Overview of Renewable Energy Legislation in Kazakhstan

I. INTRODUCTION

As at August 2026, Kazakhstan has 172 renewable energy plants with a capacity of more than 3,8GW, made up of 71 wind power plants, 54 solar power stations, 44 hydroelectric power plants (‘HPPs’) and 3 biofuel power plants. The actual electricity generation by renewable energy facilities amounted to 8.6 billion kWh, which is 19.4% above the planned figures.

As of June 2026, Kazakhstan’s current energy mix is as follows:

a.    62.1% – coal;
b.    23.4% – natural gas;
c.    7.5% – hydropower (excluding small hydroelectric plants);
d.    7% – renewable energy sources (‘RES’).

The potential for foreign investment in the Kazakh power sector is huge. For instance, to cover the needs of the local economy and the population alone, the commissioning of at least 26GW of new power generation will be required by 2035. According to the Ministry of Energy of the Republic of Kazakhstan (the ‘RoK’), the proposed structure for the new energy capacity required by 2035 will be as follows:

a.    more than 5.1GW of gas generation;
b.    more than 2.1GW from HPPs;
c.    4.37GW of coal generation;
d.    more than 8.4GW from RES; and
e.    more than 2.4GW of nuclear generation.

Moreover, waste-to-energy projects under Kazakh laws are de facto equated to renewable energy projects. Generally, approximately 5 million tons of solid household waste are generated annually in Kazakhstan. Of this, 25% is for recycling, whereas the rest – over 74% of waste – is currently buried in landfills. 

The Government of Kazakhstan initially planned to commission waste‑to‑energy facilities with a total installed capacity of 100.8 MW no later than July 2026. However, as of mid‑2026, these plans have been revised. The most active project development is currently taking place in Almaty, Astana, and Shymkent, where investment agreements with Chinese companies have been signed, with construction expected to commence in 2026.

The goals, forms and directions of support for the use of RES as well as the regulation of mechanisms for supporting energy waste utilisation and the use of secondary energy resources[1] are defined in Law of 4 July 2009 No. 165-IV on Support for the Use of Renewable Energy Sources (the ‘Law on RES’).

Under Kazakh law, ‘renewable energy sources’ are defined as continuously renewable energy sources that derive from naturally occurring processes, including the following types:

a.    solar radiation energy;
b.    wind energy;
c.    hydrodynamic water energy;
d.    geothermal energy from the heat of soil, surface water bodies, and groundwater bodies; and
e.    anthropogenic sources of primary energy resources such as consumption waste, biomass, biogas and other fuels from consumer waste used for the production of electrical and (or) thermal energy.

In accordance with the Environmental Code dated 2 January 2021 No. 400-VI, the term ‘energy waste utilisation’ (or waste-to-energy) is defined as a process of thermal treatment of waste aimed at reducing its volume and generating energy, including using it as a secondary and (or) energy resource, with the exception of obtaining biogas and other fuels from organic waste. Processing of any municipal solid waste is, generally, allowed. However, Kazakh law provides an exhaustive list of waste that cannot be subject to energy waste utilisation (e.g., liquid waste, lithium, lead-acid batteries and waste containing persistent organic pollutants).

As of 2026, according to a presentation by the system operator JSC KEGOC[2] delivered at the Kazenergy association meeting in February 2026, there is a problem of accelerated commissioning of renewable energy capacity, which poses the following risks to Kazakhstan’s power system:

a.    the threat of systematic separation from the power systems of the Russian Federation and Central Asian countries due to unbalanced operation and grid congestion;
b.    forced payments by the Renewable Energy Support Financial Settlement Center (the single off-taker, ‘FSC’) for curtailment of renewable generation under intergovernmental agreements and auctions;
c.    a reduction in annual capacity utilization factors of coal fired and gas fired power plants;
d.    reduced output from future nuclear power plants due to renewable energy deployment;
e.    higher end user tariffs resulting from the integration of renewables, battery energy storage systems (‘BESS’), and the need to expand grid infrastructure.

