The future of hydropower in Kazakhstan: Potential and investments
The hydropower potential of three regions in Kazakhstan will be studied for the construction of hydroelectric plants, with consulting services funded by the Asian Development Bank (ADB). Kazinform News Agency's correspondent in London conducted interviews with Kazakhstan's Minister of energy, Almasadam Satkaliyev and Fumiko Cleo Kawawaki, Principal Director and Head Office for Markets Development and Public-Private Partnership at the ADB.
Mr. Satkaliyev, can you tell us about the agreement? What does it entail, and what specific goals does Kazakhstan have for developing hydropower in the coming years?
We have signed an agreement with the Asian Development Bank to provide consulting support, which will include grants to research the hydropower potential of three regions in Kazakhstan.
These regions include the Irtysh-Zaysan, Alakol, and Balkhash basins, which have significant hydropower potential. We are talking about the construction of small and medium-sized hydroelectric power plants, as well as pumped storage stations.
The agreement aims to conduct the first auction for a 600 MW hydroelectric project. These projects will potentially be financed with a syndicate organised by the ADB.
This effort focuses on a quality analysis and detailed expert study of new data on hydroelectric station construction. The data used previously was collected in the last century and definitely needs updating. This includes assessing the current state and reduction of glacier volumes, changes in river courses due to weather factors, and lateral inflow, which will help accurately predict the type and location of hydroelectric stations needed.
Building hydroelectric stations is crucial for Kazakhstan, as it represents a major step in replacing fossil fuels. We're talking about clean electricity and efficient water resource use, including irrigation needs, water conservation, supply issues, and power regulation that dam-type stations facilitate.
Overall, the ADB's strong interest in these projects is also due to their regional significance, ensuring stable energy supply and rational water use across the area.
Kazakhstan has big plans for developing hydropower, including stations on the Irtysh river, acting as counter-regulators for, say, the Shulbinsk and Semipalatinsk HPPs. The unique hydropower potential of Semirechye and vast opportunities in southern Kazakhstan are also on the table.
The ADB's willingness to provide grant funding and financial support indicates that the preparatory work will be conducted at the highest quality level, allowing us to hold tenders soon and invite both international and Kazakhstani investors to participate.
How does the Ministry of energy plan to ensure the environmental sustainability of new hydropower projects?
Hydropower stations inherently offer great potential as green technologies, leaving a zero-carbon footprint and promoting rational water use. Such projects involve strict requirements for optimal water resource use, fish stocking, and hydro accumulation potential. We will focus on maximising these opportunities during the planning and preparation of tenders for these projects.
In which regions of Kazakhstan is the most significant hydropower development expected, and why were the Balkhash, Alakol, and Irtysh-Zaysan basins chosen?
Wherever there is potential in Kazakhstan, it will be utilised. As mentioned, this includes southern Kazakhstan, Semirechye, and Irtysh. We are also considering the Alakol basin, which has numerous rivers suitable for hydroelectric station construction.
Kazakhstan's tender mechanism, which attracts investors on open, transparent, and competitive terms, will promote the large-scale development of this energy sector.
What steps is the Ministry of energy taking to attract investments and technologies to reduce methane emissions?
Kazakhstan has joined the global initiative to reduce methane emissions, announced officially at the 28th Climate Change Conference in the UAE, and has already demonstrated significant reductions — over 1 million tons in CO2 equivalent.
We have completely banned the flaring of associated gases, a process now strictly regulated. Together with USAID, we have begun preliminary studies on decarbonizing the oil and gas industry using the best technologies and research. All major national oil companies have plans for ESG programs to reduce emissions.
Kazakhstan’s ambitious goal to become carbon-neutral by 2060 is well-founded. We are currently ahead of schedule in introducing renewable energy sources, which already account for about 6% of total generation.
Lastly, what measures are taken to minimise the impact of hydropower projects on local ecosystems and populations?
Extensive preliminary work is done when planning hydroelectric stations. The experience of development institutions is invaluable here because numerous global projects consider environmental legislation, irrigation, agricultural needs, fish spawning grounds, and animal migration. To start construction, the most up-to-date technical and economic studies will include a significant environmental section to minimise environmental impact.
Ms. Fumiko Cleo Kawawaki, what are ADB's expectations regarding the participation of international investors in the first auction for the construction of a 600 MW hydropower plant?
This is a significant opportunity for international investors, and we are committed to attracting the most technologically advanced and innovative companies worldwide to bid on this project. Given that this is an open and transparent auction, we anticipate a high level of interest.
How does ADB plan to ensure transparency and competitiveness in the auction process for hydropower projects?
As part of ADB's transaction advisory services, we adhere to established standards and best practices, which international investors recognize. We will maintain open communication and hold public consultations with potential investors to ensure that information is shared freely and transparently.
The Kazakh government, in collaboration with us, has also guaranteed transparent competition, which is crucial for achieving the best pricing. In projects where open competition was implemented, the value achieved was 17 times better than in bilateral transactions. Therefore, we strongly advocate for transparent and open competition.
Does the ADB plan to continue supporting Kazakhstan in achieving its carbon neutrality goal?
ADB is honoured to have this opportunity to contribute to the government's vision of achieving carbon neutrality by 2060. We look forward to undertaking more projects and providing further assistance, in collaboration with the government, to make this vision a reality.
Thank you so much for the interview.
