Roads
-
Road Network Length
96,846 km
-
Road Infrastructure Quality
3.6
-
Number of PPPs Reaching FC
----
-
Value of PPPs Reaching FC
----
-
Number of PPPs with Foreign Sponsors
----
-
Number of PPPs with Govt. Support
----
FC = financial closure, Govt. = government, km = kilometers.
Note: Quality of road infrastructure: 1 (lowest) – 7 (highest).
Sources: MIID. 2022. Roads. Astana. https://www.gov.kz/memleket/entities/roads/activities/252?lang=en; World Bank. Data Bank 2022. https://data.worldbank.org/indicator/IS.RRS.TOTL.KM?locations=KZ.
The roads in Kazakhstan are classified by three types, each under the responsibility of different levels of government and their respective road organizations:
- Roads of republican importance are under the responsibility of the Ministry of Industry and Infrastructure Development (MIID) and managed by the Committee of Roads.
- Regional (rural) roads are under the oblasts/akimats and their respective transport departments.
- Urban roads and streets are under town/city municipalities.
Roads
Contracting Agencies
The Roads Committee under the MIID is the competent body that performs regulatory, implementation, and control functions in the road sector. It is in charge of planning, preparation, development, procurement, and monitoring of construction, and the operation and maintenance of the national road network. It is authorized to decide on which road passages can be subject to toll payments. It also decides on the procurement mode for the new/existing roads and then executes that procurement.
The national operator for the roads of republican importance is KazAvtoZhol, a joint stock company under the full ownership and coordination of MIID. KazAvtozhol is responsible for the operation of toll roads and the development and operation of roadside services.1
For regional projects, each oblast/large city akimat would have a transport and roads department responsible for their respective peripheral road network.
- 1As of April 2022, KazAvtoZhol is to be merged with KazakhAvtoDor, a state-owned road construction and maintenance company.
Roads
Sector Laws and Regulations
The industry-specific legal acts for the road sector are the following:
- The Law of the Republic of Kazakhstan No. 156 dated 21 September 1994 "On Transport in the Republic of Kazakhstan" (the Transport Law) defines the basis for legal, economic, and organizational activities of transport, in general.
- The Law of the Republic of Kazakhstan No. 245 dated 17 July 2001 "On Automobile Roads" (the Law on Roads) regulates the legal, organizational, and economic basis of automobile roads, their construction, operation, and development, including the provisions on toll roads.
Foreign Investment Restrictions
COMPAREDOWNLOADParameter 2017 2018 2019 Maximum allowed foreign ownership of equity in greenfield projects 100% 100% 100% LEARN MORERoads
Sector Laws and Regulations
The maximum equity investment allowed for foreign investors is 100%.
Source: ADB. 2019. Public-Private Partnership Monitor. Second EditionManila. https://www.adb.org/sites/default/files/publication/509426/ppp-monitor-second-edition.pdf; Unicase Law LLP.
Standard Contracts
COMPAREDOWNLOADType of Contract Availability PPP/concession agreement Performance-based operation and maintenance contract Engineering, procurement, and construction contract - No
LEARN MORERoads
Sector Laws and Regulations
There are no standard contracts specific to the road sector yet. ADB is currently assisting the Roads Committee and KazAvtoZhol with piloting of performance-based maintenance contracts to support road maintenance reforms. Non-standard engineering, procurement, and construction contracts are implemented under sovereign-guaranteed loans from Exim Bank of China to KazAvtoZhol.
Source: Unicase Law LLP
Roads
Sector Master Plan
The state plans for road sector development are reflected in the Nurly Zhol program, which highlights the need for an extensive network of roads both for transit and for national traffic. Over 2020–2025, the government plans to implement 18 projects on new construction and reconstruction of 10,000 kilometers of roads. To implement these projects, the government plans to raise around T3.5 trillion (approximately $7.4 billion) of budget funds and sovereign loans.
The only mention of PPP procurement mode in the program relates to the plans of investigating the possibilities of rolling out electrical charging stations along the roads in and around the major cities of Kazakhstan.
Projects under Preparation or Procurement
Roads Public–Private Partnerships under Preparation and Procurement
COMPAREDOWNLOADNote: "-" means there are no projects in the sector, or data are unavailable.
Source: Kazakhstan Public-Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022).
Roads
Features of Past PPP Projects
Procurement of PPP Projects
Roads Public-Private Partnerships procured through various modes
The Government of Kazakhstan awarded the 66-kilometer BAKAD concession project through a competitive bid, which reached a financial close in August 2020. BAKAD is the largest PPP project in Central Asia, supported by the EBRD, the Bank of China, PGGM, the Eurasian Development Bank, and the Islamic Development Bank.
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects Reaching Financial Close
Roads Public-Private Partnerships reaching Financial Close
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects with Foreign Sponsor Participation
Roads Public-Private Partnerships with Foreign Sponsor Participation
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Government Support to PPP Projects
Government Support for Roads Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Payment Mechanism for PPP Projects
Payment Mechanisms for Roads Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Summary of Projects across PPP in the Road Sector
Sector Number of Projects Total Cost(T million) Total Cost($ million) Local level 9 1,571 3.3 Republican level 2 286,499 610 Grand total 11 288,070 613.3 LEARN MORERoads
Features of Past PPP Projects
BAKAD (which reached financial close in 2020) is the only road project on a PPP modality that can be identified as bankable according to international standards and that is listed in the World Bank databank. The projects in the PPP Center's database include automotive bridge construction in North Kazakhstan oblast (signed in 2020), access road construction in Aktobe oblast (signed in 2018), construction of additional infrastructure on Almaty–Khorgos road (signed in 2017), and several service contracts in various regions (Almaty, West Kazakhstan oblast, Aktobe oblast, etc.).
Note: Currency equivalent is as of 1 September 2022.
Source: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Typical Risk Allocation for PPP Projects
COMPAREDOWNLOADRisk Type Private Public Shared Land expropriation Financing risk Inflation and cost overruns Commissioning of road; meeting hand-back standards Availability of road; meeting operating standards Traffic risk Currency fluctuations Termination payment; discriminatory change in law - Yes
Source: Unicase Law LLP.
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation - 1 1 PPP projects that received export credit agency/international financing institution support - 1 1 Typical debt:equity ratio 78:22 Time for financial close 3 years Typical concession period 20 Typical financial internal rate of return UA UA UA UA = unavailable.
Source: Unicase Law LLP.
Roads
Tariffs
Currently, there are 12 toll roads in Kazakhstan, operated and maintained by KazAvtoZhol.2 The tariffs have remained unchanged since their first introduction in 2013. They are effectively charged on a T-per-kilometer (km) basis:
- For cars—T1 per km with the possibility of obtaining discounts on monthly passes.
- For buses, depending on the number of passenger seats—from T5 to T15 per km.3 The buses on international regular routes are exempt from tolls.
- For freight vehicles—depending on load capacity, from T5 to T25 per km.4
The tariffs for end users are charged for the whole toll road section (tariff x length of the toll road section).
- 2Kazakhstan Strategy 2050 official website. https://strategy2050.kz/ru/news/platnye-dorogi-kak-oformit-godovoy-abonment/ (in Russian, accessed February 2022).
- 3Approximately $0.01 - $0.03.
- 4Approximately $0.01 - $0.05. See Sputnik.kz information website. https://ru.sputnik.kz/economy/20211123/18730980/Novyy-platnye-dorogizarabotali-v-Kazakhstane.html (in Russian).
Roads
Challenges
Some of the key challenges to the road sector PPP in Kazakhstan are as follows:
- The geographic conditions of Kazakhstan, which is a large sparsely populated country with an extremely continental climate, lead to high capital expenditures for road construction and reconstruction, and low traffic numbers, thus making road construction and operation commercially unattractive.
- Falling household incomes affect the tariff affordability and willingness to pay, making any traffic-related risk transfer commercially unattractive.
- Absence of a robust pipeline of PPP road projects reduces the interest of reputable private investors.
-
Railways
-
Railway Network Length
15,529.80 km
-
Number of Passengers
19,241 M pkm
-
Freight Volume
206,258 M ton-km
-
Railway Infrastructure Quality
4.2
-
Number of PPPs Reaching FC
----
-
Value of PPPs Reaching FC
----
-
Number of PPPs with Foreign Sponsors
----
-
Number of PPPs with Govt. Support
----
FC = financial closure, Govt = government, km = kilometers, M = million, pkm = passenger-kilometer, ton-km = ton-kilometer.
Notes: Passenger-kilometer refers to the transport of one person over 1 km, with the data expressed in millions of pkm. Ton-kilometer refers to the transport of a ton of cargo over 1 km, with the data expressed in millions of ton-km. Quality of railway infrastructure: 1 (lowest) – 7 (highest).