Moreover, KEGOC is already refusing grid access to certain renewable energy projects, citing a shortage of dispatchable capacity in the region.

Thus, while in 2022 the main obstacles were identified as deteriorating infrastructure and a lack of flexible capacity, by 2026 the problem has evolved: the accelerated rollout of renewables without adequate balancing capacity has created a direct threat to the reliability of the Unified Power System, forcing the system operator to propose a temporary moratorium on new projects.

According to the Ministry of Energy, the solution to the problem will be the deployment of BESS, the legal framework for which is being further developed in the draft law submitted to the Majilis in February 2026 (as described in Section II).

II. THE YEAR IN REVIEW

At the end of 2025, Kazakhstan’s renewable energy sector continued its steady growth. The share of electricity generated from renewable sources reached 7% of the country’s total energy balance, which is 0.57 percentage points higher than in 2024 (6.43%). In the electricity sector, in particular, the following developments took place.

i. Development Programs

According to the Concept for the Development of the Electric Power Industry of the RoK for 2023-2029 (the ‘Concept’), the commissioning of 11.7 GW of new generating capacity is planned by 2029, along with a reduction in grid depreciation and an increase in the share of RES in total generation to 12.5%. At the same time, for energy security purposes, coal‑fired generation will retain its presence in the medium term.

The Government of the Republic of Kazakhstan acknowledges in the Concept the existence of systemic problems:

a.    high grid depreciation (averaging 66%);
b.    growing electricity deficit (projected shortfall of up to 5.5 billion kWh).

In September 2024, the Ministry of Energy of the RoK approved the Concept for the Development of Hydrogen Energy in the Republic of Kazakhstan until 2030 (the ‘Hydrogen Energy Concept’). The document sets the following targets: production of 25,000 tonnes of hydrogen by 2030 (of which at least 50% ‘green’), export of 15,000 tonnes, construction of storage facilities with a capacity of 100,000 m³ and hydrogen pipelines with a length of 100 km, as well as the introduction of hydrogen buses in three cities.

The flagship project is Hyrasia One in the Mangystau Region, involving Germany's Svevind Energy Group: 40 GW of RES capacity, production of up to 2 million tonnes of green hydrogen annually, and investments of up to US$50 billion. The implementation of the Hydrogen Energy Concept will enable Kazakhstan to secure a position in the emerging global hydrogen market and diversify its energy exports.

In March 2026, the Government of the Republic of Kazakhstan approved the National Project ‘Development of Coal‑Fired Generation’. The document confirms that coal‑fired generation remains a fundamental part of the country’s energy balance over the long term. The project, covering 2026-2030, provides for the construction of 8 new coal‑fired plants and the modernization of 11 existing ones. According to the project passport, total funding will amount to approximately 7.84 trillion tenge, about 35,000 jobs will be created, and equipment depreciation is expected to decrease by 12.6%.

In April 2026, the President of the Republic of Kazakhstan approved the Strategy for the Development of the Nuclear Industry until 2050. The document identifies nuclear energy as a strategic priority for ensuring long‑term energy security and decarbonization of the economy. The Strategy establishes the need to cover the projected capacity deficit, which could reach approximately 2,660MW by 2032. The main goal is the commissioning of at least 3 nuclear power plants by 2050, which also aligns with Kazakhstan’s global commitments under the COP28 declaration to triple nuclear generation capacity.

