To implement the national project aimed at modernizing the energy and utility sectors, the issue of attracting funds from the Unified Accumulative Pension Fund (UAPF) on a market basis is being considered. This was announced at a government briefing by Deputy Prime Minister Kanat Bozumbaev, as reported by a correspondent from the Kapital.kz business information center.
"We expect to attract part of the funds from the UAPF on a market basis: companies will borrow (money - Ed.) either through securities or through loan agreements. They will borrow and then return the funds with an interest rate after some time. If the interest rate (for attracting funds - Ed.) today is 11-12%, possibly higher, or exceeds 10%, we will subsidize these few percentage points for these companies. Companies in the utility and energy sector are usually highly liquid and reliable, as there is no decline in the consumption of utility services in our country and none is anticipated," he clarified.
According to Kanat Bozumbaev, one of the challenges in attracting funds in the market for utility and energy companies has been the tariff policy.
"We plan to slightly change the tariff policy so that the income from tariffs covers the return of fixed assets and these 10%. In other words, the return of funds for the creditors of the national project will be guaranteed by a reasonable tariff policy, which will be implemented by the Committee for Regulation of Natural Monopolies under the close supervision of the government," Kanat Bozumbaev added.
He emphasized that the funds will be returned to the creditors of the national project – both banks and the UAPF. "This is reliable. It is better than placing (pension assets - Ed.) in the securities of any states, as we will at least be working for the benefit of the national economy," he concluded.
As explained by Deputy Minister of National Economy Arman Kassenov, the issue of using part of the UAPF funds for the national project is still unresolved.
"They may be used, or they may not. But even if they are, it will be from 0 to 25%, roughly speaking. This means that each year, approximately 1.5 trillion tenge will be needed for the national project, of which 0 to 25% could potentially be financed by the UAPF," Arman Kassenov specified.
He noted that this is a small amount relative to the annual growth of UAPF assets.
"There is no need to worry. The investment program is significantly smaller than the increasing assets of the pension fund... The utility sector is one of the least risky. There is global statistics that classify 110 industries, and the utility sector ranks second from the bottom in terms of risks. These are minimal risks, as there is a stable customer base and maximum predictability regarding tariffs," Arman Kassenov emphasized.
He stated that the government is interested in ensuring that UAPF funds are invested in the safest assets and industries.
"UAPF funds will not be directly allocated to subjects of natural monopolies in any case..." he concluded.