Sources: The Economist Intelligence Unit 2019. Infrascope: Kazakhstan Country Report. https://infrascope.eiu.com/; The Global Economy. Railway Passengers—Country Rankings. https://www.theglobaleconomy.com/rankings/Railway_passengers/; The Global Economy. Railway Transport of Goods—Country Rankings. https://www.theglobaleconomy. com/rankings/Railway_transport_of_goods/; The Global Economy. Railroad Infrastructure Quality—Country Rankings. https://www.theglobaleconomy.com/rankings/railroad_quality/.
Railroads are the backbone of Kazakhstan’s transport infrastructure. The OECD estimates investment needs in developing the railway sector at $4.5 billion. Lack of access to sea, flat terrain, and sparsely located settlements are the main reasons behind putting priority emphasis to this transportation mode in the Soviet Union times, which now carries up to a half of the country’s freight. Kazakhstan’s railways run on the Russian standard gauge of 1,520 millimeters, which hinders the use of international investors and contractors in railroad construction and maintenance. For the country to increase its attractiveness in rail transportation, it will need to invest primarily in speed improvements, reduction of maintenance costs, electrification, and construction of new lines.6
- 6OECD. 2019. Sustainable Infrastructure for Low-Carbon Development in Central Asia and the Caucasus: Hotspot Analysis and Needs Assessment. Paris. https://doi.org/10.1787/d1aa6ae9-en.
Railways
Contracting Agencies
The Transport Committee under MIID is the key competent body responsible for regulatory, implementation, and control functions in implementing the state strategy in the railway transport. It is authorized to decide which railway passages can be procured as concession/PPP projects. The Transport Committee can hire consultants for preparing and structuring such projects and sign project agreements on behalf of the government.
Kazakhstan Temir Zholy JSC (KTZ), a quasi-state enterprise and a subsidiary of the national Wealth Management Fund Samruk-Kazyna, is the national railway network operator that carry out railway track operations and maintenance, locomotive traction and rolling stock operations, and railway track freight logistics. KTZ can be legally a part of PPP agreements as a joint venture party, offtaker, or guarantor of traffic risks.
Railways
Sector Laws and Regulations
The main legislation governing the railway sector is the Law of the Republic of Kazakhstan "On Railway Transport," or the Law on Railways.
The November 2020 amendments to the Law on Railways included changes to the definition of "freight" and rules for freight transportation, which filled the legal gap that prevented KTZ from charging a transit tariff for the transportation of its own empty wagons. The amendment also extended the validity period of the temporary balancing charge. KTZ is currently undertaking a privatization program of its non-core assets.7
- 7Law of the Republic of Kazakhstan "On Amendments and Supplements to Certain Legal Acts of the Republic of Kazakhstan on Energy, Transport and State Awards" dated 9 November 2020.
Foreign Investment Restrictions
COMPAREDOWNLOAD- aExcept for trunk railway network, which is not subject to concessions/PPPs and not subject to privatization/private participation.
Source: ADB. 2019. Public-Private Partnership Monitor. Second Edition. Manila. https://www.adb.org/sites/default/files/publication/509426/ppp-monitor-second-edition.pdf; Unicase Law LLP.
Standard Contracts
COMPAREDOWNLOADType of Contract Availability PPP/concession agreement Performance-based operation and maintenance contract Engineering, procurement, and construction contract - No
LEARN MORERailways
Sector Laws and Regulations
There are no standard contracts specific to the railway sector yet.
Source: Unicase Law LLP.
Railways
Sector Master Plan
Railway sector development in Kazakhstan is guided by two strategic documents:
(i) Nurly Zhol program, which proposes that KTZ shall, with the support from the republican budget, implement three investment projects:
- modernization of the railway transit corridor section Dostyk–Moiynty,
- electrification of the railway sections Moiynty–Aktogay and Tobol–Nikeltau, and
- construction of a bypass railway line Kokpekty–Karagayly bypassing Lake Karasor.
Nurly Zhol also calls for the electrification of the existing railway lines using a PPP mechanism, as well as railway station development, operation, and maintenance.
(ii) The KTZ Strategy, effective until 2029, outlines three strategic directions:
- Improving the technological conditions for transit traffic along the trans-Eurasian corridors (e.g.,increasing the speed of transit trains, optimizing the customs processing time).
- Eliminating the bottlenecks along the PRC–European Union–PRC transit route (Dostyk-Mointy section).
- Improving the regulatory environment for a competitive carrier market and deregulation of locomotive traction tariffs.
- Privatizing 28 out of 64 non-core subsidiaries.
Projects under Preparation or Procurement
Railways Public-Private Partnerships under Preparation and Procurement
COMPAREDOWNLOADSource: Kazakhstan Public-Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Railways
Features of Past PPP Projects
Procurement of PPP Projects
Railways Public-Private Partnerships procured through various modes
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
PPP Projects Reaching Financial Close
Railways Public-Private Partnerships reaching Financial Close
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
PPP Projects with Foreign Sponsor Participation
Railways Public-Private Partnerships with Foreign Sponsor Participation
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Government Support to PPP Projects
Government Support for Railways Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Payment Mechanism for PPP Projects
Payment Mechanisms for Railways Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Summary of Projects across PPP in the Railway Sector
Sector Number of Projects Total Cost(T million) Total Cost($ million) Local level 1 468 1 Republican level 1 55,231 117.6 Grand total 2 55,699 118.6 LEARN MORERailways
Features of Past PPP Projects
The railway sector in Kazakhstan has one major PPP project, the construction of the 153-kilometer rail line Shar–Oskemen, signed in 2005.
Note: Currency equivalent is as of 1 September 2022.
Sources: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Typical Risk Allocation for PPP Projects
A typical risk allocation for railway sector projects is unavailable.
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation - - - PPP projects that received export credit agency/international financing institution support - - - Typical debt:equity ratio UA UA UA Time for financial close UA UA UA Typical concession period 23 23 23 Typical financial internal rate of return UA UA UA UA = unavailable.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Railways
Tariffs
Railway tariffs are partly market-based and partly regulated as a natural monopoly:
- Infrastructure is regarded as a natural monopoly; the Committee for Regulation of Natural Monopolies (CREM), as regulator, sets infrastructure tariffs, subject to change every 5 years or more.
- Tariffs for traction, commercial, and freight services are regulated to protect competition. The CREM updates the associated tariffs, generally at intervals of a year or more.
- Tariffs for domestic, export, and import freight railway operations are subject to regulation to protect competition, while tariffs for transit and container operations are unregulated.8
There are many elements to railway tariffs in Kazakhstan, and the calculation is complex, based on distance, type of locomotive traction, and type of cargo and freight, among others.9
- 8CAREC. 2021. Railway Sector Assessment for Republic of Kazakhstan.
- 9A detailed calculation methodology along with the current tariff levels is available at KTZ's website:https://www.ktzh-gp.kz/new-ru/shippers/cargo-transportation/.
Railways
Challenges
The railway sector faces the following challenges:
- The railway tariffs are not set to reflect the costs, and tariff-setting practices are inflexible. Certain types of freight are cross-subsidized (e.g., coal versus oil products), resulting in inefficient capacity utilization and reduced profitability of the sector.
- The dominance of KTZ in all areas of railway transportation deters private companies and investors from investing in the sector.
- Legal restrictions to private sector participation in track ownership, operation, and maintenance limit the use of PPP procurement mode and restrict private financing.
- The 1,520-millimeter track gauge limits the investor base and choice of equipment and technologies.
-
Airports
-
Number of Airports
25
-
Passenger Capacity
7.14 M
-
Airport Infrastructure Quality
4.3
-
Number of PPPs Reaching FC
----
-
Value of PPPs Reaching FC
----
-
Number of PPPs with Foreign Sponsors
----
-
Number of PPPs with Govt. Support
----
FC = financial closure, Govt. = government, M = million.
Note: Quality of airport infrastructure: 1(lowest) – 7(highest).
Sources: City Population. 2021 https://www.citypopulation.de/en/world/bymap/Airports.html; World Bank. 2020 https://data.worldbank.org/indicator/IS.AIR.PSGR?locations=BD-KH-GE-KZ-MM-PK-PG-LK-UZ-VN-CN-IN-ID-PH-TH; The Global Economy. Compare Countries. Compare countries | TheGlobalEconomy.com; Asian Development Bank. Cumulative Lending, Grant, and Technical Assistance Commitments. https://data.adb.org/dataset/cumulative-lending-grant-and-technical-assistancecommitments.
