Kazakhstan shifts strategy on nuclear power plant: no government funds needed

The government plans to raise funds from creditors, with the debt to be repaid from the nuclear power plant’s revenues / Collage by Kursiv.media, photo editor: Dastan Shanai

Kazakhstan will not allocate public funds to construct a nuclear power plant (NPP), confirmed Nurlan Baibazarov, minister of national economy, at a recent government briefing.

«The construction of the NPP will be the largest investment project in our country. We are in the early stages and are considering a priority project financing scheme where the state’s role is limited to creating favorable economic conditions for the project’s successful payback,» Baibazarov stated.

Project financing involves securing a loan that will be repaid through the revenue generated by the project itself. In the case of the NPP, funds will be provided by lenders, with repayments coming from the plant’s future revenues rather than the government budget.

Baibazarov also mentioned that the government is optimistic that a consortium of international financial institutions will fund the construction. He highlighted that nuclear power projects are implemented throughout the world and investors are eager to participate in such projects.

«Not a single institution will finance the entire project alone. It will be a joint effort. Our responsibility is to ensure the project’s economic viability through appropriate tariffs and guaranteed electricity consumption,» Baibazarov explained.

When asked about the potential increase in project costs during construction, Baibazarov commented that the agreement with contractors will clearly outline the obligations and rights of both parties, including those related to raising project costs.

«Practically speaking, we aim to shift the responsibility for any project cost increases onto the contractor. When contractors calculate project costs, they must factor in all associated risks upfront. We hope that this approach will help minimize the risks,» Baibazarov explained.

Previously, the Ministry of Energy estimated that constructing an NPP with a capacity of 2.4 gigawatts could cost Kazakhstan between $10 billion and $15 billion.