In July 2026, in execution of the presidential instructions on diversifying the electric power industry, the Government approved the plan for the development of the hydropower industry of the Republic of Kazakhstan until 2035. As part of the expansion of generating capacity, the commissioning of at least 500MW of new hydropower capacity by the end of 2030 is envisaged, along with the construction of a pumped storage hydroelectric plant. The plan includes 30 measures across six key areas, including assessment of the water balance and energy potential of rivers, the formation of a unified database for planned facilities, land preparation, the creation of a pool of HPPs and pumped storage hydroelectric plants, as well as staffing and scientific‑technical support.

ii. Draft Law on the Development of Alternative Energy Sources

In February 2026, the Majilis of the Parliament of the Republic of Kazakhstan received a draft law ‘On introducing amendments and additions to certain legislative acts of the Republic of Kazakhstan on the development of alternative energy sources’ (the ‘Draft Law’). The Draft Law is aimed at:

a. Regulation of BESS

The Draft Law elaborates on the legal framework for the development of BESS. It provides that projects for the construction of energy storage systems will be subject to competitive selection through auction mechanisms. Commissioning volumes are to be determined jointly with the system operator JSC KEGOC, based on the actual needs of the power grid.

For BESS operators, the single off-taker (FSC) will enter into long-term contracts for up to 15 years, with payments made under the ‘availability of power service’ mechanism (capacity readiness service).

According to estimates by the Ministry of Energy of the RoK, the total need of the Kazakhstani power system for energy storage systems is approximately 3GW. Of this, about 1.4GW is planned to be commissioned within the framework of projects implemented on the basis of intergovernmental agreements.

The main objective of BESS is to balance the power system, enhance its stability, and facilitate the integration of RES. BESS are expected to ensure electricity supply during peak load hours and reduce dependence on electricity imports from Russia.

b. Expansion of the scope of alternative energy

The Draft Law extends regulation to new areas, including hydrogen and nuclear energy, and establishes a legal framework for the production of thermal energy using alternative technologies. The current Law on RES does not regulate in detail the production and use of all alternative energy sources, namely such sources as hydrogen, industrial gases, coalbed methane, or biofuels.

c. Improvement of B2B mechanisms

It is proposed to improve the mechanism of bilateral power purchase agreements (B2B) for RES projects, which is aimed at protecting investors and promoting market-based mechanisms for the sale of ‘green’ energy.

iii. Large-Scale Projects Utilizing BESS

To date, a number of large-scale projects utilizing BESS have been announced in Kazakhstan, implemented with the participation of leading international energy companies and financial institutions.

One of the largest and most technologically significant projects currently underway is the ‘Mirny’ wind power plant in the Zhambyl Region. The project, often referred to as a flagship BESS project in Kazakhstan, envisages the construction of a 1 GW wind farm integrated with the country’s largest energy storage system featuring 300 MW / 600 MWh capacity.

Total investment in the Mirny project amounts to approximately $1.2 billion. The final investment decision was made in April 2026, enabling the project to move into the active financing and construction phase. Full-capacity commissioning of the plant is scheduled for 2029.

The project participants include the international energy giant TotalEnergies (operator with a 60% stake), as well as Kazakh national companies Samruk-Energy and KazMunayGas, each holding 20%. A key technological feature is the use of an energy storage system supplied by Saft, a subsidiary of TotalEnergies.

A significant pool of international financing for the project was secured through a loan consortium led by the European Bank for Reconstruction and Development (EBRD), which is arranging a loan of up to $548 million. Other creditors include Proparco, Deutsche Investitions- und Entwicklungsgesellschaft, Development Bank of Kazakhstan, Société Générale, QNB Group, China Construction Bank, and Standard Chartered.

The Chinese state-owned energy corporation State Power Investment Corporation is making a significant contribution to the development of wind energy with storage systems. In partnership with Kazakh company Samruk-Energy, construction began in April 2026 on a 1 GW wind power plant in the Pavlodar Region. The project includes the integration of a 300 MW / 600 MWh BESS, which will enhance the stability and flexibility of the power system. Commissioning is scheduled for 2029.

Another large-scale program, supported by international financial institutions, is aimed at the construction of two wind power plants with a total capacity of up to 2 GW, each equipped with associated BESS. The total BESS capacity under this initiative is estimated at 600 MW / 1,200 MWh, which will enable not only generation but also effective storage of significant volumes of green energy. Commissioning is expected in 2028-2029.