Out of 23 airports in Kazakhstan, 15 are admitted to servicing international flights, and two airports (those of Almaty and Astana) comply with the International Civil Aviation Organization IIIA and IIIB standards.
Airports
Contracting Agencies
The Civil Aviation Committee under MIID is responsible for the overall sector policies, strategy, and general oversight. The main objectives of the committee are coordination and regulation of civil aviation, ensuring the safe use of Kazakhstan's airspace, certification, and control and monitoring of the performance of industry participants.
The contracting authority for airports depends on the airport ownership allocation:
- MIID, via its Civil Aviation Committee, for republican projects and if the ownership is directly by the state.
- Local akimats, for regional projects, or if the airport is owned by regional authorities.
- Republican State Enterprise Kazaeronavigatsia has the exclusive rights to provide air navigation services in Kazakhstan. It has 15 subsidiaries registered in different regions of the country with its head office in Astana.
Airports
Sector Laws and Regulations
The main legal act governing airport sector in Kazakhstan is the Law of the Republic of Kazakhstan "On use of airspace of the Republic of Kazakhstan and aviation activity" No. 339-IV dated 15 July 2010 (Aviation Law). It covers the following:
- State regulation and state control of airspace management and aviation operations.
- Organization of airspace management, international flights, aircraft, aviation personnel, operators, airports, air services, and aviation work.
- Legal requirements in air services, including activities that affect flight operating services; air accidents and their investigation; and rescue works in relation to aircrafts, their passengers, and crew members.
Generally, the airports' assets or ownership are regarded as either of "strategic"or of "socioeconomic significance for the development of Kazakh society," which restricts private sector participation. However, not all of them are formally included in the list of strategic objects banned from privatization, as currently established by the Government of Kazakhstan. Transfer of ownership of the airports in that list is subject to additional approvals by the government.10
- 10Asian Development Bank. 2019. Public-Private Partnership Monitor. Second Edition. Manila.
Foreign Investment Restrictions
COMPAREDOWNLOADParameter 2019 2020 2021 Maximum allowed foreign ownership of equity in greenfield projects 100% 100% 100% LEARN MOREAirports
Sector Laws and Regulations
Airports can be owned by the state and/or private legal entities, including foreign legal entities, according to Article 5 and Article 64 of the Aviation Law.
Source: ADB. 2019. Public-Private Partnership Monitor. Second Edition. Manila. https://www.adb.org/sites/default/files/publication/509426/ppp-monitor-second-edition.pdf; Unicase Law LLP.
Standard Contracts
COMPAREDOWNLOADType of Contract Availability PPP/concession agreement Performance-based operation and maintenance contract Engineering, procurement, and construction contract - No
LEARN MOREAirports
Sector Laws and Regulations
There are no standard contract forms for PPPs in the airport sector yet.
Source: Unicase Law LLP.
Airports
Sector Master Plan
There is no specific airport sector master plan. The sector development plans are outlined in the second stage of the Nurly Zhol program, which highlights the need for reconstruction and modernization of the existing airfield infrastructure and construction of new ones, to ensure development of regional air transportation.
Under the first stage of the program (2015–2019), a number of significant infrastructure projects have been implemented in the civil aviation industry, including the construction of a new terminal at Astana airport, and reconstruction and modernization of the runways of airports in the cities of Almaty, Semey, Taraz, Uralsk, and Petropavlovsk. There are plans to develop transit service infrastructure through the air hubs of Astana, Aktobe, Atyrau, Aktau, and Almaty with the opening of additional international and transit routes, and modernization and renewal of the fleet of Kazakhstan's air carriers operating international flights.
Projects under Preparation or Procurement
Airports Public-Private Partnerships under Preparation and Procurement
COMPAREDOWNLOAD"-" means there are no projects in the sector, or data are unavailable.
Source: Kazakhstan Public-Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Airports
Features of Past PPP Projects
Procurement of PPP Projects
Airports Public-Private Partnerships procured through various modes
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
PPP Projects Reaching Financial Close
Airports Public-Private Partnerships reaching Financial Close
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
PPP Projects with Foreign Sponsor Participation
Airports Public-Private Partnerships with Foreign Sponsor Participation
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Government Support to PPP Projects
Government Support for Airports Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Payment Mechanism for PPP Projects
Payment Mechanisms for Airports Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Summary of Projects across PPP in the Airport Sector
Sector Number Of Projects Total Cost(T million) Total Cost($ million) Local level 2 134,217 286 Republican level 2 8,344 18 Grand total 4 142,561 304 LEARN MOREAirports
Features of Past PPP Projects
According to the PPP Center’s database, the list of projects in the airport sector includes Aktau airport (signed in 2007) and Turkestan airport (signed in 2020). There are also smaller PPP projects at airports providing information systems. Although there are intentions to start the preparation process for an airport in Northern Kazakhstan, this project is not yet listed in the PPP database.
Note: Currency equivalent is as of 1 September 2022.
Sources: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Typical Risk Allocation for PPP Projects
A typical risk allocation for airport sector projects is unavailable.
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation - - - PPP projects that received export credit agency/international financing institution support - - - Typical debt:equity ratio UA UA UA Time for financial close UA UA UA Typical concession period 30 years for Aktau; 3 years for Turkestan; 10 years for Astana Typical financial internal rate of return UA UA UA UA = unavailable.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Airports
Tariffs
Airport services are subject to natural monopoly regulation. In 2017, the commercial regulation of airport tariffs has been transferred from CREM to the Committee of Civil Aviation under MIID, which sets tariffs for the following activities:
- provision of take-off and landing services for aircraft;
- provision of aviation security;
- provision of parking area for aircraft over a certain time limit (for more than 3 hours after landing for passenger aircraft and for more than 6 hours for cargo, certified aircraft with cargo [post] to be handled [loading and/or uploading] at the airport); and
- provision of parking area for the aircraft at the base airport.
All other tariffs are either subject to anti-monopoly regulation (ground-handling services) or are non-regulated (non-aviation revenue).
Airports
Challenges
The airport sector faces these key challenges:
- Low population density and urbanization hamper internal passenger growth. Around 70% of current passenger traffic is concentrated in two airports—Almaty and Astana.
- Aviation services are cross-subsidized by fuel sales. Low tariffs for aircraft and passenger handling services make it unprofitable to operate majority of airports in the country.
- Local airports are unattractive to transit freight and passenger flows due to high fuel costs.
-
Energy
-
Power Consumption
5,599.90 kWh per capita
-
Share of Clean Energy
1.56 %
-
Electricity Access
100 %
-
Energy Imports
-116.89 %
-
Number of PPPs Reaching FC
----
-
Value of PPPs Reaching FC
----
-
Number of PPPs with Foreign Sponsors
----
-
Number of PPPs with Govt. Support
----
FC = financial closure, Govt. = government, kWh = kilowatt-hour, M = million.
Note: Share of clean energy and energy imports as percentage of total energy use. Energy access as percentage of total population.
Sources: Economist Intelligence Unit. 2019. Infrascope: Kazakhstan Country Report. https://infrascope.eiu.com/; The Global Economy. Share of Clean Energy. Country Rankings. https://www.theglobaleconomy.com/rankings/Share_of_clean_energy/; World Bank. Access to Electricity. https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?end=2018&locations=MM-KH-UZ-CN-BD-GEIN-ID-KZ-PK-PH-LK-TH-VN&start=2018&view=bar; The Global Economy. Energy Imports. https://www.theglobaleconomy.com/rankings/Energy_imports/; Asian Development Bank. Cumulative Lending, Grant, and Technical Assistance Commitments. https://data.adb.org/dataset/cumulative-lending-grant-and-technical-assistance-commitments.
The entire population has access to electricity. Kazakhstan has been a net exporter of power generation until 2021 (it is projected to face a deficit for the coming 5 years). It has transmission connections to all its neighbors except the People’s Republic of China. Electric power distribution systems are also sufficient to provide adequate access to power for all regions. However, the long-term sustainability of the system is at risk due to underinvestment in modernization and capacity replacement. Another important threat to sustainability is its heavy reliance on coal. More than 70% of generation capacities are coal-fired, which will require investment in decarbonization. For the country to be able to absorb all planned renewable capacity, given its unstable generation profiles, Kazakhstan will need to invest in the modernization of its grid, supply of balancing sources, and interregional power trade.
Energy
Contracting Agencies
In terms of private sector participation, Kazakhstan's power market is mature—generation is delivered mainly by private companies, with more than half of distribution also being in private hands. The only exclusion is the high-voltage transmission and dispatch where private ownership above 49% is not allowed by law. Past attempts to structure PPP in renewable energy have been unsuccessful due to the need of asset transfer to the state at the end of the contract, which is not customary in the power sector of Kazakhstan.
