Kazakhstan: Government Focuses on Energy Infrastructure Development

Cassa Depositi e Prestiti expands its presence in Central Asia: 200 million euros allocated to the Development Bank of Kazakhstan under the SACE guarantee

Odile Renaud-Basso con Kassym-Jomart Tokayev

Forced to announce a cut in natural gas exports to Germany, the Kazakh government is launching a ten-year plan to technically modernize and build new infrastructure, from gas pipelines to power plants, designed to boost energy production in this former Soviet Central Asian republic.

For two days (October 30-31), Odile Renaud-Basso, president of the European Bank for Reconstruction and Development (EBRD), discussed with Astana leaders billions of dollars of investment in Kazakhstan’s critical infrastructure.

After a lengthy conversation with Kazakh Prime Minister Olzhas Bektenov, Renaud-Basso was received by Kazakh President Kassym-Jomart Tokayev (pictured) and attended a meeting with the Executive Board of the Asian Development Bank (ADB). On the sidelines of these meetings, several agreements were signed on sustainable infrastructure investment projects. In this context, Renaud-Basso emphasized the importance of renewable energy for Kazakhstan’s economy and called for stronger public-private partnerships to address critical infrastructure challenges.

Kazakhstan’s economic development program envisages almost doubling of the national gross domestic product by 2029. According to Prime Minister Bektenov, the government of Kazakhstan “forecasts annual growth of the national economy at an average of 5.4 percent.”

“If this result is achieved,” Bektenov said, “Kazakhstan’s GDP will increase from the current $321 billion to $498 billion in 2029. However, the prime minister said the government’s targets are “even more ambitious, envisioning annual GDP growth of between 5.6% and 6.9%.” Implementing this program will require important work to diversify the economy, increase its sophistication, launch high value-added industries, and reduce commodity dependence.

To increase the availability of electricity in Kazakhstan, a nuclear power plant will be built: a government commission has been announced for the NPP, the construction of which was approved in a referendum on October 6 last year. According to Energy Minister Almasadam Satkaliyev, “the commission will begin a series of negotiations with the various companies participating in the tender.” Preliminary consultations have already begun with meetings and visits to Russia, China, and South Korea. Russia wants to participate in the implementation of the project, and this will be one of the central themes of Russian President Vladimir Putin’s next visit to Astana, scheduled, barring unforeseen circumstances, for November 27.

Italy is also actively involved in the economic development of Kazakhstan. In order to broaden the range of financial resources available for sustainable development projects in Kazakhstan and to increase commercial exchange between companies in Italy and Kazakhstan, Cassa Depositi e Prestiti (CDP) has provided the Development Bank of Kazakhstan (DBK) with a maximum loan of 200 million euros guaranteed by SACE’s Push Strategy.

SACE is an Italian insurance and financial group directly controlled by the Ministry of Economy and Finance, specialized in supporting businesses and the national economic structure with a wide range of tools and solutions to support competitiveness in Italy and worldwide.

As CDP wrote in a press release, “this first CDP operation in the country will allow Kazakhstan’s state-owned bank to finance strategic projects in critical sectors such as energy and infrastructure.” In particular, initiatives in the areas of renewable energy, energy efficiency, health, water management, and transportation will be supported. The funding also aims to strengthen economic relations between Italy and Kazakhstan, creating opportunities for cooperation between Italian companies and companies of this largest republic in Central Asia, with the organization of networking events and sectoral forums to increase commercial exchange between the two countries in strategic industries.

In January 2024, the CBD and SACE have already laid the groundwork for a more intensive cooperation between Italy and Kazakhstan on the occasion of the Italian-Kazakh round table organized by the Ministry of Foreign Affairs and International Cooperation for the visit of the President Kassym-Jomart Tokayev to Italy.