While Kazakhstan sleeps, subsidies go elsewhere

When was the last time you heard of a Kazakhstani company receiving direct funding from the Eurasian Economic Union (EAEU)? Not a 20% “preferential” loan, not a local government grant – but an actual union-level subsidy to cover interest payments on a loan? Exactly. Meanwhile, other member states are actively tapping into the EAEU’s new financial support mechanism for cooperative projects, introduced by the Eurasian Intergovernmental Council in October 2023.

Russia: Turning Union Funds into a Development Tool

Russia not only approved the mechanism first – it’s also become its main beneficiary. The program includes major state-controlled banks such as Sberbank, VTB, Gazprombank, Promsvyazbank, and Russian Export-Import Bank. While public information is limited, inside the system everything runs smoothly: if a company meets the criteria, it can apply for an interest subsidy that offsets Russia’s key rate. With the Central Bank’s rate at 21% (as of early 2025), businesses end up paying just around 6.5% annually – a 14.5 percentage point discount. That’s serious support.

Kyrgyzstan: Fast, Efficient – and Almost Free

Kyrgyzstan went even further. It included 13 local banks in the mechanism and brought in the Kyrgyz-Russian Development Fund. According to the Fund’s official data, projects under this scheme get loans at 10% interest – with 9% of that subsidized by the EAEU. This means businesses may pay as little as 1% per year.

Even better, the Fund is designed specifically to support Kyrgyz-Russian projects, giving them a clear advantage. All that’s needed is a third EAEU partner – and you’re almost at the finish line. These loans are, for all practical purposes, a gift.

The Kyrgyz Ministry of Economy is actively promoting this opportunity. The Fund has the experience and resources to issue loans efficiently. As a result, new cooperative projects are already forming – quietly, without much fanfare, but with real future support lined up.

Kazakhstan: Silence on the Airwaves

Kazakhstan is officially part of the mechanism too. Eleven banks and four development institutions are involved, including the Industrial Development Fund (IDF) and the Development Bank of Kazakhstan.

In Q1 2025 two Kazakhstani-linked projects were approved. One is Kazrost Engineering Ltd, a local manufacturer of agricultural machinery using Russian and Belarusian components. Thanks to the EAEU subsidy, the company’s loan interest was cut by 15.25 percentage points, reducing the rate to just 3%.

The second is Astana Kala Kurylis, a Kazakh firm providing engineering and construction services for the Moscow–St. Petersburg high-speed railway.

These cases show that Kazakh companies can benefit from this mechanism – lowering borrowing costs and integrating into EAEU supply chains. But the problem is: no one’s talking about it. The banks’ websites say nothing. Applications are accepted, but few even know the option exists.

In reality, while Kazakh businesses sleep, their neighbors are already lining up for funding.

What Can Be Done Now?

Kazakhstan’s Industrial Development Fund could become the national entry point for this mechanism. To do that, it needs to:

•  Update its charter to include interest subsidies;

•  Develop clear selection and subsidy calculation rules;

•  Set up a system for receiving applications – through banks or directly on the IDF’s website;

•  Launch a serious information campaign – not a token effort, but a full rollout via forums, industry associations, banks, regional chambers of commerce, social media, and development institution platforms.

Importantly, this should not be left only to the Ministry of Trade. The message needs to be everywhere – so businesses see it as a real, working tool, not a theoretical policy.

With proper coordination between ministries and financial institutions, Kazakhstan could see a real impact: more cross-border cooperation, more high-value production – and, crucially, access to additional money to support local businesses.

This union-level subsidy program is not just a policy – it’s a chance. While our neighbors are making the most of it, Kazakhstan seems stuck on the sidelines.

If we want to lead the EAEU in industrial integration, it’s time to wake up.

While Kazakhstan sleeps, the neighbors are counting subsidies.

Note: All information in this article is based on publicly available sources including the official websites of the EAEU, national governments, the Kyrgyz-Russian Development Fund, and Kazakhstan’s Ministry of Trade and Integration.