The key policy-making and supervision authority in the power sector in Kazakhstan is the Ministry of Energy (MOE). There are several committees and departments with different roles and functions within the MOE:
- The Department of Electric Power Development sets the state power sector policy and strategy (including heat supply), proposes long-term sector development plans, supervises the implementation of sector-specific state budget programs, and decides on the procurement mode of investment projects initiated by the state (including decisions on PPP).
- The Department for Renewable Energy is responsible for the state policy in supporting renewable energy, coordination of such support with other government entities and market stakeholders, drafting of renewable energy-related regulatory and legal acts, and implementing international cooperation in the renewable energy sector.
- The Committee for Atomic and Energy Supervision and Control is responsible for technical supervision and control over the power industry. It sets the technical rules of operations, issues licenses, approves commissioning of new facilities, and grants operation permissions for power generation, transmission, and dispatch.
There are several legal entities in the power sector with the special status of a national operator:
- Kazakhstan Electricity Grid Operating Company JSC (KEGOC) is the system operator of the country's unified power system. It owns and manages the assets of the national power grid. The company operates as a natural monopoly and employs more than 4,000 people. KEGOC is a subsidiary of Samruk–Kazyna and is listed on the Kazakhstan Stock Exchange.
- Kazakhstan Electricity and Power Market Operator JSC (KOREM) is the national operator of centralized trades with energy and capacity. Apart from running the platform for spot trades in energy and capacity, KOREM is also responsible for organizing and conducting renewable energy auctions for new generation.
- Financial Settlement Center of Renewable Energy LLP (FSC) is the single buyer of renewable energy and guaranteed power capacity.11 FSC on-sells the renewable energy at levelized prices to "conditional purchasers," the carbon fuel-based power plants.
- 11Guaranteed power capacity is the capacity that can be always made available, as verified by the Committee for Atomic and Energy Supervision and Control.
Energy
Sector Laws and Regulations
The main legal acts governing the energy sector in Kazakhstan are
- Law of the Republic of Kazakhstan No. 588 "On Electric Power Industry" dated 9 June 2004 (Electricity Law); and
- Law of the Republic of Kazakhstan No. 165-VI "On Support of the Use of Renewable Energy Sources" dated 4 July 2009 (Renewable Energy Law)
The Electricity Law sets the wholesale power market in four segments: (i) decentralized market for energy, (ii) centralized market for energy and for (iii) capacity, and (iv) the balancing market. The decentralized energy market is dominated by bilateral agreements between generators and large consumers at prices not exceeding the ceiling tariffs set by the MOE. The balancing market is for hourly financial and physical control over power imbalances on a single grid, currently operating in pilot mode. Both centralized markets for energy and for capacity are operated by KOREM with equal access to large-scale generators and consumers. The trades there can be of three types: short-term sales (T+day), medium-term (T+week, T+month), and long-term sales (quarter, year).
Majority of renewable energy projects are supported by guaranteed offtake of all generated energy by FSC, thus making them de facto PPPs. However, since these projects have not relied on the provisions of either the Concessions Law or the PPP Law, they are not regarded as PPP under Kazakhtan's law or considered as such by the government and local authorities. The Renewable Energy Law also allows for conclusion of direct bilateral PPAs, but this option is yet to be tested. The amendments to Renewable Energy Law introduced in 2018 launched the auctions mechanism for all future renewable energy projects willing to have access to guaranteed offtake from FSC. The bidding process on the electronic platform consists of acceptance and consideration of bids from local and foreign organizations that should be below the maximum auction price established by the state. The PPAs of such projects include a tariff indexation mechanism in accordance with changes in the exchange rate and inflation.12
The Renewable Energy Law also guarantees renewable energy facilities with free and nondiscriminatory access to the nearest point of connection to electrical or thermal grids of transmission companies. The law, however, does not give a clear guidance on the curtailment risks of the network operators.
- 12Grata. 2016. Report-Renewable Energy Projects in Kazakhstan. http://www.gratanet.com/en/publications/details/renewable_kazakhstan_2016.
Foreign Investment Restrictions
COMPAREDOWNLOADMaximum allowed foreign ownership of equity in greenfield projects 2019 2020 2021 Power generation 100% 100% 100% Power transmission 0% 0% 0% Power distribution 100% 100% 100% Oil and gas 100% 100% 100% LEARN MOREEnergy
Sector Laws and Regulations
The 2003 Law on Investments established a single investment regime for domestic and foreign investors. The Electricity Law forbids private ownership of power lines above 220 kilovolts (kV). The law also restricts privatization of KEGOC above 49% of ownership.
Source: ADB. 2019. Public-Private Partnership Monitor. Second Edition. Manila. https://www.adb.org/sites/default/files/publication/509426/ppp-monitor-second-edition.pdf; Unicase Law LLP.
Standard Contracts
COMPAREDOWNLOADType of Contract Availability Power purchase agreement a Capacity take-or-pay contract Fuel supply agreement Transmission and use of system agreement Performance-based operation and maintenance contract Engineering, procurement, and construction contract - aTemplate for a long-term power purchase agreement (PPA) is available only for renewable energy projects with Financial Settlement Center of Renewable Energy LLP. Template for PPAs available at KOREM's website are up to 1 year.
- Yes
- No
Source: ADB. 2019. Public-Private Partnership Monitor. Second Edition. Manila. https://www.adb.org/sites/default/files/publication/509426/ppp-monitor-second-edition.pdf; Unicase Law LLP.
Energy
Sector Master Plan
The use of coal as the main fuel for generating electricity and heat has significant environmental and climate consequences, thus Kazakhstan is pursuing a policy to gradually replace coal with natural gas and renewable energy sources. The concept for the transition to a "green" economy, adopted in 2013, has set ambitious goals to significantly reduce Kazakhstan's share of coal generation and has been the basis for the country's new energy policy. In October 2021, Kazakhstan unveiled its Doctrine for Carbon Neutrality by 2060 and updated its Nationally Determined Contributions which call for a series of ambitious interim targets (e.g., a 15% reduction in greenhouse gas emissions by 2030).13
However, the development of sources with a variable nature of generation, depending on weather conditions and time of day, such as wind and solar stations, exacerbates the existing problem of regulation and stability of the energy system in the face of a shortage of maneuvering capacities.
The new edition of the Environmental Code sets a large-scale task to modernize power plants through transition to the principles of "best available technologies" (BAT) and through a significant reduction in pollutant emissions. Commitments under the Paris Climate Agreement impose significant challenges for Kazakhstan to decarbonize the economy and the power industry, the fulfillment of which depends on the pace of reforming pricing policy and reviewing the mechanisms for ensuring the stability of investments in the sector.
- 13UN Partnership for Action on Green Economy. Kazakhstan Unveils Doctrine for Carbon Neutrality by 2060. https://www.un-page.org/kazakhstan-unveils-doctrine-carbon-neutrality-2060.
Projects under Preparation or Procurement
Energy Public-Private Partnerships under Preparation and Procurement
COMPAREDOWNLOADLEARN MOREEnergy
Sector Master Plan
The only energy sector project regarded as a PPP in Kazakhstan is the high-voltage transmission line, Northern Kazakhstan–Aktobe Oblast (Batys Transit), signed in 2005. No power projects are currently listed as PPP under preparation and procurement.
"-" means there are no projects in the sector, or data are unavailable.
Source: Kazakhstan Public-Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Energy
Features of Past PPP Projects
Procurement of PPP Projects
Energy Public-Private Partnerships procured through various modes
COMPAREDOWNLOADNote: Only active and concluded projects are considered in this graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
PPP Projects Reaching Financial Close
Energy Public-Private Partnerships reaching Financial Close
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
PPP Projects with Foreign Sponsor Participation
Energy Public-Private Partnerships with Foreign Sponsor Participation
COMPAREDOWNLOADNote: Only active and concluded projects are considered in this graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Government Support to PPP Projects
Government Support for Energy Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Payment Mechanism for PPP Projects
Payment Mechanisms for Energy Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Summary of Projects across PPPs in the Energy Sector
Sector Number Of Projects Total Cost(T million) Total Cost($ million) Local level 1 22,684 48 Republican level 1 2,320 5 Grand total 2 25,004 53 Note: Currency equivalent is as of 1 September 2022.
Source: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022).
Typical Risk Allocation for PPP Projects
A typical risk allocation for energy projects is unavailable.
