The State Bank for Foreign Economic Affairs of Turkmenistan

 

Partnership for development!

Investment policy of President Gurbanguly Berdimuhamedov is aimed at the provision of high rates and improvement of efficiency of the economy. Attraction of foreign capital to the economy of Turkmenistan acquires great importance for solution of these objectives as well as for further promotion of marketing reforms, structural changes of national economy, improvement of innovative component in the conditions of active integration to the system of global trade, scientific and technological relations.

Summing up strategic priorities of investment policy of the state, the President follows existing competitive advantages of Turkmenistan in the world market, which at first, are expressed in the availability of colossal natural resources, beneficial geographic location and transit potential. Turning of the country into important transport and logistic hub of the region and continent, industrial development of natural resource deposits and production of ready-made goods from local materials with high-added value became key economic vectors of our state.

Selection of the most efficient ways of technical and technological development based on long-term forecast, analysis of external and local factors, consideration of resource base represent innovative strategy of the country in general as well as certain branches and facilities. The Head of the State notes that investment to innovative productions allows giving efficiency to the programme of development of important spheres of national economy, supporting local including private producers, successfully replacing the import and expanding export capabilities by demanded goods, which are the sources of growing income of the country.

Implementation of the state investment programme for formation of mixed national economy and provision f further prosperity of the country are leading directions in the workd of the State Bank for Foreign Economic Affairs of Turkmenistan, which operates as an agent of the Government of the country on international capital markets. The bank has gained unique experience of cooperation and collaboration with different foreign financial organizations in the sphere of attraction of foreign credits to national economy. 2018 was very successful in this aspect.

For example, in February last year, the Bank for Foreign Economic Affairs of Turkmenistan has signed credit agreement with the biggest banking concern of Germany Commerzbank to total amount of 121,082,500 euros for financing of supply of agricultural equipment of European make (Germany, France, Italy, Netherlands) for the Ministry of Agriculture and Water Management.

Conditions for participation of transnational companies in implementation of the projects in Turkmenistan have been created owing to the open door policy of President Gurbanguly Berdimuhamedov together with the measures for creation of general favourable investment climate. For example, two credit agreements have been signed with Japanese Bank of International Cooperation and other financial institutes to the amount of 152,618,478.35 US dollars and 13,101,782,598 Japanese yen for financing of the turnkey construction of 432 MW gas turbine power station in Charjew etrap, Lebap Velayat.

This major investment project has been started in November 2018. Japanese Sumitomo Corporation and Mitsubishi Hitachi Power Systems as well as Turkish Rönesans Holding are involved in this project. Built by the order of the State Power Energy Corporation Turkmen Energy, the facility will not only provide the electricity to Lebap Velayat but will also increase the export of power to neighbouring Afghanistan.

According to the Programme of social and economic development of Turkmenistan in 2018 – 2024, total volume of power energy produced in the country is planned to be increased to 33 billion kilowatt-hours. Improvement of potential of the industry will support further integration f the country to the world energy system, President Gurbanguly Berdimuhamedov highlights giving special attention to this sphere in consolidation of economic power of the country.

Expansion of geography of export routes of supply of Turkmen energy carriers to the world markets would be supported by the Agreement with the Asian Development Bank to the amount of 500 million US dollars for financing of the project of modernization of energy network of Turkmenistan.

In this regard, it is worth to make special mention that active connection of Turkmenistan to unified Central Asian energy system plays an important role in creation of additional capabilities of increment of supplies of Turkmen power energy under international project Turkmenistan – Uzbekistan – Tajikistan – Afghanistan – Pakistan (TUTAP).

Making its contribution to the achievement of the Sustainable Development Goals by Turkmenistan, the Bank for Foreign Economic Affairs has been continuing active cooperation with the UN Development Programme throughout 2018 under the Project Document with this competent international organization signed in October 2017. The partnership between the Bank and the UNDP was carried out in three main directions: improvement of mechanisms of coordination of national projects in development sphere financed by foreign credits; elaboration of middle-term strategy of innovative development of the Bank and; preparation to the introduction of digital banking in the Bank for Foreign Economic Affairs.

In the result, middle-term strategy of bank development including the introduction of digital banking has been developed with the support of the UNDP and close cooperation with the world famous consulting company Pricewaterhouse Coopers Audit S.R.L.

This strategy provides the improvement of the bank activity in all directions especially in the sphere of application of information technologies, which meets the objectives of the Concept of development of digital economy in Turkmenistan in 2019 – 2025 initiated by President Gurbanguly Berdimuhamedov. Targeted implementation of new strategy will allow considerably expand the spectrum of banking services, improving the quality and speed of services.

The document on regulation of crediting of the project financed by international and foreign institutions has been developed in the partnership with the UNDP in 2018. Adoption of this project is aimed at systematization of cooperation between the Bank and ministries and organization of Turkmenistan, it will expand the capabilities and geography of cooperation with foreign financial institutions for attraction of external credits to national economy.

Stable economic and political situation in the country, legal guarantees and Government support are among the main factors of growing attractiveness of Turkmenistan for foreign investors. Such fundamental principles as support of the entering of the country to the wolrd economy through the improvement of its export potential and level of industrialization, development of technological processes, establishment of socially oriented market economy and improvement of life level of the population have taken into consideration during elaboration of integrated measures for stimulation of investments in near future.

President Gurbanguly Berdimuhamedov highlights that together with the increment of investment volumes, it is necessary to provide the improvement of their efficiency including in improvement of organization of productions, formation of bank of investment projects supporting the growth of competitiveness of the economy of Turkmenistan in global scale.