The Eurasian Development Bank (EDB) and ASIA AVTO Kazakhstan signed a loan agreement at the Moscow International Automobile Salon on 30 August 2018. The parties agreed on financing a full-cycle car assembly plant being built in Ust-Kamenogorsk in partnership with Russia’s AvtoVAZ.
Andrey Krainiy, Deputy Chairman of the Management Board and State Secretary at the EDB, and Anatoly Balushkin, Chairman of the Board of Directors at the BIPEK AVTO – ASIA AVTO Group of Companies, signed the agreement at the Moscow International Automobile Salon in the presence of Yves Karakatsanis, President of AvtoVAZ.
The EDB will finance equipment supplies for the welding and car body painting shops. The agreement extends a ten-year investment credit for a total of RUB 4 billion.
When commissioned, the first phase of the facilities under construction will manufacture 60,000 cars a year. A technology park to produce car components will be launched next. As more process stages are introduced at the plant, the localisation of car production will reach 50%. The share of parts manufactured in the Eurasian Economic Union (EAEU) will be around 90%.
The Renault-Nissan-Mitsubishi Alliance represented by AvtoVAZ is a strategic partner and minority shareholder in the project. AvtoVAZ holds a blocking stake in the joint venture (25% plus one share). The BIPEK AVTO – ASIA AVTO Group of Companies, as the main investor, owns 75% of shares in ASIA AVTO Kazakhstan.
The principal market for plant products will be Kazakhstan, with an option to export to the EAEU and Central Asia under AvtoVAZ’s control. The new plant will be the largest venture in Kazakhstan’s mechanical engineering sector and Russian-Kazakh industrial cooperation.
Andrey Krainiy, Deputy Chairman of the Management Board and State Secretary at the EDB, stated that “Two major companies of critical importance to the automotive industries of Russia and Kazakhstan have united to launch high-tech production focused on EAEU markets. The project will help to develop the existing inter-country value chains and create new ones. It has already become a special undertaking in the Eurasian Development Bank’s portfolio, and it will definitely become an exemplary one in terms of its integration effect.”
Original source: EDB
Published on 30 August 2018