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation 1 6 11 PPP projects that received export credit agency/international financing institution support UA UA UA Typical debt:equity ratio 70/30 70/30 80/20 Time for financial close < 1 year < 6 months < 6 months Typical concession period UA 15 20 Typical financial internal rate of return UA UA UA UA = unavailable.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Energy
Tariffs
The tariffs for power generation are capped by the order of the MOE which splits all generators into 49 groups. The caps are revised annually as a measure to curb the growth of electricity tariffs due to considerations of social policy. The tariffs for distribution, transmission, and dispatch are regulated according to the Law of the Republic of Kazakhstan “On Natural Monopolies” (or NML). The renewable energy tariffs from auctions held in 2020 are presented in the table.
Renewable Source Tariff (T/kWh) Tariff ($/kWh) Wind 21.53 0.046 Solar PV 16.96 0.036 Hydropower plant 15.2 0.032 kWh = kilowatt-hour, PV = photovoltaic.
Source: Financial Settlement Center database (accessed September 2022).
Energy
Challenges
Some of the key challenges impacting the energy sector are as follows:
- The absence of a coherent sector development strategy with a clear energy transition plan that is consistent with the country's Nationally Determined Contributions hinders investment planning.
- The prevalent policy of curbing the growth of electricity tariffs for the benefit of the broader social considerations makes investments in the power sector risky and unattractive.
- The absence of ancillary service markets (e.g., balancing, capacity, peak power) creates additional curtailment risks.
- The absence of carbon pricing creates distortions in the true cost of power for renewable energy and limits financing possibilities.
- The legal requirement to transfer the project assets to the state at the end of the PPP contract makes this procurement mode unattractive to the private sector, limiting the potential upside.
-
Water and Wastewater
-
Access to Water
97.3 %
-
Access to Sanitation
98 %
-
Number of PPPs Reaching FC
----
-
Value of PPPs Reaching FC
----
-
Number of PPPs with Foreign Sponsors
----
-
Number of PPPs with Govt. Support
----
FC = financial closure, Govt. = government.
Note: Access to water and sanitation as percentage of total population with access to improved water resources and sanitation facilities.
Sources: Asian Development Bank. Cumulative Lending, Grant, and Technical Assistance Commitments. https://data.adb.org/dataset/cumulative-lending-grant-and-technical-assistance-commitments; Asian Development Bank. 2017. Country Partnership Strategy, 2017–2021. https://www.adb.org/sites/default/files/institutional-document/357421/cps-kaz-2017-2021.pdf; Unicase Law LLP.
Water infrastructure is relatively well-developed in Kazakhstan, including dams, levees, pump stations, reservoirs, irrigation distribution, and drainage system. According to the 2019 OECD report, Kazakhstan’s population is less vulnerable to unsafe drinking water than the neighboring Central Asian countries. However, climate change is already affecting the reliability of water supply in some regions of Kazakhstan.14
- 14OECD. 2019. Sustainable Infrastructure for Low-Carbon Development in Central Asia and the Caucasus: Hotspot Analysis and Needs Assessment. Green Finance and Investment. Paris: OECD Publishing. https://doi.org/10.1787/d1aa6ae9-en.
Water and Wastewater
Contracting Agencies
The republican state institution "Committee for construction and housing and communal services" under MIID (the Construction Committee) is the main competent body responsible for the policy and supervision of water utilities in Kazakhstan, along with its other functions relating to control of architectural, urban planning, and construction activities; housing relations; utilities; and solid waste management.15
The contracting authority will depend on the asset/utility ownership allocation:
- The Construction Committee on behalf of MIID, in the case of republic-level projects.
- Local akimats, in the case of regional-level projects (i.e., water and wastewater utilities are on the balance of regional authorities).16
- Joint stock company, KazCenter ZhKH, is the national operator for implementing various reforms in housing and utilities. It is 100%-owned by the Construction Committee and provides project preparation and approval services to MIID for projects financed out of the Nurly Zhol and Nurly Zher programs.
- 15Government of Kazakhstan, Ministry of Industry and Infrastructural Development, Construction and Housing-Communal Services Affairs Committee. https://www.gov.kz/memleket/entities/kds/about?lang=en.
- 16Municipal water utilities can become parties to various contracts, but those contracts will be structured in accordance with the Civil Code, not the Concessions Law or the PPP Law.
Water and Wastewater
Sector Laws and Regulations
Parameter Availability Can the private sector be given water abstraction rights? Are there regulations in place on raw water extraction? Are there regulations in place on the release of treated effluents? - Yes
- No
Sources: Asian Development Bank. Cumulative Lending, Grant, and Technical Assistance Commitments. https://data.adb.org/dataset/cumulative-lending-grant-and-technical-assistancecommitments; Asian Development Bank. 2017. Country Partnership Strategy, 2017–2021. https://www.adb.org/sites/default/files/institutional-document/357421/cps-kaz-2017-2021.pdf; Unicase Law LLP.
The water and wastewater sector is regulated by two key legislative acts:
- Water Code of the Republic of Kazakhstan No. 481 dated 9 July 2003.
- Environmental Code of the Republic of Kazakhstan No. 400-VI 3PK dated 2 January 2021.
Foreign Investment Restrictions
COMPAREDOWNLOADParameter 2019 2020 2021 Maximum allowed foreign ownership of equity in greenfield projects Bulk water supply and treatment
100% 100% 100% Water distribution
100% 100% 100% Wastewater treatment
100% 100% 100% Wastewater collection
100% 100% 100% Source: Water Code of Kazakhstan; Environmental Code of Kazakhstan; Unicase Law LLP.
Standard Contracts
COMPAREDOWNLOADType of Contract Availability PPP/concession agreement Performance-based operation and maintenance contract Engineering, procurement, and construction contract - No
LEARN MOREWater and Wastewater
Sector Laws and Regulations
There are no standard contract forms for PPPs in the water and wastewater sector yet.
Source: Unicase Law LLP
Water and Wastewater
Sector Master Plan
The Nurly Zher state program is the main document that describes the further development of water and wastewater sector. It aims to improve the quality of living standards in Kazakhstan.
The program covers district heating, water and wastewater, and housing and construction sectors. For the water and wastewater sector, along with the modernization and expansion of water supply infrastructure, the program envisages the construction and reconstruction of 53 wastewater treatment plants in 49 settlements.17 Overall, it pursues the following key performance indicators (KPIs):
- Provide 100% access to centralized water supply in urban areas by 2025.
- Provide 97.7% access to centralized water supply in rural areas by 2025.
- Provide 2.3% access to decentralized water supply in rural areas by 2025.
- Provide 100% access to the centralized wastewater services in urban areas by 2023.
- Decrease the share of obsolete water and wastewater networks to 47%.
Some of the challenges in the water and wastewater sector mentioned in the program include lack of skilled workforce, high accident rates, low automation, unclear division of responsibilities for water pollution, and weak enforcement of environmental standards for discharge leading to inability to manage environmental risks.
- 17While the government has designated JSC KazCenter ZhKH as the program operator, the decisions are yet to be made on financing sources, procurement mode, or possible role of water utilities as borrowers or as public parties to the PPP arrangements.
Projects under Preparation or Procurement
Water and Wastewater Public-Private Partnerships under Preparation and Procurement
COMPAREDOWNLOADLEARN MOREWater and Wastewater
Sector Master Plan
Four out of five PPP projects in water and wastewater are located in Almaty region (three projects are for the reconstruction of water network, and one project is for the reconstruction of wastewater treatment facilities in Kapchagay City, Almaty region). The remaining one is the reconstruction of wastewater treatment facilities in Kokshetau City (Akmola region). All projects are promoted by local akimats and are on a short-term basis (for construction). There is no project at the republican level.
Note: "-" means there are no projects in the sector, or data are unavailable.
Source: Kazakhstan Public-Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Water and Wastewater
Features of Past PPP Projects
Procurement of PPP Projects
Water and Wastewater Public-Private Partnerships procured through various modes
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects Reaching Financial Close
Water and Wastewater Public-Private Partnerships reaching Financial Close
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects with Foreign Sponsor Participation
Water and Wastewater Public-Private Partnerships with Foreign Sponsor Participation
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Government Support to PPP Projects
Government Support for Water and Wastewater Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Summary of Projects across PPP in the Water and Wastewater Sector
Sector Number of Projects Total Cost(T million) Total Cost($ million) Local level - - - Republican level - - - Grand total - - - – = no project.
Sources: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Typical Risk Allocation for PPP Projects
A typical risk allocation for water and wastewater sector projects is unavailable.
