DBK to Finance Modernisation of Power Distribution Networks under the National Project Modernisation of the Energy and Utilities Sector

JSC Development Bank of Kazakhstan (a subsidiary of the Baiterek Holding, hereinafter referred to as DBK, or the Bank) has become a financial partner in the investment project of Karagandy Zharyk LLP under the National Project Modernisation of the Energy and Utilities Sector (the National Project).

Funds will be directed towards implementing a large-scale programme to modernise the power grid infrastructure of the Karaganda Region – one of the key areas of the country’s energy system.

The attraction of financing marks an important step in enhancing the reliability and sustainability of the region’s power grid complex. The funds will be used to renew equipment, reduce the number of outages, and improve the quality of electricity supply for both households and businesses.

The National Project aimed at implementing the government’s priority objectives in the housing and utilities sector, was approved by the Government of the Republic of Kazakhstan in December last year. Its participants include natural monopoly entities implementing investment initiatives to renew the country’s engineering and utility infrastructure.

Upon completion of the National Project, it is expected that accident rates will decrease by 20%, while the overall wear of energy assets across the country will be reduced to an average of 40%. The financial partnership between the Development Bank of Kazakhstan and Karagandy Zharyk LLP reflects this strategic course.

As part of the investment project, Karagandy Zharyk will implement a series of infrastructure initiatives: reconstruction of the 110 kV overhead transmission lines Karagaily State District Power Plant No 2 (circuits 1 and 2), modernisation of the 110 kV line Astakhovka – Shokay, and the renewal of substations 35/10 kV Zhosaly and 110/6 kV RTI. Construction completion and commissioning are planned by 1 July 2029.

Within the project framework, 58.2 km of overhead networks will be reconstructed and power transformers replaced, which overall will help reduce the wear and failure rates of the networks.

DBK financing is provided in the form of a non-revolving credit line totalling 16.7 billion tenge for a period of 10 years. The Bank will finance 90% of the project’s total cost, which will be allocated to construction and installation works as well as the procurement and installation of equipment.

“The Development Bank of Kazakhstan provides direct financing to natural monopoly entities within the framework of the National Project, which can be seen as a strategic step towards the renewal and sustainable development of the country’s utility infrastructure. Earlier this year, the Bank also approved a Support Programme for Energy and Utilities Modernisation Projects, aimed at enhancing the accessibility and efficiency of investment initiatives in the natural monopoly sector,” – noted DBK Chairman of the Management Board Marat Yelibayev.

The Karagandy Zharyk projects are part of the long-term strategy of the Kazakhstan Utility Systems group of companies aimed at renewing the energy infrastructure across Kazakhstan's regions. The group systematically invests in the modernization of electrical and heating networks, implements energy-efficient technologies, and enhances service quality.

“The Development Bank of Kazakhstan has become the financial partner of an important regional investment project. Supporting such initiatives is a contribution to the sustainable development of the energy sector and to enhancing the reliability of infrastructure, which directly affects people’s quality of life. We are investing in the development of the energy infrastructure – the foundation of comfort for millions of the country’s residents,” – emphasised Didar Akhamdin, General Director of Karagandy Zharyk LLP.

It should be recalled that the Development Bank of Kazakhstan offers favourable financing terms for natural monopoly entities participating in the National Project: loan amounts starting from 3 billion tenge, loan periods of up to 20 years, and interest rates set on market terms – with 10% covered through tariffs, and the remainder subject to subsidy.

Currently, DBK is reviewing 7 projects under the National Project with a total value of 141.8 billion tenge. The proposed loan amount for these projects is 126.2 billion tenge. It is noted that the implementation of these initiatives will significantly reduce the level of infrastructure wear across the country.

For reference:

Development Bank of Kazakhstan JSC (a subsidiary of Baiterek National Management Holding JSC), a national development institution specialized in financing and development of large-scale infrastructure and industrial facilities in Kazakhstan.

Kazakhstan Utility Systems LLP is one of the largest companies in the country’s energy market and is part of the Ordabasy Group project holding. The enterprises of the KKS Group form a full production chain — from the generation of electricity and heat to their delivery to the end consumer. In terms of installed capacity, Kazakhstan Utility Systems LLP ranks among the four largest energy companies in Kazakhstan.

Karagandy Zharyk LLP is a power supply company that is part of the Kazakhstan Utility Systems (KKS) group of companies. It carries out the transmission and distribution of electricity in the Karaganda Region. The company ensures a reliable electricity supply for the region and implements projects aimed at modernising and developing the power grid infrastructure, thereby improving energy efficiency and the quality of services for both residents and businesses.