National Innovation Fund Of Kazakhstan Industrial-innovative strategy of Kazakhstan: new...

National Innovation Fund Of Kazakhstan

Industrial-innovative strategy of Kazakhstan: new opportunities for the US

business

September 9, 2005

San Diego

2www.nif.kzwww.nif.kz

• Established May 30, 2003

• Charter capital $ 150 million

• Shareholder Government of Kazakhstan (100%)

• Associate member of the European Private Equity and Venture Capital Association and Singapore Venture Funds Association

National Innovation Fund Republic of Kazakhstan


We: Create venture funds together with domestic and foreign investors

Finance promising applied R&D

Make equity investments in innovation projects and infrastructure for innovations

Establish technology business incubators and centers of excellence

•Increase innovative activity in Каzakhstan

•Support and promote development of high technologies

Our mission:Our mission:

How we achieve our objectivesHow we achieve our objectives



Development Institutions in Kazakhstan:

• Kazakhstan Investment FundKazakhstan Investment Fund

• Kazakhstan Development BankKazakhstan Development Bank

• Export Insurance CorporationExport Insurance Corporation

• National Innovation FundNational Innovation Fund• Center for Marketing and Center for Marketing and

Analytical ResearchAnalytical Research

• Center for Engineering and Transfer of Center for Engineering and Transfer of

Technology Technology

• Kazakhstan Contract AgencyKazakhstan Contract Agency

Corporate Investors

Research Institutes, centers of excellence

Universities, laboratories, IC2, MIT, CRDF

International Financial Organizations

Kazakhstan & Foreign Governments

National Academy of Science



Venture FundsInnovation

projects

Infrastructure conducive to innovation

Applied research and development

Types of investments

50% 35% 10% 5%

Investment strategy of the Fund

$5 mln $0.3 mln $0.25 mln$10 mln

Investment limits



Priorities of the FundPriorities of the Fund

• Information technology

• Alternative sources of energy

• Biotechnologies, pharmaceuticals

• New materials and nanotechnology

• Technologies for hydrocarbon industries and related services


7www.nif.kwww.nif.kzz

• Investment policy is in line with the Fund objectives• The Fund is a minority shareholder (up to 49%)• Professional management team

• New technology or advanced existing product/technology• Project is commercially viable• Minority interest of the Fund (up to 49% of

chartered capital)• Well defined time-horizon for investment• Staged financing• Qualified management

Principles of investment in venture funds:

Principles of investments in innovation projects:


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1st Stage 2nd Stage Total Capital

• Areket VC Fund $5 mln. $10 mln. $21 mln.

• Advant VC Fund $5 mln. $10 mln. $21 mln.

• Centras VC Fund $5 mln. $10 mln. $21 mln.

• CASEF Private Equity $2 mln $6.6 mln. $17.6mln.

• Wellington Partners $10 mln. $180mln.

• Halyk Private Equity $ 20 mln.

• Kazakhstan-Baltic VC Fund $ 20-50 mln.

• Kazakhstan-Asian Technology Fund $ 20-50 mln.

• Kazakhstan Technology VC Fund $ 20 mln.

The Fund’s Investments in Venture Funds

Our plans:

Our current portfolio:

joined partner

founder



The NIF in the world venture funds system

«CASEF» (in cooperation with IFC, SECO, SEAF)

European Venture Funds Association

NIF «Wellington III Tech. Fund L.P.» (Germany)


Singapore Association of Venture Funds

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• Telecommunication

• Space engineering

• Pharmaceutical industry

• Mining/gas service industries

Our current portfolio: 5 projects for $72.5 mln. in:

Our plans: 16 projects for $36 mln. in:

• Software development

• Hi-Tech

• IT technologies

• Telecommunication

• Pharmaceutical/bio-technologies

The Fund’s Investments in innovation projects


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Perspective areas for cooperation: Wind power generation industry

• Kazakhstan’s wind energy potential capacity - 1.8bln. kW-hr

• Pilot project on construction of the first wind power station in the Jungar Gate in the South-East of Kazakhstan

• Max. capacity - 5.5mWt.

• Total cost of the pilot project - $5.5 mln.

UNDP - $1.0 mln.

NIF - $2.7mln.

US/EUN investors - $1.8 mil

• Second stage - $ 170.0mln.

The winner gets a contract for guaranteed purchase of electric power for a max. price of 3.5 cents/KW/hr.


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2 stage (commercial phase) – drilling and exploration of 110 commercial wellsTotal Cost: $180-220 mln, duration: 25 years

Fund: 35% ($7 mln)

Petrol Total Establishment - 20% ($4 mln);

US/EUN investors - 45% ($9 mln).

Operator: Schlumberger

STAGES:

1 stage (pilot phase) – drilling of 6 pilot wellsTotal Cost: $13-20 mln, duration: 12-18 months

Perspective areas for cooperation: The Methane Project (Karaganda, Central Kazakhstan)


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Perspective areas for cooperation:

•Kazakhstan pharmaceutical market - $518 mln

•Share of domestic pharmaceutical industry – 9%

•Production of antibiotics in Stepnogorsk, Central Kazakhstan.

•Total project cost - € 45-50 mln.

•Start of industrial production - 2008 year

Other perspective projects includes:

- Production of anti tuberculosis medications – $20 mln;

- Production of bio-degradable packaging – up to $40 mln;

- Production of insulin – up to $150 mln.


Pharmaceutical Industry

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Perspective areas for cooperation:

•Total area – 340 hectares

•Free economic zone

•Includes 4 clusters:

•43 ongoing projects with the leading high tech companies


IT City “Alatau”

- Manufacturing - Training - Apartments & leisure - Commerce

We offer US companies partnership in managing the IT city and developing high tech projects

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Collaboration with the US:

•Joined R&D program with CRDF

•Center of Excellence with the World Bank

•Two business incubators with the IC2 at Austin, Texas

•Flagship Venture Funds 2004, LP


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Thank you

26A, Abay avenue, Almaty, 050013Republic of KazakhstanTel: 011-7- 3272 599816Fax: 011-7- 3272 599839 E-mail: [email protected]@nif.kzWeb-site: www.nif.kzwww.nif.kz

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