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation - - - PPP projects that received export credit agency/international financing institution support - - - Typical debt:equity ratio UA UA UA Time for financial close UA UA UA Typical concession period UA UA UA Typical financial internal rate of return UA UA UA - = no project, UA = unavailable.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Water and Wastewater
Tariffs
All water and wastewater services are subject to natural monopoly regulation, therefore CREM sets their tariffs. There are more than 60 water utilities in Kazakhstan, each with their own tariff structures approved at least annually, published on their websites. The water and wastewater tariffs are generally set separately. There are some utilities where the wastewater tariffs are further split into collection and treatment.
The current tariff-setting practices do not allow the water utilities to recover their investment costs and do not encourage water saving.
Water and Wastewater
Challenges
The key challenges in the water and wastewater sector are the following:
- Due to climate change, Kazakhstan is expected to experience more severe droughts and greater deficits of fresh water in the future.
- The current tariff-setting practices do not allow the water utilities to recover their investment costs and do not encourage water saving.
- The weak financial standing of water utilities undermines their ability to become parties to design–build–operate agreements with private parties or to borrow directly from banks.
- Lack of skilled workforce results in inefficient water management, high accident rates, and low automation.
- Unclear division of responsibilities for water pollution and weak enforcement of environmental standards for discharge lead to inability to manage environmental risks.
-
ICT
-
Telephone Subscribers
18.291
-
Cellular Phone Subscribers
142.28
-
Cellular Network Coverage
86.6 %
-
Internet Subscribers
13.44
-
Internet Bandwidth per User
51.49 kbps
-
Number of PPPs Reaching FC
----
-
Value of PPPs Reaching FC
----
-
Number of PPPs with Foreign Sponsors
----
-
Number of PPPs with Govt. Support
----
FC = financial closure, ICT = information and communication technology, kbps = kilobits per second.
Note: Telephone, cellular phone, and internet subscribers per 100 inhabitants. Cellular network coverage as percentage of population covered.
Sources: World Bank. Telephone Subscribers 2020. https://data.worldbank.org/indicator/IT.MLT.MAIN?locations=KZ; The Global Economy. Mobile Phone Subscribers. https://www.theglobaleconomy.com/rankings/Mobile_phone_subscribers_per_100_people/; The Global Economy. Mobile Network Coverage. https://www.theglobaleconomy.com/rankings/Mobile_network_coverage/; The Global Economy. Internet Subscribers. https://www.theglobaleconomy.com/rankings/Internet_subscribers_per_100_people/; The Global Economy. Internet Bandwidth. https://www.theglobaleconomy.com/rankings/Internet_bandwidth/.
ICT is Kazakhstan’s most-developed infrastructure segment. The World Economic Forum ranks Kazakhstan 44th among 141 countries in ICT adoption.18 All of the country’s administrative regions have access to 3G and 4G networks.
- 18Klaus Schwab. 2019. The Global Competitiveness Report. World Economic Forum. Geneva. http://www3.weforum.org/docs/WEF_ TheGlobalCompetitivenessReport2019.pdf.
ICT
Contracting Agencies
The Telecommunications Committee of the Ministry of Digital Development, Innovations, and Aerospace Industry is one of the key entities in the ICT sector and a contracting agency. It is responsible for the implementation of public policy in the ICT sector, including communication and "informatization," and e-government services. The committee also oversees compliance with the legislation of the Republic of Kazakhstan within the sector and exerts public control.19
There are additional joint stock companies under the ministry which work toward achieving various mandates of the ministry:
- Zerde National Infocommunication Holding JSC (Zerde) is the largest ICT company in Kazakhstan, a national operator and e-government service integrator, and the main driver of digitalization. Zerde is responsible for implementing government digitalization programs and development initiatives in the sector.
- State Corporation "Government for Citizens" JSC is a digital integrator and single provider of digital public services to the citizens of Kazakhstan.
- JSC Kazakhtelecom is the largest telecommunication company in Kazakhstan and has the status of a national telecommunication operator, with 51% of ownership belonging to Samruk-Kazyna.20 JSC Kazakhtelecom controls 93% of fixed-line telephony and broadband internet,21 including the National Information Superhighway, which is a transport fiber-optic ring that connects large cities of Kazakhstan with digital streams with high data transmission speed.22
- 19Government of Kazakhstan, Ministry of Digital Development, Innovations and Aerospace Industry, Telecommunications Committee. https://www.gov.kz/memleket/entities/telecom/about?lang=en.
- 20Kazakhtelecom. The Main Shareholders Structure. https://telecom.kz/en/pages/11893/172452 (accessed February 2022).
- 21OECD. 2017. Reforming Kazakhstan: Progress, Challenges and Opportunities. Paris.
- 22Kazakhtelecom. Facts About the Company. https://telecom.kz/en/about/list.
ICT
Sector Laws and Regulations
The Law of the Republic of Kazakhstan No. 418 dated 24 November 2015 "On Informatization" defines and regulates public relations in the ICT sector between state bodies, individuals, and legal entities during the creation, development, and operation of informatization objects. The law also defines the measures for state support in the development of the ICT industry.
Foreign Investment Restrictions
COMPAREDOWNLOADParameter 2019 2020 2021 Maximum allowed foreign ownership of equity in greenfield projects Fixed line infrastructure
49% 49% 49% Fixed line services
49% 49% 49% Wireless/mobile infrastructure
100% 100% 100% Wireless/mobile services
100% 100% 100% LEARN MOREICT
Sector Laws and Regulations
There are no legal restrictions to foreign involvement in the ICT sector.
Source: ADB. 2019. Public-Private Partnership Monitor. Second Edition. Manila. https://www.adb.org/sites/default/files/publication/509426/ppp-monitor-second-edition.pdf; Unicase Law LLP.
Standard Contracts
COMPAREDOWNLOADType of contract Availability What standardized contracts are available and used in the market? PPP/concession agreement
Performance-based operation and maintenance contract
Engineering, procurement, and construction contract
License agreement
- No
LEARN MOREICT
Sector Laws and Regulations
There are no sector-specific templates available for the ICT sector.
Source: Unicase Law LLP.
ICT
Sector Master Plan
The state program, Digital Kazakhstan, sets the objectives to accelerate the pace of economic development and improve the quality of life through promoting digital technologies in the medium term. It also aims to shift the country's economy to a fundamentally new development trajectory, ensuring the creation of a digital economy from a long-term perspective.
Digital Kazakhstan is being implemented through a mix of republican and local government budgets, private sector initiatives, and PPP programs. Some of the projects proposed to be developed and implemented using a PPP mechanism are as follows:
- Electronic labor exchange (consolidation of IP systems "Labor market," Enbek.kz portal, private employment agencies, and online Internet sites).
- Automated system for collecting data on air passengers.
- Industrial Automation and Digitalization Institute (to be created based on existing infrastructure).
- e-Residence project. 23
- 23Digital Kazakhstan. 2020. Plan of Activities for Implementation of the Program. Astana. https://digitalkz.kz/wp-content/uploads/2020/03/%D0%9F%D0%9C%20%D0%A6%D0%9A%20eng%20(2).pdf.
Projects under Preparation or Procurement
ICT Public-Private Partnerships under Preparation and Procurement
The list of PPP projects in the ICT sector includes the project on the Provision of Broadband Access to Rural Settlements with fiber-optic communication lines technology (signed in 2018).
COMPAREDOWNLOADICT = information and communication technology
- = means there are no projects in the sector, or data are unavailable.
Source: Kazakhstan PublicPrivate Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
ICT
Features of Past PPP Projects
Procurement of PPP Projects
ICT Public-Private Partnerships procured through various modes
COMPAREDOWNLOADICT = information and communication technology
Note: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
PPP Projects Reaching Financial Close
ICT Public-Private Partnerships reaching Financial Close
COMPAREDOWNLOADICT = information and communication technology
Note: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects with Foreign Sponsor Participation
ICT Public-Private Partnerships with Foreign Sponsor Participation
COMPAREDOWNLOADICT = information and communication technology
Note: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Government Support to PPP Projects
Government Support for ICT Public-Private Partnerships
COMPAREDOWNLOADICT = information and communication technology
Note: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Payment Mechanism for PPP Projects
Payment Mechanisms for ICT Public-Private Partnerships
COMPAREDOWNLOADICT = information and communication technology
Note: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022); Unicase Law LLP.
Summary of Projects across PPP in the ICT Sector
Note: Currency equivalent is as of 1 September 2022.
Source: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022).
Typical Risk Allocation for PPP Projects
A typical risk allocation for ICT sector projects is unavailable.
