The Bank was established in 1991 under the name of Al-Baraka Bank Kazakhstan and renamed “Bank Caspian” following its acquisition by LUKoil in 1995. In 1997, the Bank became a joint stock company, following the merger of Bank Caspian with KazdorBank, Kazakhstan. In December 2006, Baring Vostok Capital Partners (BVCP), a leading private equity firm in the former Soviet Union, became a controlling shareholder with an equity share of 51%.

Today, Baring Vostok Private Equity Partners (BVCP) and Kazakh businessman Vyacheslav Kim own 94.11% of the Bank Caspian through a Dutch registered company, Caspian Group B.V., owned 51% by BVCP and 49% by Mr. Kim. The remaining shares are held by minority shareholders. BVCP was founded by Baring Private Equity Partners (BPEP) as the management company for a private equity fund focused on Russia in 1994. Today, BVCP is an independent partner and member of the Baring Private Equity International Group which is a $3.5 billion global private equity group specializing in CIS countries. BVCP has invested funds in a range of new projects, including gas projects in Kazakhstan (2005) and Russia (2006); internet search engine Yandex, billboard advertiser Gallery Group, retail chain Nezabudka, and Bank Caspian.

The total project cost is estimated to be $80 million in the form of a senior loan of $80 million for up to 7 years with 2 years grace plus a $25 million trade line to support the Bank’s trade finance business.

80.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	80.0
Equity

* These investment figures are indicative

Bank Caspian is headquartered in Almaty, Kazakhstan with 40 full branches, 107 small offices and 600 points of sale throughout Kazakhstan. It has the country’s third largest branch network providing access to finance across the country.

The anticipated development impact of Bank Caspian’s continued support of Kazakhstan’s growing SME business is expected to be far reaching in terms of its economic and financial support for businesses with previously limited access to credit, providing a stimulus for employment generation and growth of smaller enterprises. In Kazakhstan, there are approximately 222,000 registered million small and medium enterprises as of October 2005, employing 1.7 million members of the workforce and contributing approximately 43% to the country’s GDP at end 2004. Based on Bank Caspian’s average SME loan size, the project is expected to reach an estimated 2000 entrepreneurs during the tenor of the facility funding borrowers through Bank Caspian’s 147 branch and office network located throughout Kazakhstan.

IFC’s seven year senior loan will support Bank Caspian’s continued focus on the SME sector, enabling it to better manage borrowing and lending tenors as well as to provide longer term funding to the SMEs themselves.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the FI portfolio, and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of:

- The IFC FI Exclusion List; and/or
- The applicable National Social and Environmental Laws and regulations; and/or
- The IFC Performance Standards.

IFC will also review, if required, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.

Based on the review, the project will be required to:

- Develop an, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.