Hampton by Hilton Astana Triumphal Arch hotel
Mr President, dear colleagues and members of the Council, friends, ladies and gentlemen
Our subject today is ‘Future Energy’, usually understood as power from the sun, the wind and hydro, and energy-efficient economies in general.
As I am sure I do not have to tell this audience, the need to make the switch to cleaner forms of energy is urgent.
The effects of climate change can already be felt here in Kazakhstan and further afield.
But promoting Future Energy is not just a matter of mitigating the threat to our environment, reducing energy waste and diversifying economies overly dependent on oil, gas and coal.
Ours is a positive vision of the need to change.
Put simply, preserving and improving the environment are central features of any modern, well-functioning market economy.
They are the key goals of the transition process that the EBRD was created to foster in countries such as Kazakhstan at the beginning of the 1990s.
A world powered by Future Energy will be one transformed – very much for the better.
I know that Kazakhstan aspires to be a leader in the field of Future Energy.
I will return to the subject of Kazakhstan’s contribution to this cause – and what we at the EBRD have done to help – in a few moments.
But let me just say a few words about the EBRD and its activity in this area across our regions as a whole.
We are the largest investor in renewable energy across the 37 countries where we invest.
Our total green energy investment, including energy efficiency, amounts to US$1.9 billion in Kazakhstan, US$2.2 billion in Central Asia and almost US$26 billion across all the EBRD regions.
As with the rest of our activity, and in line with our founding principles, much of this work has been in the private sector.
Already this year we have witnessed a sharp increase in green economy financing, putting us well on track to meet the ambitious objectives we announced in the run up to the 2015 Paris Climate Agreement.
Ahead of that accord, we unveiled our new Green Economy Transition approach, under which we aim to dedicate 40 per cent of our annual investments to climate finance by the year 2020
Hitherto, that figure had averaged around 25 per cent.
But in the first five months of this year, we invested more than a billion US dollars in green finance, compared with just under US$ 550 million in the same period last year.
To give you only one example of the high regard in which the EBRD is now held in the green energy sector, an accord we signed with the Green Climate Fund this spring make us the largest single recipient of their resources.
Future Energy in Kazakhstan
Kazakhstan is very much part of this narrative of Future Energy.
Sometimes it feels as though, together, we are writing a new chapter of this story almost every day.
For example, on the very first day of the Astana Expo we agreed basic terms for a major new wind farm in Shar, in east Kazakhstan.
This is part of our comprehensive €200 million renewable energy financing framework for your country.
We salute Kazakhstan for the very active role it is playing as part of the global effort to fulfil the terms of COP21 climate agreements.
And for its commitment to reduce its greenhouse gas emissions to a level 15 percent below those of 1990 by the year 2030.
We too are committed to this cause.
For Kazakhstan, as for many other countries, the transition to a greener economy is about more than just climate change.
It is a matter of urgency in other ways too.
Our economists, together with Kazakhstan’s government, are researching the fiscal impact of such a transition both globally and here in Kazakhstan.
We all recognise that the continuing over-reliance on oil for export revenue presents a significant challenge to the Kazakh economy.
You yourself, Mr President, said back in 2012 that the hydrocarbon era is coming to an end.
With renewable energy prices plummeting, that end is coming ever closer.
According to some forecasts, by 2030 80 per cent of the energy consumed in the world’s major economies will come from renewable sources.
Whatever the accuracy of such predictions, those economies will be buying less oil and less coal.
Kazakhstan has to adapt to these trends.
The good news is that Kazakhstan is actively preparing for such a future.
In our view, at the EBRD, Kazakhstan is the region’s leader in green economy legislation and renewables investment, a status it has earned with active support and financing from the EBRD.
Here are only a few of the milestones which we have worked on together:
Back in 2008, with our help, you adopted a Sustainable Energy Action Plan.
Your first Renewable Energy law was passed in 2009.
In 2013 Kazakhstan launched the first nationwide cap-and-trade Emission Trading Scheme in the whole of Asia (not just Central Asia).
In 2013 you also adopted a new Renewable Energy Law, introducing a feed-in tariff mechanism.
It allowed national and international investors into the renewable energy sector.
And it enabled us to invest in your first large-scale solar plant, Burnoye Solar-1.
I signed that deal here two years ago. We have just doubled our stake in it in partnership with the Clean Technology Fund.
I am very pleased to announce that yesterday we signed an agreement with the Minister of Energy Bozumbayev which will allow us to attract many more foreign and local investors in renewable energy projects. We have already allocated US$ 200 million for a total of 300 MW [megawatts] of power for this.
Also, I am pleased that since last year’s Plenary Session which focused on the Astana International Financial Centre (AIFC), much progress has been made by Governor Kelimbetov and his team in developing the Centre.
We look forward to working closely with the Centre on the development of the Green Financial System.
Renewable energy needs to be supplemented from other sources.
Natural gas, which is much cleaner than coal, provides, we believe, the best and most stable supply of power on windless nights.
And switching from coal to gas is the single most effective way of cutting carbon emissions.
We are helping you with that too. Only last year we supported gas storage and distribution by KazTransGas.
Committing to Future Energy
Ladies and gentlemen, the flow of investments into green energy in Kazakhstan is welcome.
But that flow needs to grow into a flood.
We are helping to make that happen by actively working with the authorities on policy and legislative reform.
And yet investments on their own, whatever their volume, will not be enough in themselves to solve all the problems the country faces.
Kazakhstan remains the largest emitter of greenhouse gases in Central Asia and its economy has one of the highest CO2 intensities in the world.
But we need to give credit where it is due.
Kazakhstan has enacted significant legislative improvements covering energy efficiency and renewable energy.
Its ambitious Green Economy Concept focuses on decarbonisation in carbon-intensive sectors.
With continued commitment to reform from your government, even more progress can be made.
Last year Kazakhstan was the EBRD’s second largest country by investment volume with just over US$1.1 billion invested.
I believe the day is not far off when it will occupy a similarly exalted position for volume of investment in Future Energy
Our pipeline of projects is strong.
For example, we intend to begin work soon on a new solar park in one of the world’s most remote, but celebrated, regions.
We hope to build Baikonur Solar right in the middle of Kyzylorda region, not far from the Cosmodrome which sent the first satellite, the first man and the first woman into space.
I believe it will be one of many, many such projects, all of them, together, making a decisive contribution to Kazakhstan’s shift to ‘Future Energy’.
And lastly, because of the work of this council, led by the President, we can do a lot more.
I would like to pay tribute here to the FIC and how it is helping to set the strategic agenda and improve the investment climate.
With projects like Shalkiya Zinc that EBRD signed on the third day of Expo, and the Kyzyl project that was signed this morning with the President of Polymetal, an FIC member, we can see that investments is coming to the country.