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation - - - PPP projects that received export credit agency/international financing institution support - - - Typical debt:equity ratio UA UA UA Time for financial close UA UA UA Typical concession period UA UA UA Typical financial internal rate of return UA UA UA - = no project, UA = unavailable.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
ICT
Challenges
The increasing state ownership in the ICT sector and the market power of the state-owned operator, combined with the absence of an independent regulatory authority, may have adverse consequences for the overall competitiveness of the economy, thus deterring private investors.
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Social Infrastructure
Contracting Agencies
Health-Care Services
Health-care facilities in Kazakhstan are largely owned and operated by the public sector, represented by the Ministry of Healthcare (MOH). PPP projects in health care may be contracted through the following:
- MOH for republican projects.
- Local akimats for regional projects.
- Turar Healthcare is the national medical operator under MOH responsible for providing medical services in facility management PPPs. It may also be a part of the contractual structure. According to legislation, Turar may also provide advisory support for health-care projects.
Education Services
Education facilities in Kazakhstan are largely owned and operated by the public sector, represented by the Ministry of Education (MinEdu), and local akimats. PPP projects in education may be contracted through the following:
- MinEdu for republican projects.
- Local akimats for regional projects.
- JSC Financial Center under MinEdu is responsible for setting subsidy financing in education PPPs (per capita expenditures). It is also the designated national operator of the programmatic PPP process, which entails developing a series of PPPs based on standard requirements, contracts, and procedures, for student dormitories and schools.
- Talap, a nonprofit state-owned company, also has the national operator status and promotes the development of technical and vocational education and training.
Public Housing
The republican state institution "Committee for Construction and Housing and Communal Services of the MIID" is the key agency that performs control and implementation functions in the field of architectural, urban planning, and construction activities; housing relations; utilities; and municipal waste management within its competence, in accordance with the legislation of the Republic of Kazakhstan.
PPP projects in public housing may be contracted through the following:
- MIID for republican projects.
- Local akimats for regional projects.
Social Infrastructure
Sector Laws and Regulations
Health-Care Sector Regulations
The key legal act that provides overall regulation of the health-care sector is the Healthcare Code (No. 360-VI ZRK dated 7 July 2020). Detailed regulation is provided via decrees and orders issued by MOH.
Education Sector Regulations
The key legal act that provides overall regulation of the education sector is the Law "On education" No. 318-III ZRK dated 27 July 2007. Detailed regulation is provided via decrees and orders of the Minister of Education and Science.
Public Housing Regulations
The key legal act that provides overall regulation of the public housing sector is the Law "On housing relations" No. 94 ZRK dated 16 April 1997.
Foreign Investment Restrictions
COMPAREDOWNLOADParameter 2019 2020 2021 Maximum allowed foreign ownership of equity in greenfield projects Construction of healthcare facilitiesa
100% 100% 100% Services, including hospital management, specialist hospital/clinic, mental hospital, dental clinic, and laboratory and medical check-up services
100% 100% 100% Private maternity hospital, clinic general medical services/public hospital/ public medical clinic, residential health services, and basic healthcare services facility
100%(public hospitals and medical clinics - via facility management model) 100%(public hospitals and medical clinics - via facility management model) 100%(public hospitals and medical clinics - via facility management model) Construction of education facilities
100% 100% 100% Non formal education services (vocational training, computer education, and language education)
100% 100% 100% Formal education services
100% 100% 100% Government buildings
100% 100% 100% Prisons and correction centres
100% 100% 100% Public housing
100% 100% 100% - aExcept radiotherapy departments which cannot be privately owned.
Standard Contracts
Social Infrastructure
Sector Master Plan
Healthcare
Health-care infrastructure faces a growing gap and requires increased private investments in the sector. The national project "Good-quality and affordable healthcare for each citizen-Healthy nation" provides insights on key KPIs for the health-care system in the Republic of Kazakhstan:25
- Increase in private investment in health care from T121.5 billion (about $259 million) in 2020 to T783.3 billion (about $1,668 million) in 2025.
- Creation of 13,000 new permanent jobs.
- Increase in the share of domestic pharmaceutical products from 17% in 2020 to 50% in 2025.
- Increase in life expectancy of citizens from 71.37 years in 2020 to 75 years in 2025.
- Increase in the level of satisfaction of the population with the quality of medical services from 53.3% in 2020 to 80% in 2025.
Hospital PPP is a part of the Ministry of Healthcare national project indicated above. It envisages a pipeline of 20 greenfield hospital PPPs (most of them are via unsolicited proposals) across the country, including four teaching hospitals.26
- 25https://adilet.zan.kz/rus/docs/P2100000725#z10 (in Russian).
- 26The program was reduced to five teaching hospitals in December 2021.
Education
The national project "Good Quality Education-Educated Nation" provides insights on the key performance indicators for the education system in the Republic of Kazakhstan:27
- Investments in fixed assets in the education sector in 2025—174.8% (% of real growth compared to 2019).
- Private funding in the education sector—T4,830 billion (about $10.2 billion).
- Number of jobs created through the construction (extension)/opening of educational facilities by 2025—103,905.
- Coverage of children ages 3–6 years with preschool education and training—100%.
- Ratio of the salary of a teacher to the average monthly salary in the economy—102.9%.
- 27https://adilet.zan.kz/rus/docs/P2100000726#z5 (in Russian).
Public Housing
Under the Nurly Zher program, the key program objectives for public housing revolve around providing housing facilities and renovation of housing stock. Key performance indicators for the public housing are the following:
- Increase in the annual volume of housing commissioning from all sources of financing by 2025—20.7 million square meters.
- Availability of housing by 2025—26 square meters per resident.
- Reduction in the share of objects, condominiums requiring major repairs by 2025—18.1%.
Projects under Preparation or Procurement
Social Infrastructure Public-Private Partnerships under Preparation and Procurement
COMPAREDOWNLOADSource: Kazakhstan Public-Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Social Infrastructure
Features of Past PPP Projects
Procurement of PPP Projects
Social Infrastructure Public-Private Partnerships procured through various modes
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects Reaching Financial Close
Social Infrastructure Public-Private Partnerships reaching Financial Close
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects with Foreign Sponsor Participation
Social Infrastructure Public-Private Partnerships with Foreign Sponsor Participation
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Government Support to PPP Projects
Government Support for Social Infrastructure Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Payment Mechanism for PPP Projects
Payment Mechanisms for Social Infrastructure Public-Private Partnerships
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Summary of Projects across PPPs in the Social Infrastructure Sector
Sector Number Of Projects Total Cost(T million) Total Cost($ million) Health Care Local level 198 74,858 159 Republican level 0 0 0 Total – Health Care 198 74,858 159 Education Local level 611 92,627 197 Republican level 2 1,400 3 Total – Education 613 94,027 200 Public Housing and Other Social Local level 84 51,708 110 Republican level 0 0 0 Total – Public Housing and Other Social 84 51,708 110 Total Local level 893 219,193 466 Republican level 2 1,400 3 Grand Total 895 220,593 469 Note: Currency equivalent is as of 1 September 2022.
Sources: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Typical Risk Allocation for PPP Projects
COMPAREDOWNLOADRisk Type Private Public Shared Political Project site/land Design Construction Demand Operation/maintenance Financing/refinancing Changes in interest rates after financial close Inflation during operation Currency (within 5% corridor, outside - public partner) Discriminatory changes in legislation and taxes Natural force majeure Early termination (grantor's fault) Early termination (concessionaire's fault) - = Yes
Source: Concession Project: Construction and Operation of 300-Bed University Hospital in Almaty. Presentation at Almaty Hospital PPP Roadshow. 2020
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation NA NA NA PPP projects that received export credit agency/international financing institution support NA NA NA Typical debt:equity ratio NA Time for financial closure NA Typical concession period NA Typical financial internal rate of return NA NA = not applicable
Social Infrastructure
Tariffs
- In the health-care sector, tariffs for guaranteed volume of free medical services financed out of the state budget are regulated by Order of the Acting Minister of Healthcare of the Republic of Kazakhstan No. KR DCM-170/2020 dated 30 October 2020.
- In the education sector, the education tariffs (regulatory per capita expenditures) are regulated by Order of the Minister of Education and Science of the Republic of Kazakhstan No. 596 dated 27 November 2017.
- The tariffs for public housing tend to be determined by the market and are not regulated.
Social Infrastructure
Challenges
Health Care
- The tariff-setting practices for medical services financed by the state do not provide assurances of cost recovery for the private sector, especially for capital expenditures.
- The procedures for involving private sector players in the provision of medical services guaranteed by the state are cumbersome and bureaucratic.
- There is no clarity about the sources of compensation against specific costs—between the state budget, the state insurance system, or out-of-pocket payments on the revenues side, and between the private facility operator and the state medical services provider on the costs side.
Education
- The current legislation does not allow for a PPP facility management model in education.