The program is supported by an investment grant of €24.4 million allocated under the Mitigation Action Facility. This grant provides significant financial leverage, enabling the project to attract approximately €3 billion. Key participants and partners include the EBRD as the implementing organization, the Kazakhstan Investment Development Fund, Qazaq Green Power, as well as major international players including TotalEnergies, Masdar, W Solar Investment, and KazMunayGas.

III. THE POLICY AND REGULATORY FRAMEWORK

i. The Policy Background

The most important policy document for the renewable energy industry in Kazakhstan – the ‘Concept for the Transition of the RoK to a Green Economy by 2050’ – sets a target of 15 per cent of energy in the energy mix to be from RES by 2030 and 50% of energy in the energy mix to be from solar, wind, hydroelectric and nuclear power plants by 2050.

According to forecasts, by 2035 Kazakhstan’s RES capacity could reach 12.9GW, with wind energy becoming the main driver of growth (approximately 8.7GW). The auction mechanism remains the primary project selection tool: for 2026-2027, the commissioning of 6.7GW of new capacity is planned, of which nearly 4GW had already been allocated through auctions as of December 2025.

Notably, the Law on RES protects investors against the risk of regulatory changes to the subsidy regime, by freezing (stabilising) the subsidy for existing investors.

ii. The Regulatory and Consenting Framework

The key law governing electricity supply in Kazakhstan is the Law dated 9 July 2004 No. 588-II on the Electric Power Industry (the ‘Power Law’). Energy is considered a sui generis good under the Power Law[3]. In Kazakhstan, the electricity market is divided into wholesale and retail markets. The following comprise the wholesale electricity market:

a.    energy-producing organisations;
b.    energy transmission organisations;
c.    energy supply organisations;
d.    energy-producing organizations using RES;
e.    energy-producing organizations using secondary energy resources;
f.    energy-producing organizations using waste-to-energy recovery;
g.    consumers of electric energy;
h.    digital miners and administrators of hybrid groups included in the list of wholesale electricity market participants compiled by the system operator; 
i.    KEGOC[4] as the system operator;
j.    operator of the centralised trade[5]; and
k.    FSC as the single offtaker.

The regulation of the renewable energy sector is carried out by many state authorities, the most important of which are the following.

Among other things, the central government develops the main directions of state policy in the field of the use of RES and, in certain cases, provides state financial support (i.e., indirect state guarantees) to the FSC if the FSC fails to meet its contractual obligations of a designated single offtaker under the power purchase agreement (PPA) in relation to a RES project[6].

The Ministry of Energy implements state policy in the field of support for the use of RES as well as approves the RES facilities allocation scheme, taking into account the targets for the development of the sector.

Finally, local executive bodies of regions, cities of republican significance and the capital reserve and provide to investors land plots for the construction of RES facilities in accordance with Kazakh land legislation.

IV. RENEWABLE ENERGY PROJECT DEVELOPMENT

i. Project finance transaction structures

To date, Kazakhstan has managed to create a good and bankable legal and institutional framework for the development of renewables and waste-to-energy projects as, generally, such projects are procured on an independent power producer model, whereby a government designated entity (i.e., the FSC as a single offtaker) enters into a long-term (15 years for waste-to-energy and 20 years for renewables projects) PPA with a private sector entity to purchase power at a fixed auction price from the project, subject to annual indexation[7].

The legislation of Kazakhstan establishes investment incentives applicable to renewable energy projects. Such a project may be carried out under an investment agreement, provided that it satisfies the eligibility criteria for investment preferences. An investment agreement may afford the following investment preferences: exemption from corporate income tax and land tax (for a term of up to ten years), exemption from property tax (for a term of up to eight years), in‑kind government grants, and the right to engage foreign workforce.

ii. Power purchase

Renewable energy

Unlike conventional energy projects, renewable energy projects in Kazakhstan do not have to participate in the capacity market and, therefore, investors in renewable energy projects in Kazakhstan have only one source of income and compensation for expenses: the proceeds from the sale of electric power.

