CHP projects face delays in Kazakhstan as Russia struggles with financing

Russia is experiencing difficulties with financing the delivery of equipment for three combined heat and power plants (CHP) it has committed to build in Kazakhstan. According to the Interfax-Kazakhstan news agency, citing Deputy Prime Minister Roman Sklyar, if the Russian side fails to settle the issue, Astana will have no other choice but to look for another investor.

«All three CHP projects are underway. There are issues related to the subsidized interest rate for the equipment, so we are negotiating to resolve this matter. … Of course, another [investor] may be appointed if Russia doesn’t allocate funds. There are no other potential investors yet. I believe everything will be clear within June,» Sklyar told reporters on the sidelines of a meeting with Italian Prime Minister Giorgia Meloni in Astana.

The prime minister explained that the primary issue relates to securing concessional export financing for equipment procurement.

«The work will commence as soon as the issue is resolved,» Sklyar elaborated, noting that Kazakhstani CHPs traditionally run with Russian equipment.

So far, Kazakhstan is working on the design and early preparations for construction.

Under arrangements between the two countries, Russia is expected to provide Kazakhstan with concessional financing for the construction of three CHPs in Kokshetau, Semey and Ust-Kamenogorsk and also to carry out the construction itself. The first plant is scheduled to begin operations in Kokshetau in 2028. The preliminary cost of the three projects is estimated at 1.25 trillion tenge (approximately $2.4 billion).

At the same time, Kazakhstan will retain full ownership of these projects. Russia’s Inter RAO is involved exclusively as the general contractor, while the project owner is the Kazakh state-owned Samruk-Kazyna, Kazakhstan’s Deputy Energy Minister Sungat Yessimkhanov underscored.