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03:13Which regions face the biggest social risks from the energy transition and how will the government make sure they benefit
03:22from the new economic and investment opportunities?
04:07Mr. Biva, thank you so much for your time today.
04:09Thank you.
04:13Helping Kazakhstan establish an investment-ready renewable energy market is the European Bank for Reconstruction and Development, a key partner
04:22in the Kajet Just Energy Transition platform.
04:25We're now joined by Yerlan Ramazanov, EBRD Deputy Head of Kazakhstan and Regional Head of Energy.
04:34Mr. Ramazanov, welcome.
04:36Thank you. Thank you for having me today here.
04:38How investment-ready would you say Kazakhstan's renewable energy market is today?
04:44And what role can Kajet play in increasing its growth potential?
04:50It is almost there. But at the same time, Kajet, the Kazakhstan Just Energy Transition platform, it is an initiative
04:57of the government of Kazakhstan.
04:58I think that any investment project is successful if it has the resource.
05:04And here I think that Kazakhstan is blessed by the natural resources needed for the renewable projects.
05:09It also has this goal to support development of enabling, business enabling, investment enabling, regulatory framework for the further development
05:19of renewables and integration of the battery storage capacity expertise which is needed.
05:25And here I think that the just part is so important. And all of this will come to the question
05:30of financing.
05:31How have renewable energy auctions and longer term power purchase agreements changed the investment climate for renewable projects in Kazakhstan?
05:41The system of auctions and long term PPAs, power purchase agreements, it actually gave a clear understanding of the rule
05:50of the game to the investors.
05:51It set a risk allocation between the government and the developers effectively and eventually allowing for the banks to provide
06:01the financing for this type of projects.
06:03And for the first project EBRD financed in Kazakhstan, it dates back to 2015. And over this 11 years of
06:13experience, I would say that the agreements are being honored and the offtaker is paying in full and on time.
06:20I think that also the cross sectoral impact is also why two simple facts. The first one is the tariff.
06:28Since 2018, when the auction system was introduced, comparing to the tariffs in 25, they decreased two times in Kazakhstan.
06:38And the second one is that Kazakh companies, domestic companies, they established the experience building and operating renewable energy projects,
06:50therefore bringing this expertise in the country.
06:53What are the biggest remaining barriers to attracting private and international investments into Kazakhstan's renewable energy sector?
07:00First, I think that there are technical obstacles. And this is the grid and the stability of the grid, particularly
07:07the balancing of the grid.
07:08Second one is the regulatory framework, which still needs improvement. For example, as part of also Cajiat, we are aiming
07:16to work with the authorities to bring into operation the regulatory framework for the battery storage projects, for the pump
07:24storage projects.
07:25And the third one, I think that long-term investors, they need stable rules and they need a vision.
07:34And from that perspective, Cajiat, with a vision to add 10 gigawatts of new renewable capacity by 2035, gives this
07:42vision to the investors, saying that it is available and that these projects are to be implemented in Kazakhstan.
07:48Mr. Ramazanov, thanks so much for your time today.
07:50Thank you so much.
07:54That's it for now. See you in the next episode of EastWest Connect.