Comparison of investor-State contracts

Importantly, a renewable energy-producing company has the right, at its discretion, to sell the produced electric power using one of the following two options[8]:

a. Option I – guaranteed offtake, whereby FSC[9] as a single offtaker enters into a 20-year PPA[10] with a renewable energy-producing company to purchase all power at a fixed auction price determined based on the results of an electronic auction[11] and taking into account the indexation mechanism provided by the Law on RES; or

b. Option II – open market, whereby an investor may opt to implement a renewable energy project without guaranteed offtake by the FSC and, therefore, a renewable energy-producing company may wish to sell electric energy not to the FSC at fixed auction price, but to any other consumers at negotiable prices and terms according to concluded bilateral PPAs.

Notably, once a renewable energy-producing company has used Option II once, it cannot switch back to Option I.

To develop renewable sources of energy, Kazakhstan has introduced an electronic auction system, which has made the process of granting renewable energy projects open and transparent, and given impetus to the implementation of the most cost-effective projects[12]. At least one month before the expected date of the auction, the Ministry of Energy develops and publishes on its website the schedule of the auctions for the relevant calendar year. The schedule provides information about the land plots planned to be allocated for the construction of renewable energy facilities and the points of connection to the electric networks of energy transmission organisations, indicating the maximum allowable capacity and the number of possible connections.

Unlike auctions for the waste-to-energy projects, participation in RES auctions subjects investors to various qualification requirements that depend on the declared capacity of the project.

For projects with a capacity of up to 499MW inclusive, it is sufficient to confirm legal capacity, solvency, and provide basic corporate documents, bid security, as well as documents for the land plot or grid connection point. No experience in the construction and operation of RES facilities is required for this category of projects.

However, for projects with a capacity exceeding 499MW (large-scale projects), a special procedure applies: the investor shall demonstrate experience in investing in, constructing, and commissioning similar RES facilities with a total capacity of at least 100MW in the territory of the Republic of Kazakhstan. In addition, the share of Kazakh participation in the ownership structure of such investors shall be at least 51%. This category of projects is also subject to the obligation to build a BESS with a capacity of at least 30% of the plant’s capacity.

Auctions are conducted anonymously and remotely online through the joint stock company Kazakhstan Operator of the Electric Power and Power Market online trading system and in the form of a unilateral auction.

Based on the results of auctions, the FSC concludes PPAs with relevant winners of the auctions[13] and, as a single offtaker,[14] purchases all electric energy generated by a renewable energy plant for 20 years from the date of commencement of comprehensive tests and the date on which the electricity produced in the course of the trials was initially supplied to the unified electric power system of Kazakhstan; or from the date of expiry of the deadline for submitting the acceptance certificate of the facility in accordance with the PPA, whichever comes earlier.

Notably, the fixed auction price, determined based on the results of the electronic auction, in any case cannot exceed the current maximum auction price (the statutory cap) as approved by the Ministry of Energy for the applicable RES. For instance, current maximum auction prices for RES are as follows.[15]

It is important to note that since 2025, Kazakhstan has been actively developing a new trading format – ‘free auctions’, where investors may use their own land plots and grid connection points, thereby expanding participation opportunities.

To address currency and inflation risks, Kazakh legislation provides for annual indexation of auction prices for RES projects, starting from the second year of generation. Indexation is carried out once a year, effective 1 October.

A key advantage for investors is the right to choose one of two indexation formulas for the entire 20‑year term of the PPA:

a.    100% linkage to the consumer price index (CPI);
b.    100% linkage to changes in the exchange rate of the national currency (tenge) against a foreign currency.

The choice of formula is made at the time of concluding the agreement. The legislation also allows for a one‑time change of the chosen formula or of the foreign currency itself during the entire term of the PPA.

