00:09Kazakhstan is aiming to mobilize nearly 18 billion euro in investment in cleaner energy with support
00:16from the European Bank for Reconstruction and Development. Investment from both public and
00:21private sources will be channeled through Kajet, Kazakhstan's just energy transition platform,
00:27which is due to be officially launched at COP31 in Turkey. Welcome to East-West Connect. We highlight
00:35business and investment opportunities in Kazakhstan and across Central Asia, connecting the region with
00:40Europe and beyond. Around half of the 18 billion in total investment will help deliver 10 gigawatts
00:46of new renewable capacity by 2035. A quarter of the funding, or around 4.5 billion, will go towards
00:54integrating renewables and improving the reliability of the power system. Another quarter will support
01:00the electrification of transport, industry and SMEs, alongside upgrades to electricity networks and smart
01:07energy systems. The move is expected to cut greenhouse gas emissions by over 20 million tons a year,
01:13equivalent to around 7% of Kazakhstan's energy-related GHG emissions. More broadly,
01:19Kajet supports Kazakhstan's existing commitments to carbon neutrality by 2060, including a target to
01:25reduce net GHG emissions by up to 25% by 2030, compared with 1990 levels. To discuss what this means
01:34for
01:34Kazakhstan's energy transition and its wider impact, we're now joined by Saulya Sabiyeva, Climate Policy
01:40Director at the Ministry of Ecology and Natural Resources. Ms. Sabiyeva, welcome.
01:47Thank you very much for your invitation. What are the biggest projects currently in the pipeline
01:52under Kajet, and how much investment are they expected to attract?
01:56Sistema Kajet, on today's day, already includes large projects
02:00for the renewable sources of energy sources. In Dubai, at the conference of the
02:04Kajet, it was announced in 2023. The project was announced on one gigawatt. It's the building of
02:10a wind power station in Jambulsk, in the village of Mirny. This project was included in the platform
02:19Kajet platform. The project was announced on about 900 million dollars in investments.
02:24What are Kazakhstan's biggest investment opportunities in the just energy transition,
02:29and what international partners? Is Kazakhstan looking to attract through Kajet?
02:34We are a country that is dependent on electricity. And, of course, we have large
02:39TETS, large electrical stations. We need modernization of these networks. We also need
02:47a re-qualification of workers of energy companies. And the energy transition today, the Ministry of Ecology,
02:53we actively interact with our partners. It's partners of countries, the European Union,
02:58first of all. Our constant partner is the Great Britain. We also work with the Green
03:03Climate Fund and the Global Ecological Fund. In addition to that, we interact and
03:09activate our cooperation with the Climate Investor Fund.
03:14Which regions face the biggest social risks from the energy transition? And how will the government
03:21make sure they benefit from the new economic and investment opportunities?
03:25I think that, in the first of all, with the difficulties, the big areas will be faced with the big
03:30areas,
03:32regions such as the Karagandinsk region, the South Kazakhstan region, the South Kazakhstan region,
03:36also the South Kazakhstan region. And, in general, those regions where there are
03:42electric energy, large TETS and large electric stations. But, before we stop
03:50leaving the oil, we need to calculate. And these research in the platform of our partners,
03:58which we expect, will be given results in Kazakhstan. And, in the future, we can
04:02in the portfolio of projects already calculate our large infrastructure projects.
04:07Mr. Beeva, thank you so much for your time today.
04:13Helping Kazakhstan establish an investment-ready renewable energy market is the European Bank for
04:20Reconstruction and Development, a key partner in 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.
04:35Thank you. Thank you for having me today here.
04:38How investment-ready would you say Kazakhstan's renewable energy market is today? And,
04:45what 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,
04:56it is an initiative of the government of Kazakhstan. I think that any investment project is successful if
05:02it has the resource. And, here, I think that Kazakhstan is blessed by the natural resources
05:07needed for the renewable projects. It also has this goal to support development of enabling,
05:14business-enabling, investment-enabling, regulatory framework for further development of renewables
05:20and integration of the battery storage capacity expertise which is needed. And, here, I think that
05:26the just part is so important. And, all of this will come to the question of financing.
05:31How have renewable energy auctions and longer-term power purchase agreements
05:37changed the investment climate for renewable projects in Kazakhstan?
05:41The system of auctions and the long-term PPAs, power purchase agreements,
05:46it actually gave a clear understanding of the rule of the game to the investors. It set a risk
05:53allocation between the government and the developers effectively and eventually allowing for the
06:00banks to provide the financing for these types of projects. And, for the first project EBRD financed
06:07in Kazakhstan, it dates back to 2015. And, over these 11 years of experience, I would say that the
06:15agreements are being honored and the off-taker is paying in full and on time. I think that also the
06:22cross-sectoral impact is also why two simple facts. The first one is the tariff. Since 2018, when the auction
06:32system was introduced, comparing to the tariff in 25, they decreased two times in Kazakh-Thinge. And, the second one
06:39is that
06:41Kazakh companies, domestic companies, they established the experience building and operating renewable energy projects,
06:50therefore bringing this expertise in the country. What are the biggest remaining barriers to attracting
06:55private and international investments into Kazakhstan's renewable energy sector? First, I think that
07:01there are technical obstacles. And, this is the grid and the stability of the grid, particularly the balancing of the
07:08grid.
07:08Second one is the regulatory framework, which still needs improvement. For example, as part of also
07:15Kajiat, we are aiming to work with the authorities to bring into operation the regulatory framework for
07:22the battery storage projects, for the pump storage projects. And, the third one, I think that long-term
07:30investors, they need stable rules and they need a vision. And, from that perspective, Kajiat, with a vision to
07:38add 10 gigawatts of new renewable capacity by 2035, gives this vision to the investors, saying that it is
07:44available and that these projects are to be implemented in Kazakhstan. Mr. Ramazanov, thanks so much for your
07:49time today. Thank you so much. That's it for now. See you in the next episode of East-West Connect.
