Finance

ADB, Kazakhstan to partner on hydropower development program

ADB, Kazakhstan to partner on hydropower development program

The Asian Development Bank (ADB) has signed a transaction advisory services agreement with the Government of Kazakhstan for its Hydropower Development Program.

ADB’s mandate is to work with the government to conduct pre-feasibility studies, assist in preparing auction documents and a template power purchasing agreement, and attract competitive offers to crowd in investors. ADB will help the government prepare and auction hydropower projects with private sector participation for a potential cumulative capacity of around 600 MW across the Alaqol, Balkash and Irtysh/Zaysan basins in the southeast of the country.

The agreement was signed by Kazakhstan’s Minister of Energy Almassadam Satkaliyev and ADB’s Head of the Office of Markets Development and Public–Private Partnerships Cleo Kawawaki.

“ADB’s support for Kazakhstan in the development of renewable energy sources, including through increased private sector participation, is a priority within our ongoing country partnership strategy for 2023–2027,” said Kawawaki. “ADB’s focus is to assist the country’s efforts to address the impacts of climate change, promote decarbonization, and facilitate sustainable economic growth. This will help Kazakhstan achieve its goal of increasing its renewable energy capacity, reduce carbon emissions, and enhance the country’s energy security.”

Kazakhstan’s Hydropower Development Program aims to attract the private sector to design, finance, construct, operate and maintain multiple hydropower projects. ADB will also facilitate knowledge transfers to further develop local expertise in promoting private sector participation to support Kazakhstan’s energy sector transformation.

The International Trade Administration reported in 2022 that 84% of Kazakhstan’s electricity is generated from fossil fuels, with hydropower accounting for 12% and less than 2% generation from solar and wind installations as of 2019. Kazakhstan has abundant hydro resources, which are mainly concentrated in the eastern and southern parts of the country. As of September 2022, 15 large hydropower stations (>50 MW) with a total capacity of 2.25 GW accounted for up to 13% of the country’s total generating capacity.

Kazakhstan joined ADB in 1994. ADB has committed about $7 billion in loans, grants and technical assistance to the government and private sector. Regional cooperation and integration initiatives under the Central Asia Regional Economic Cooperation (CAREC) program are an integral part of ADB operations in Kazakhstan, which is chairing the program this year.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members — 49 from the region.