ORDER OF THE MINISTER OF ECONOMY AND BUDGET PLANNING OF THE REPUBLIC OF KAZAKHSTAN

of August 29, 2008 No. 187

About development of Rules of establishment of financial borders and priorities of adoption of concessionary obligations

According to the subitem 4) article 9 of the Law of the Republic of Kazakhstan of July 7, 2006 "About concessions", PRIKAZYVAYU:

1. Approve the enclosed Rules of establishment of financial borders and priorities of adoption of concessionary obligations.

2. To impose control of execution of this order on the vice-Minister of Economy and Budget Planning of the Republic of Kazakhstan Kusainov M. A.

3. This order becomes effective from the date of signing.

Approved by the order of the Minister of Economy and Budget Planning of the Republic of Kazakhstan of August 29, 2008 No. 187

Rules of establishment of financial borders and priorities of adoption of concessionary obligations

1. General provisions

1. These rules of establishment of financial borders and priorities of adoption of concessionary obligations (further - Rules) are established according to the subitem 4) of article 9 of the Law of the Republic of Kazakhstan of July 7, 2006 "About concessions" for the purpose of determination and regulation of method of calculation of limit of concessionary obligations.

2. The main objectives provided in these rules are:

non-admission of excessive growth of concessionary obligations of the Government of the Republic of Kazakhstan;

development of the domestic market of debt instruments.

3. The size of limit of concessionary obligations is rounded with an accuracy of one million.

2. Procedure for determination of limits of concessionary obligations

4. The authorized state body on economic planning of the Republic of Kazakhstan in case of determination of limit of concessionary obligations applies the following calculation procedure:

Lppgov - limit of concessionary obligations for the planned financial year calculated in tenge;

Lppgov1 - limit of concessionary obligations on the end of the year, preceding the planned financial year;

Bdef - the total amount of financing of deficit of the republican budget due to government borrowing in the internal and external markets in national and foreign currencies in the planned financial year;

Dppgov - the predicted amount of concessionary obligations in foreign currencies specified taking into account cross-rates in US dollars for the end of the planned financial year;

Е - the settlement rate of tenge to US dollar provided in the course of development of the republican budget for the planned financial year;

R - the coefficient established for accounting of possible currency risks.

5. During determination of limit of concessionary obligations for the planned financial year for decrease in currency risks which can arise in connection with changes of cross-rates of foreign currencies and base foreign currency (US dollar) the amount given in US dollars increases pas the certain coefficient (R) determined taking into account possible currency risks.

6. The total amount of concessionary obligations can be in corridor of 40-60% to the total amount of government debt for the beginning of the planned financial year.

At the same time, the level of concessionary obligations will be limited in the amount of no more than 1% of VVD in annual average value for the five-year period.

Thus, the limit of concessionary obligations corresponds to the following criterion:

NFRKt - the total amount of government debt for the beginning of the planned financial year.

7. Forming of limit of concessionary obligations, the budget investments accepted by the state by provision, is guided at the level of obligations, expenses on repayment and which servicing 15% of the income of the republican budget for the corresponding financial year shall not exceed.

Thus, the limit of concessionary obligations corresponds to the following criterion:

InGB - amount of the income of the republican budget in the planned financial year;

b1 - the coefficient corresponding to the average level of maintenance costs and repayment of concessionary obligations during the last three-year period preceding year of development of the republican budget;

b2 - the coefficient corresponding to the average level of maintenance costs and repayment of public debt during the last three-year period preceding year of development of the republican budget.

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