EBRD to Invest 100 Mln Euros in Kazakhstan’s Economy
The European Bank for Reconstruction and Development (EBRD) is considering financing renewable energy projects – wind farms in particular – in Kazakhstan in 2012, a bank official told reporters.
“We are considering two or three projects for an amount of up to 100 million euros (US$133 million) and are still considering whether this will be debt or equity,” said Riccardo Puliti, EBRD managing director and head of energy and natural resources.
Kazakhstan, which has tripled oil production in the last decade on its way to becoming Central Asia’s largest economy, is seeking investment to develop wind, solar and hydroelectric projects to reduce a power deficit in parts of the country’s regions.
High speed wind locations are in the southeast mountain passes leading to China, in the Alytau mountain regions in the center of the republic, and in the southwest on the Caspian seaboard.
Renewable energy projects are relatively rare in Kazakhstan, which sits on 3 percent of the world’s recoverable oil reserves. Coal-fired power plants currently accounted for 75 percent of the electricity generated in Kazakhstan, while gas accounted for a further 12 percent and hydroelectric power 9 percent, according to the Industry Ministry data.
But Kazakhstan’s vast steppe has potential for generating wind power, particularly in southern regions of the country that depend largely on electricity imported from nearby Uzbekistan or the distant coal seams of northern Kazakhstan. It also has a plentiful supply of hydro, solar, biomass, and geothermal energy.
Industry Minister Aset Isekeshev said Kazakhstan aimed by 2014 to be generating 1 billion kilowatt hours of electricity, or slightly over 1 percent of total consumption, from renewable sources. This share should rise to 3 percent by 2020, he said.
Kazakhstan passed primary legislation in 2009 to stimulate investment in renewable energy sources and reduce the environmental impact of power generation.
Benefits of this law include priority land allocation for renewable energy sites and obligatory purchase by transmission companies of electricity generated from renewable sources.
The EBRD’s Puliti said the implementation of new wind farm projects would require the approval of secondary legislation that would define feed-in tariffs, the fee paid by the power distributor or transmission company to the wind farm.
This is likely to be higher than the average power tariff, in order to act as a stimulant for investment in wind power. “In the next six months, it should be approved,” he said.
Kazakhstan could have wind power generating capacity of 1,000 megawatts by 2014, said Andreas Thomas, senior vice-president for business development for Vestas Central Europe, a unit of the Danish wind turbine manufacturer Vestas Wind Systems.
“The pure wind potential in Kazakhstan is much, much higher because they have an enormous land mass,” Thomas told.
Since the beginning of its operations in Kazakhstan, the EBRD has invested over €2.8 billion in over 130 projects in various sectors of the Kazakh economy, mobilizing additional investments in excess of about €6 billion.