Kazakhstan eyes $20bn investments in thermal power plants and utilities facilities

Kazakhstan needs 20 billion US dollars worth investments to put into practice its national project for modernization of energy and utilities sectors, Deputy Premier Kanat Bozumbayev said during the 7th Kazakhstan Global Investment Roundtable (KGIR-2024), Kazinform News Agency correspondent reports.

According to Bozumbayev, the national project for modernization of energy and utilities sectors is yet to be approved before the yearend. The project provides for large-scale renewal of worn-out infrastructure.

There are plans to attract around 16 billion worth of investments to modernize 1,600km of heat supply networks (bringing the deterioration rate down to 42%), 78,000km of electricity networks (down to 51%), 4,700km of water supply networks (down to 34%) and 2,600km of water disposal networks (down to 41%). This will lead to a 27% reduction in the number of accidents. In order to modernize and form new electricity generation, investments to the tune of 4.7 billion US dollars are set to be attracted, enabling to lower the deterioration rate at stations by 25% as well as increase the installed capacity to 32.6GW, said the Kazakh Deputy Premier.

The country eyes four sources of funding, including domestic and international financial institutions, second-tier banks, budget funds and the National Fund as well as shareholders’ or business owners’ funds.

To make the national project attractive investment-wise, changes are to be made to the tariff methodology, enabling to return investments and guarantee necessary cash flows. As one of the instruments to return investments, the signing of a trilateral agreement between the borrower, the infrastructure company and the regulating authority, said Bozumbayev.

According to him, to lessen the impact on tariffs, the possibility of subsidizing the interest rate for loans is being reviewed.

Bozumbayev stressed that under the project it’s planned to engage domestic manufacturers to the full.

In addition, construction of 27 more production facilities will be required. The volume of domestic products to be used is to be over 7.1 billion US dollars… Investments to be attracted to implement the national project are to increase the economic growth by around 2% annually, added the Kazakh Deputy Premier.