EBRD welcomes big step for renewables in Kazakhstan – new feed-in tariff law

By Svitlana  Pyrkalo

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Kazakhstan has taken a major step forward in the development of a renewable energy market, with the support of the European Bank for Reconstruction and Development (EBRD).

Kazakhstan has adopted a new feed-in tariff law – “On Supporting the Use of Renewable Energy Sources” – that will provide support to renewable energy producers. The feed in tariff – which is the rate at which the national grid buys electricity from renewable sources – will enable renewables to compete with energy from fossil fuel-powered generators.

The EBRD has worked with the Ministry of Industry and New Technologies and the Ministry of Environmental Protection to help develop various aspects of the new legislation, beginning with the model for determining the feed-in tariff. Expert work was funded by the EBRD’s Shareholder Special Fund, the Clean Technology Fund and the UK government.

The EBRD’s Managing Director for Energy Efficiency and Climate Change, Josué Tanaka, said: “Feed-in tariff legislation is a significant step for the development of renewable energy in carbon-intensive Kazakhstan. The adoption of this new law reflects a close and appreciated collaboration between Kazakh authorities and the EBRD. The next big challenge is building up the infrastructure for renewable energy, on which projects will have to rely. The country needs a lot of investment – from cranes used to install wind turbines, to a modern grid. This is where private investors will have to play a role, and we stand ready to support bankable projects in the sector.”

Janet Heckman, the EBRD’s Director for Kazakhstan, said: “Leading the way in the Central Asian region, Kazakhstan has proclaimed a goal to work towards a green economy, and the EBRD considers this new legislation a milestone along that road. We have already financed biogas installations in Aktau and Shymkent, as well as the rehabilitation of the Shardara hydro-power plant. The new legislation will enable us to start the dialogue with companies willing to look into commercial renewable power generation.”

To date, the EBRD has invested €12 billion in projects under its Sustainable Energy Initiative across its region of operations, which promotes energy efficiency and renewable energy. In Kazakhstan, under the EBRD’s Sustainable Energy Action Plan for the country, the Bank has already invested almost €400 million, and continues to look for opportunities to finance energy efficiency improvements and renewable energy projects, for which it also attracts funding from outside sources, namely the Clean Technology Fund and the Global Environment Facility.

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