Kazakhstan is aiming to become a Central Asian hub for Islamic finance, with plans to launch its first corporate sukuk this year and a new Sharia-compliant bank.
"By attracting [foreign direct investment], a more effective role should be played by Islamic finance mechanisms," said Asset Issekeshev, the deputy prime minister and minister of trade and industry, who was in Abu Dhabi to announce that Astana, the Kazakh capital, would host this year's World Islamic Economic Forum, which takes place in June.
"The Kazakh government these days works very actively towards the practical introduction of Islamic finance tools within the country," Mr Issekeshev said.
Kazakhstan is seeking foreign investment to help diversify its economy into areas including petrochemicals, renewable energy, tourism and agriculture. The UAE and Kazakhstan also have "good potential" for cooperation on food security, Mr Issekeshev said.
Yerlan Baidaulet, the chief economic adviser at the Kazakh ministry of industry and new technologies, said the country had two prospective issuers for its flagship corporate sukuk, one a South East Asian company registered in Kazakhstan, and a local company.
"It's very important for us to create a regional centre for Islamic finance," Mr Baidaulet said, adding that the sukuk would be sold internationally. He said he expected it to be issued within the next two to three months.
Mr Issekeshev added that Kazakhstan could open its second Islamic bank this year, after the opening there last year of a branch of Al Hilal Islamic Bank, which is owned by the Abu Dhabi Investment Council.
Astana has courted the UAE in the past, with ventures including the US$1 billion (Dh3.67bn) Al Falah Fund, which invests directly in oil and gas projects in Kazakhstan.
Foreign direct investment in Kazakhstan is the second-highest among member countries of the Commonwealth of Independent States after Russia, with $122bn worth of inflows since 1993, Mr Issekeshev said. There has also been some direct investment from Saudi Arabia and Bahrain.
The Kazakh government is also seeking investment in renewable energy to tap the country's wind and solar potential.
"We have to admit that we are learning, but Kazakhstan has a vast potential in renewable sources of energy," said Askar Mussinov, the country's ambassador to the UAE.