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04:18Is the European Bank for Reconstruction and Development a key partner in the Kajet Just Energy Transition Platform?
04:25We're now joined by Yerlan Ramazanov, EBRD Deputy Head of Kazakhstan and Regional Head of Energy.
04:34Mr. Ramazanov, welcome.
04:36Thank you. Thank you for having me today here.
04:38How investment, Raji, would you say Kazakhstan's renewable energy market is today?
04:44And what role can Kajet play in increasing its growth potential?
04:50It is almost there.
04:51But at the same time, Kajet, the Kazakhstan Just Energy Transition Platform, it is an initiative of the government of
04:58Kazakhstan.
04:58I think that any investment project is successful if it has the resource.
05:04And here I think that Kazakhstan is blessed by the natural resources needed for the renewable projects.
05:09It also has this goal to support development of enabling, business enabling, investment enabling, regulatory framework for further development of
05:20renewables and integration of the battery storage capacity expertise, which is needed.
05:25And here I think that the just part is so important.
05:28And all of this will come to the question of financing.
05:31How have renewable energy auctions and longer-term power purchase agreements changed the investment climate for renewable projects in Kazakhstan?
05:41The system of auctions and the long-term PPAs, power purchase agreements, it actually gave a clear understanding of the
05:49rule of the game to the investors.
05:51It set a risk allocation between the government and the developers, effectively and eventually allowing for the banks to provide
06:01the financing for this type of projects.
06:04And for the first project EBRD financed in Kazakhstan, it dates back to 2015.
06:11And over these 11 years of experience, I would say that the agreements are being honored and the off-taker
06:18is paying in full and on time.
06:20I think that also the cross-sectoral impact is also why two simple facts.
06:27The first one is the tariff.
06:28Since 2018, when the auction system was introduced, comparing to the tariff in 25, they decreased two times in Kazakh
06:38-Tingay.
06:38And the second one is that Kazakh companies, domestic companies, they established the experience building and operating renewable energy projects.
06:50Therefore, bringing this expertise in the country.
06:53What are the biggest remaining barriers to attracting private and international investments into Kazakhstan's renewable energy sector?
07:00First, I think that there are technical obstacles.
07:03And this is the grid and the stability of the grid, particularly the balancing of the grid.
07:08Second one is the regulatory framework, which still needs improvement.
07:13For example, as part of also Cajiat, we are aiming to work with the authorities to bring into operation the
07:21regulatory framework for the battery storage projects, for the pump storage projects.
07:25And the third one, I think that long-term investors, they need stable rules and they need a vision.
07:34And from that perspective, Cajiat, with a vision to add 10 gigawatts of new renewable capacity by 2035, gives this
07:42vision to the investors, saying that it is available and that these projects are to be implemented in Kazakhstan.
07:48Mr. Ramazanov, thanks so much for your time today.
07:50Thank you so much.
07:54That's it for now.
07:55See you in the next episode of EastWest Connect.
