Implementation of the President's Address for 2024: how large-scale modernization of the fuel and energy complex is being carried out

On the instructions of the Head of State Kassym-Jomart Tokayev, work continues on a systematic modernization of the fuel and energy complex in our country. A reliable, self-sufficient and modern energy system will become a solid foundation for the country's sustainable economic growth and improving the well-being of every citizen.

Electric power industry: the main task is to ensure energy independence

The main task in the electric power industry is to ensure the country's energy independence and fully meet the growing needs of the economy.

The President's mandate sets a goal of launching new power plants with a capacity of at least 14 gigawatts over the next five years. This work is being carried out in several areas: modernization of existing power plants, construction of new power generation facilities, and development of hydropower and renewable energy sources.

1.3 gigawatts of new electricity capacity is set to come online in 2023 and 2024.

The process of introducing another 621.5 megawatts is underway in 2025, and 2,648.5 megawatts are planned for 2026.

To achieve these goals, active work is underway to build new strategic facilities. A project to build a power plant based on a combined cycle plant with a capacity of up to 1,000 MW is being implemented in the Turkestan region. Construction and installation work is underway to build a new CHP with a capacity of 240 MW in Kyzylorda.

Reducing infrastructure deterioration: 9 thermal power plants moved from the high-risk "red" zone to the "yellow" zone

In his Address to the Nation, Head of State Kassym-Jomart Tokayev drew attention to the need to address pressing issues related to infrastructure.

The Government is particularly concerned about reducing the wear and tear of CHP plants. A large-scale repair campaign is underway: in 2025, it is planned to overhaul 10 power units, 63 boilers, and 39 turbines.

Currently, work is underway on 5 power units, 30 boilers, and 19 turbines. Repairs have been completed on 4 power units, 15 boilers, and 9 turbines.

The measures being taken are already yielding tangible results: as a result of the modernization and renewal of equipment, the average wear and tear of CHP plants in the country has decreased from 64% to 61%.

According to the results of the last heating season, 9 CHPs moved from the "red" zone with a high level of disaster to the "yellow" zone, and 3 CHPs moved from the yellow zone to the green zone. Currently, there are 10 CHPs in the "red" zone, 17 in the yellow zone, and 10 in the green zone.

The CHP modernization program will continue systematically to reduce annual wear and tear and move facilities from hazardous areas to safe operating areas.

As part of the implementation of the President's instructions, in December 2024, the Government approved the National Project "Modernization of the Energy and Utilities Sectors" (hereinafter referred to as the national project), within the framework of which long-term concessional financing of a large-scale campaign to repair the housing and communal services infrastructure began.

The national project includes the development of electricity generation capacities, improvement of the natural monopolies sector, support for domestic producers and socially vulnerable groups, as well as the introduction of digital technologies to automate processes.

More than 200 infrastructure companies are involved in this work.

The main indicator is to reduce the level of depreciation of facilities to 40%.

According to the national project, approximately 6.8 trillion tenge will be invested in the modernization of 86 thousand kilometers of engineering networks. Including: 1.6 thousand kilometers of heating networks; 77.6 thousand kilometers of electricity networks; 4.7 thousand kilometers of water supply networks; 2.6 thousand kilometers of sewerage networks.

This will reduce the number of accidents by 27%.

It is planned to attract investments in the amount of 6.2 trillion tenge in the construction of new sources of electricity generation and modernization of existing plants. These funds will allow reducing the wear and tear of plants by 15% and introducing an additional 7.3 GW of production capacity.

Today, there are 55 electricity generating organizations operating in the country, 19 of which are more than 65% worn out. The volume of electricity generation is 113 billion kWh, and the volume of consumption is 115 billion kWh.

Thus, according to preliminary estimates, it is necessary to attract approximately 13 trillion tenge of investment in the energy and utilities sector to implement the National Project over the next five years.

It should be noted that the bulk of the funds will be raised from private financial institutions (second-tier banks - STBs, international financial organizations - IFIs, Industrial Development Fund - IDF).

The following general financing mechanisms are envisaged: direct financing (DBs, STBs, IFIs, DFIs); co-financing; bonds; budget loans; capital of private monopolies; leasing financing.

An individual financing model is developed for each enterprise.

In order to increase the investment attractiveness of the national project, changes have been made to the tariff methodology. This will ensure a return on invested funds and allow for the stable maintenance of the required level of financial flows.

In addition, the possibility of subsidizing interest rates on loans is being considered. This, in turn, will help reduce the impact on tariffs.

In order to alleviate the tariff burden for socially vulnerable groups, targeted social assistance is provided to cover utility bills.

At the same time, 48 natural monopoly entities (96 projects) with a high level of deterioration, confirmed documents and ready for financing were considered and identified. It is planned to repair and replace 1,347 kilometers of utility lines and upgrade 3,047 units of equipment for a total amount of 144.5 billion tenge.

It is planned to maximize the use of domestic production within the framework of the modernization and construction of energy and utility infrastructure.

As a result of the implementation of the national project, Kazakhstani enterprises producing housing and communal services products are expected to operate at full capacity. In addition, 27 new production facilities will be built with investments of about 190 billion tenge, creating about 3.5 thousand jobs.

The volume of output of domestic enterprises used is approximately 4.4 trillion tenge.

This approach not only strengthens competitiveness in the domestic market, but also reduces dependence on imports and strengthens the position of "local" enterprises in the overall market.

The implementation of the national project involves measures to support socially vulnerable groups of the population, principles that unify all regulated purchases using a single platform, the introduction of new digital technologies as part of the automation of the modernization processes of the system operator's information and communication infrastructure facilities, etc.