- Lack of teaching personnel is the sector's greatest risk. Without modernizing the teachers' professional development, and without raising the educators' status within the society, in general, and increasing their remuneration, the future of the education sector will remain in jeopardy.
- The coronavirus disease (COVID-19) pandemic had a negative impact on equal access to education. Meanwhile, the quality of education suffers from the lack of teachers' ability to adapt to distance learning and online lessons. This is partly caused by low adoption of ICT competencies in training programs.
Public Housing
- Relatively high housing construction costs make affordability a serious challenge for this sector. According to the Nurly Zher program, it takes about 11 years for an average household to save for a 54-square-meter apartment.
- Current legislation does not allow for a PPP facility management model in the housing sector.
- Black-market rentals are relatively high (60% to 70% according to the Nurly Zher program).
- Green housing—encompassing energy efficiency, universal accessibility, and inclusive design—will be needed, requiring regulations, building codes and certification, as well as new skills and capacity in the private sector.
Other Sectors
Contracting Agencies
The Committee on Environmental Regulation and Control under the Ministry of Ecology, Geology and Natural Resources is the competitive body in the sector responsible for the following tasks:
- Monitoring of the quality of the environment, environmental safety, preservation of natural resources, and achievement of a favorable level of environmentally sustainable development of society
- Environmental legislation and regulation, state environmental control within its competence, and organization and conduct of state environmental expertise in accordance with the requirements of the current legislation
- Coordination, regulation of emissions, and implementation of the issuance of environmental permits; implementation of state environmental control.
PPP projects in the municipal solid waste sector may be contracted through the following:
- Ministry of Ecology, Geology and Natural Resources for republican projects.
- Local akimats for regional projects.
- Certain projects may be structured via Operator Zhasyl Damu (100% owned by the government), which is responsible for managing a unified system of integrated waste management of products/goods.
Other Sectors
Sector Laws and Regulations
The Environmental Code is the key legislative document of the municipal solid waste sector.28 The code guides and governs all stages of waste handling. The Environmental Code introduces the concepts of waste collection, transportation, recovery, disposal, and auxiliary operations in waste management. The code also defines the licensing requirements for entities involved in waste management.
- 28Environmental Code of the Republic of Kazakhstan No. 400-VI 3PK, dated 2 January 2021.
Foreign Investment Restrictions
The ownership allowance in the municipal solid waste sector is indicated as follows:
Parameter 2019 2020 2021 Maximum allowed foreign ownership of equity in greenfield projects 100% 100% 100% Source: ADB. 2019. Public-Private Partnership Monitor. Second Edition. Manila. https://www.adb.org/sites/default/files/publication/509426/ppp-monitor-second-edition.pdf; Unicase Law LLP.
Standard Contracts
Parameter Availability What standardized contracts are available and used in the market? - PPP/concession agreement - Power purchase agreement - Long-term waste supply contract - Capacity take-or-pay contract - Transmission and use of system agreement - Performance-based operations and maintenance contract - Engineering, procurement, and construction contract - = No
LEARN MOREOther Sectors
Sector Laws and Regulations
There are no standard contracts specific to municipal solid waste sector yet.
Source: Unicase Law LLP.
Other Sectors
Sector Master Plan
The key document that regulates the development of the solid waste management sector is the Concept for Transition of the Republic of Kazakhstan to "Green Economy," approved by Presidential Decree of the Republic of Kazakhstan No. 577 dated 30 May 2013. The concept aims to increase resource efficiency, upgrade existing infrastructure, and address climate change and other environmental issues.
Implementation of the Green Economy Concept has three stages:
- 2013–2020: During the first stage, the main priority of the state was to optimize the resource use and increase the efficiency of environment protection activities, and to establish green infrastructure.
- 2020–2030: The second stage proposes transformation of the national economy, based on the green infrastructure built during the first stage with focus on rational water use, and broad implementation of renewable energy and energy-efficient technologies.
- 2030–2050: Transition of the national economy, according to the principles of Third Industrial Revolution, requires the use of natural resources on the condition of renewability and sustainability. For the municipal solid waste sector in particular, the concept proposes development of a brand new integrated waste management system.
Projects under Preparation or Procurement
Public–Private Partnership Municipal Solid Waste Projects under Preparation and Procurement
COMPAREDOWNLOADNote: "-" means there are no projects in the sector, or data are unavailable.
Source: Kazakhstan Public-Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Other Sectors
Features of Past PPP Projects
Procurement of PPP Projects
Modes of Procurement for Public–Private Partnership Municipal Solid Waste Projects
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database. Award method information on only project (up to 2020) is not available in the database and is therefore excluded from the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects Reaching Financial Close
Public–Private Partnership Municipal Solid Waste Projects Reaching Financial Closure
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
PPP Projects with Foreign Sponsor Participation
Public–Private Partnership Municipal Solid Waste Projects with Foreign Sponsor Participation
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Government Support to PPP Projects
Government Support to Public–Private Partnership Municipal Solid Waste Projects
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Payment Mechanism for PPP Projects
Payment Mechanisms for Public–Private Partnership Municipal Solid Waste Projects
COMPAREDOWNLOADNote: Only active and concluded projects are considered in the above graph. "-" means there are no projects in the sector, and/or data are unavailable or not applicable according to the database.
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Summary of Projects across PPPs in the Municipal Solid Waste Sector
Sector Number Of Projects Total Cost(T million) Total Cost($ million) Local level 3 6,118 13 Republican level 0 0 0 Grand total 3 6,118 13 Note: Currency equivalent is as of 1 September 2022.
Sources: Kazakhstan Public–Private Partnership Center. PPP Project Database. http://www.kzppp.kz/projects (accessed 18 October 2022); Unicase Law LLP.
Typical Risk Allocation for PPP Projects
Information on typical risk allocation arrangements in municipal solid waste PPP contracts is unavailable.
Financing Details
Parameter 1990–2019 1990–2020 1990–2021 PPP projects with foreign lending participation NA NA NA PPP projects that received export credit agency/international financing institution support NA NA NA Typical debt:equity ratio NA Time for financial closure NA Typical concession period 25 years Typical financial internal rate of return NA NA = not applicable
Source: World Bank. Infrastructure Finance, PPPs and Guarantees. Country Snapshots. Kazakhstan. https://ppi.worldbank.org/en/snapshots/country/kazakhstan (accessed 18 October 2022).
Other Sectors
Tariffs
Name Unit Price, T(including VAT) Price, $(including VAT) Collection, transportation, utilization, recycling, and disposal of solid waste – population One inhabitant per month 553.04 1.17 Collection, transportation, utilization, recycling, and disposal of solid waste – population – commercial entities 1 cubic meter 2,288.46 4.87 Source: https://adilet.zan.kz/rus/docs/V17R0001405 (in Russian).
Tariffs in the municipal solid waste sector are set by the akimats for each regional center and city of national status in accordance with the Ecological Code and the Order of the Minister of Ecology, Geology and Natural Resources No. 377 dated 14 September 2021. Tariffs calculated are finally approved by local representative bodies (maslikhats).
Other Sectors
Challenges
The main challenges in the solid waste management sector are as follows:
- Slow reforms in the solid waste management sector and low waste separation and recycling culture result in 80%–90% of waste being landfilled.
- Low tariffs for collection and disposal make investments and operations of modern garbage trucks and landfills commercially unattractive.
- Low demand for recycled products against high logistics costs affects profit margins.
Social Infrastructure
Govt. Expenditure on Education (% of GDP)
Education Spending (% of govt. spending)
Total Health Expenditure
Health Spending per Capita
Hospital Beds (per 10,000 population)
Govt. Health Expenditure (% of total govt. expenditure)
Number of PPPs Reaching FC
Value of PPPs Reaching FC
Number of PPPs with Foreign Sponsors
Number of PPPs with Govt. Support
FC = financial closure, GDP = gross domestic product, Govt. = government.
Asian Development Bank. Cumulative Lending, Grants, and Technical Assistance Commitments. https://data.adb.org/dataset/cumulative-lending-grant-and-technical-assistance-commitments (accessed 18 October 2022); World Health Organization. Global Health Expenditure Database. https://apps.who.int/nha/database/country_profile/Index/en (accessed 18 October 2022);c World Bank Databank. Kazakhstan. https://data.worldbank.org/country/kazakhstan (accessed 18 October 2022).
Social infrastructure includes health care, education, public housing, and government building infrastructure. Where possible, the following analysis will be split into these subsectors. Since there is no data on social infrastructure projects available in the World Bank database, the analysis on the number of projects will be based on the PPP Center’s database (accessed in October 2022).