Korea, Kazakhstan agree on $8 bil. projects

By Kang Hyun-kyung

ASTANA — South Korea and Kazakhstan Thursday agreed on two $4 billion projects for the construction of thermal power plants and a petrochemical complex in the Central Asian country.

The two projects combined mark Korea’s largest investments in Kazakhstan since the two nations established diplomatic relations in 1992.

Under the so-called Balkhash project, the Korean consortium consisting of Samsung C&T and the Korea Electric Power Corporation will build two coal-fired thermal power plants with its funding.

The consortium will also operate the plants and provide electricity to the agencies designated by Kazakhstan’s government.

An official from the presidential office told reporters, “The Korean consortium will invest and offer technology to build the power plants in Balkhash.”

Asking for anonymity for he was not authorized to speak to the media, he expected that the Korean consortium’s investments will have a positive effect on future business deals related to the power plant project.

The two countries agreed to come up with supportive institutional measures for the stable operation of the project.

Korea and Kazakhstan also signed a joint venture contract concerning the construction of a gas-chemical complex in Atyrau, a coastal city near the Caspian Sea. The $4 billion project, which aims to build the Central Asian country’s first integrated gas-chemical complex, kicked off in March this year.

In the contract, the two sides agreed on elements related to governance of the joint venture, such as the size of investment, shareholders’ duties and the structure of the board of directors.

The two also clinched a memorandum of understanding (MOU) on cooperation to finance the project. By signing the two accords, Korea and Kazakhstan laid the foundation to press for the complex project.

Nearly 20 binding and non-binding accords, including the Balkhash and Atyrau projects, were finalized on the sidelines of President Lee Myung-bak’s summit talks with his counterpart Nursultan Nazarbayev held here.

Lee arrived Wednesday after wrapping up his trip to Uzbekistan.

Lee and Nazarbayev agreed to work closely together to move the construction projects forward. They concurred that the fates of these projects hold the key to economic cooperation between the two countries as the Central Asian nation strives to diversify its industries.

Among Central Asian nations, Kazakhstan has received the largest investment from Korea. Several Korean firms are doing business in the Central Asian country, where per capita GDP is approximately $9,000.

Due to the significance of the country in trade, Lee has held summit talks with Nazarbayev every year since he was sworn in as President in Feb. 2008. The two governments agreed to upgrade bilateral ties to a strategic partnership in 2009.

At the summit, Lee praised the Kazakhstan leader for the decision to participate in the Seoul Nuclear Summit slated in March next year.

The two leaders followed the talks with lunch. In a speech at the lunch, Lee proposed that the two economies cooperate closely to boost bilateral trade volume to nearly $2 billion, twice the current level, by 2015.

Meanwhile, approximately 200 business leaders and high-ranking officials from of the two countries, including Prime Minister Karim Massimov and LG Group Chairman Koo Bon-moo gathered at a forum held at the Rixos Hotel.

Kazakhstan was Lee’s last stop in his five-day trip to three Central Asian countries. After completing the official schedule, Lee aboarded a presidential jet heading to Seoul. He arrives in Seoul today.