In Kyrgyzstan, a cooperation project is expected to be implemented jointly with Belarus and Russia

On May 29, the Eurasian Economic Community celebrates the Day of the Eurasian Economic Union. 11 years ago, in Astana, the presidents of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia signed the Treaty "On the Eurasian Economic Union (EAEU)". Later, during the II Eurasian Economic Forum, the President of the Kyrgyz Republic Sadyr Japarov proposed to establish the date of May 29 as the Day of the Eurasian Economic Union. The initiative found support among the heads of state, and May 29 became a memorable date in the calendar of Eurasian integration.

Thanks to its membership and active position in the EAEU, the Kyrgyz Republic has received intensive development and formed the image of a strong political player in the region. Currently, a new direction for Eurasian integration is developing in the republic - industrial cooperation of the EAEU member states. "Business Eurasia" has repeatedly addressed this topic, and on the Day of the EAEU, it proposed that the Chairman of the Board of the Russian-Kyrgyz Development Fund, Artem Novikov, discuss this important area of ​​development. The RKDF also began its formation on May 29, 2014, within the framework of the bilateral Agreement between Kyrgyzstan and Russia - "On the development of economic cooperation in the context of Eurasian economic integration." The main task of the Fund was the development of the Kyrgyz economy and bringing its level to positions equal to its partners in the EAEU.

- Hello, Artem Eduardovich! By its 11th anniversary, the Eurasian Economic Union came with a whole list of results and new initiatives. Growth rates are ahead of the world average, and trade turnover has reached a record 100 billion dollars. One of the leading areas today is the project to develop industrial cooperation within the union. What is attractive about cooperation?

- Hello! Industrial cooperation projects are a real tool for deepening integration within the EAEU. Thanks to such initiatives, sustainable cross-border value chains are created, technological alliances are developed, and the economic connectivity of the participating countries is strengthened.
Since December 2024, the Russian-Kyrgyz Development Fund has been participating in the implementation of the Eurasian Economic Commission program to subsidize interest rates on loans aimed at developing industrial cooperation. This reduces the cost of borrowing for businesses and increases the investment attractiveness of industrial projects in Kyrgyzstan. The mechanism for subsidizing the interest rate from the EEC budget allows for 100% of the key rate of the central bank of the country where the project is being implemented to be compensated. This makes it possible to implement high-capital and long-term industrial initiatives with a minimum debt burden.

— What conditions, different from those offered by partner financial organizations from the EAEU countries, does the Russian-Kyrgyz Development Fund offer for the implementation of cooperation projects?

— The Fund provides long-term financing in soms at 10% per annum. At the same time, for cooperation projects selected within the framework of the EEC mechanism, we initiate the registration of a subsidy that fully covers the key rate of the National Bank of the Kyrgyz Republic, fixed at 9%. Thus, the borrower pays only 1% per annum. In essence, this is investment lending on terms close to zero. We support the project at all stages: we consult on the program requirements, assist in the preparation of documentation, coordinate interaction with Russian and other partners from the EAEU, ensure contact with the EEC and national authorities.

— The EEC has repeatedly raised the issue of activating industrial cooperation projects, where businesses are actively invited to implement projects in the most promising areas of production. In your opinion, what is the reason for the insufficiently high rate of cooperation in the EAEU, despite the comfortable conditions offered?

— The conditions for supporting industrial cooperation are truly unique, and yet, the mechanism has not yet been widely used in Kyrgyzstan. There are some explanations for this. Firstly, businesses in the Eurasian economic space do not have a full understanding of the criteria required to receive subsidies for the implementation of cooperation projects. Most companies do not have experience in interstate industrial cooperation. In addition, to organize and manage a cooperation project at the proper level, high-quality project documentation is required: a feasibility study, a well-developed business model, a confirmed partnership with entities from the EAEU, and many other important details.
To improve the quality of domestic management of companies, the Russian-Kyrgyz Development Fund is actively working to popularize the mechanism, including consultations, public presentations, participation in industry forums and assistance in "packaging projects".

— What solution to this situation do economists from the RKDF see and recommend?

— We adhere to a proactive strategy aimed at creating a comfortable environment for cooperation in the Eurasian Economic Union. In particular, we are creating a pool of priority areas, initiating partnerships with industrial unions of the EAEU member states, with regional Chambers of Commerce and Industry and development institutions. Particular attention is paid to conducting business missions and industry sessions with the involvement of Russian partners and colleagues from other EAEU member states. Our task is to transfer the subsidy mechanism from the status of an exception to a sustainable channel for the development of the country's manufacturing sector.

— What industrial cooperation projects have been implemented in Kyrgyzstan with the support of the RKDF? Projects in which areas of production are under consideration?

— Currently, the Russian-Kyrgyz Development Fund has completed the formation and submitted to the Eurasian Economic Commission the first industrial cooperation project that meets the criteria of the interest rate subsidy program. The initiative envisages the creation of a production complex in Kyrgyzstan using equipment supplied from Belarus, Russian engineering and technological support.
The project has a high level of cross-border cooperation, technological synergy and is aimed at expanding export supplies to the EAEU countries. A number of other projects are in the preparation stage - they are undergoing internal examination, structuring and selection of cooperation links in the EAEU countries.

- Thank you for your answers and explanations.

P.V.
Business Eurasia