‘Baiterek’ Presents Financing Mechanisms Under the National Utilities Modernization Project

On April 23, Aliya Murzagalieva, Managing Director of ‘Baiterek’ National Managing Holding JSC, took part in a national meeting on the modernization of water supply and sanitation systems in populated areas. The event was held as part of the Kazakhstan Machinery Fair exhibition. During the meeting, she presented the financing mechanisms and participation conditions for utility enterprises within the framework of the National Project "Modernization of the Energy and Utilities Sectors."

The total volume of the national project is 13 trillion tenge, providing for a seven-year financing plan and a five-year implementation period. Annually, between 300 and 800 billion tenge will be allocated to support utility infrastructure through government loans, as well as lending via second-tier banks and the Development Bank of Kazakhstan, which is part of the ‘Baiterek’ Holding.

The project provides exclusively for repayable financing. Private natural monopoly entities are offered direct lending, while public entities will receive financing through local executive bodies (akimats). Interest payments on loans will be covered by utility tariffs, and in the event of a shortfall, subsidies from the state budget are envisaged.

"At present, the Mazhilis of the Parliament is reviewing amendments that will allow authorized government bodies to independently subsidize the loan costs of natural monopoly entities for borrowings raised through government securities. These amendments are expected to be adopted in the summer of this year, with funds to be disbursed starting in 2026, subject to budgetary procedures," stated Aliya Murzagalieva.

She emphasized that the main criteria for project selection will be the efficiency and profitability of initiatives aimed at increasing digitalization, improving financial performance, and enhancing the operational efficiency of enterprises. Additional selection criteria include the financing volume, the number of consumers served, network automation levels, loss reduction measures, payment collection efficiency, and the current financial condition of the organization.

"Financing will be provided through internal capital market sources without the use of non-repayable funds, except for subsidies. Considering the rising base rate, negotiations are underway to raise borrowed funds at the inflation rate. At the same time, the objective is to minimize the volume of subsidies and prioritize the use of short-term loans with maturities of 5 to 7 years," the Managing Director added.

Special attention will be given to supporting domestic manufacturers. The total investment of 13 trillion tenge is expected to be repaid over 20 years, mainly through payments from consumers — both individuals and businesses. Banks require potential participants to contribute at least 10% of their own funds and provide collateral, which the financial operator aims to limit to 30–40%.

"For the first time, such substantial resources are being allocated to the utilities sector. Our task over the next five years is to bring utility companies out of the 'red zone,' improve infrastructure safety, and ensure uninterrupted service delivery. Through joint efforts between the state and the private sector, we can build a sustainable, reliable, and environmentally safe life-support system," concluded Aliya Murzagalieva.

The National Project "Modernization of the Energy and Utilities Sectors" was approved by the Government of the Republic of Kazakhstan in December 2024 and is scheduled for implementation from 2025 to 2029. The goal of the project is to enhance the reliability of the country's utilities and energy systems by reducing infrastructure wear and accident rates by 20–40%.