Renewable energy in Kazakhstan

The Republic of Kazakhstan has enormous renewable energy potential, particularly from wind and small hydropower plants. The country has the potential to generate 10 times as much power as it currently needsfrom wind energy alone. But renewable energy accounts for just 0.6 percent of all power installations. Of that, 95 percent comes from small hydropower projects. The main barriers to investment in renewable energy are relatively high financing costs and an absence of uniform feed-in tariffs for electricity from renewable sources. The amount and duration of renewable energy feed-in tariffs are separately evaluated for each project, based on feasibility studies and project-specific generation costs. Power from wind, solar, biomass and water up to 35 MW, plus geothermal sources, are eligible for the tariff and transmission companies are required to purchase the energy of renewable energy producers. An amendmentthat introduces and clarifies technology-specific tariffs is now being prepared. It is expected to be adoptedby Parliament by the end of 2014. In addition, the World Bank’s Ease of Doing Business indicator shows the country to be relatively investor-friendly, ranking it in 10th position for investor protection.

Kazakhstan is a party to the UN Framework Convention on Climate Change (1995) and ratified the in 2009. Kazakhstan has committed to reduce greenhouse gas emissions. Having more renewable energy in the energy balance of Kazakhstan is one of the most effective mechanisms to reduce harmful effects of the energy sector and to diversify the national power generation capacity.

To help Kazakhstan meet its goals for renewable energy generation, the European Bank for Reconstruction and Development (EBRD) is launching the Kazakhstan Renewable Energy Financing Facility (KazREFF). The KazREFF aims to provide development support and debt finance to renewable energy projects which meet required commercial, technical and environmental criteria. Renewable energy technologies supported will include solar, wind, small hydropower, geothermal, biomass, and biogas. The Facility comprises an amount of up to €50 million for financing projects together with up to €20 million of concessional finance from Clean Technology Fund(CTF), and the technical assistance funded by the Japanese government through the Japan-EBRD Cooperation Fund (JECF).

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