory with a full production cycle in Ust-Kamenogorsk, an EDB press release said on Thursday.
The terms of the agreement provide for investment lending in the amount of four billion rubles for a period of 10 years.
The document was signed by the Deputy Chairman of the Board, the State Secretary of EDB Andrey Krainy and the Chairman of the Board of Directors of the Group of Companies “BIPEK AUTO-ASIA AUTO” Anatoly Balushkin, in the presence of the President of PJSC AVTOVAZ Iva Karakatzanis.
The key market for the production of the future production complex will be Kazakhstan, with the ability to export to the countries of the Eurasian Union and Central Asia under the control of AVTOVAZ.
“EDB will provide financing for the project in terms of supplying technological equipment for the welding and painting shops of the car body. The commissioning of the first stage of the facilities under construction will allow to produce 60,000 cars a year in full cycle mode and start creating a technopark for the production of auto components. The deepening of the technological redistribution will increase the level of localization of produced cars to 50 percent. At the same time, the share of auto components produced in the territory of the Eurasian Union will approach 90 percent,” the bank said.
The new facilities will become the largest production in the history of the machine-building industry in Kazakhstan and the most ambitious project of Russian-Kazakh industrial cooperation.
PJSC AVTOVAZ holds a blocking stake in the joint venture JSC ASIA AVTO Kazakhstan (25 percent + one share). The rest of shares belong to the main investor in the person of the group of companies “BIPEK AUTO – AZIA AVTO”.
At the current stage, BIPEK AUTO – AZIA AVTO Holding invested $ 67.1 million of its own funds in the project.
