Major Kazakh power project complete

By Mike McDonough

The successful completion of the EBRD's Kazakh power project brings reliable, efficient efficiency to northern Kazakhstan.

A new power link connecting coal-rich northern Kazakhstan to the energy-hungry south of the country was officially opened last week, bringing a successful conclusion to a major EBRD investment aimed at improving the reliability and efficiency of electricity transmission in the Central Asian nation.

Kazakh President Nursultan Nazarbayev attended a ceremony in Ekibastuz in northern Kazakhstan marking the completion of the 1,100-kilometre-long overhead transmission line. Astana-based EBRD Senior Banker Ulf Hindstrom was also present at the event. The new link will double the volume of electricity carried to central and southern parts of the country, including the densely-populated Almaty area.

Concrete results from EBRD investment

“This is a great example of the EBRD bringing concrete achievements on the ground,” says Aida Sitdikova, the EBRD operation leader for the two projects needed for the construction of the new line. “It took two projects to do it because of the sheer scale but now it’s there, plus there were no major cost overruns or delays.”

The building of the power link was partly financed by the EBRD, which syndicated some of its US$148 million investment to commercial banks. The World Bank and the Development Bank of Kazakhstan also invested in the two projects, which were worth a combined total of US$ 350 million.

“The improvement in the power supply should be noticeable this year,” says Ms Sitdikova. “Before the link was built, the Almaty region was on the brink of experiencing a major power shortage, which could have been disastrous during the bitterly cold winter season.”

The new transmission line, which is owned and run by the Kazakhstan Electricity Grid Operating Company (Kegoc), will remove some of the need for expensive energy imports from neighbouring Uzbekistan and the Kyrgyz Republic. In order to recover its investment, Kegoc will increase transmission tariffs. But, as Astana-based EBRD Associate Banker Maira Karassaeva points out, these only account for some 10 per cent of the end-user cost. As a result, the tariff increases are not expected to place a big burden on consumers.

The construction of the North-South Kazakhstan transmission line is one of several EBRD projects involving Kegoc that have been signed over the last decade, one of which is still ongoing. By the time they are completed, power will be distributed throughout the country more reliably and with far fewer losses due to outdated equipment.

Clean and efficient coal

“Coal is still the main option for power generation in Kazakhstan, but the Bank is trying to get the Kazakhs to focus on developing their use of coal in as efficient and clean a way as possible using modern technology,” says EBRD Director of Power and Energy Nandita Parshad.

“The Kegoc projects have an important energy efficiency contribution as they help to reduce losses,” Ms Parshad adds. “Plus our involvement with the company had a major influence on the government when it came to signing Kazakhstan’s Sustainable Energy Action Plan.”