For projects attracting foreign financing, a one‑time indexation of the price for the construction period is provided, allowing compensation for cost increases due to exchange rate fluctuations between the date of the auction win and the date of the plant’s commissioning.

iii. Waste-to-energy

Similar to renewable energy projects, reimbursement of costs for the construction and operation of new waste-to-energy plants is carried out through purchase by the FSC of electric power produced by energy-producing organisations using energy waste utilisation and delivered by them to the unified electric power system of Kazakhstan at a fixed auction price, which is determined based on the results of the electronic auction[16] and taking into account the indexation mechanism provided for by special rules promulgated by the government. Unlike renewable energy projects, however, waste-to-energy projects shall be implemented on the basis of a 15-year and not a 20-year PPA[17]. Based on the results of auctions, therefore, the FSC concludes PPAs with relevant winners of the auctions and, as a single offtaker, purchases all electric energy generated by the applicable waste-to-energy plant for 15 years from the date of commencement of comprehensive tests and the date on which the electricity produced in the course of the trials was initially supplied to the unified electric power system of Kazakhstan.

Notably, such a fixed auction price in any case cannot exceed the current statutory cap for waste-to-energy projects. The maximum auction price shall be determined using formula prescribed in legislation and is subject to approval by the Minister of Ecology and Natural Resources (the Ministry of Ecology). Fixed auction prices for waste-to-energy projects, depending on the financing structure of the project and economic feasibility, are subject to annual indexation by the FSC using the formula prescribed in legislation and taking into account the consumer price index or extraordinary indexation in the event of a significant (more than 25%) change in the exchange rate of the national currency, or a combination thereof.

Notably, only energy-producing organisations included by the Ministry of Ecology on its List of Energy-producing Organisations Using Energy Waste Utilisation, and using relevant technical devices and installations technologically necessary for the operation of energy waste utilisation facilities, are allowed to participate in auctions for the selection of energy waste utilisation projects. Kazakh legislation establishes certain qualification requirements for applicants to be included in this list, including, among other things, requirements for:

a. construction and operation experience: the applicant (or any member of the consortium/partnership) must have experience in constructing at least 5 facilities, as well as at least 8 years of operational experience of waste‑to‑energy facilities;

b. operational efficiency: the applicant (or any member of the consortium/partnership) has completed the construction of a waste‑to‑energy facility that operates for at least 8,000 hours per year;

c. compliance with environmental standards: the technology proposed by the applicant must comply with environmental requirements equivalent to Directive 2010/75/EU of the European Parliament and of the Council on industrial emissions (integrated pollution prevention and control);

d. presence of a Kazakh resident in the consortium: in the case of a consortium or partnership, one of the members of such association must be a legal entity resident of the RoK, which acts as the main partner under the consortium agreement;

e. local experience: the applicant (or one of the consortium members that is a resident of the RoK) must meet the criterion of having at least 3 years of experience in waste processing and/or waste disposal in the territory of the RoK.

iv. Non-project finance development

The largest renewable energy projects developed in Kazakhstan to date have been financed by the state-owned Development Bank of Kazakhstan and multilateral development banks such as the European Bank for Reconstruction and Development, the Asian Development Bank, the Eurasian Development Bank, the Asian Infrastructure Investment Bank, the Chinese Development Bank, and the Industrial and Commercial Bank of China. Foreign investors have also finally believed in the seriousness of the intentions of Kazakhstan’s government to develop renewable energy – such as major players including Total Eren SA, SOLARNET, Hevel Group, UG Energy Ltd, Universal Energy Co Ltd, Risen Energy and other institutional investors who prioritise returns above all – and have already invested in renewable energy in Kazakhstan.

Kazakhstan continues to strengthen its position as a regional leader in attracting investment in green energy. In April 2026, the Government of the Republic of Kazakhstan and the European Bank for Reconstruction and Development (EBRD) launched the Just Energy Transition Platform (QaJET), which aims to attract investment in the development of the country's renewable energy sector.

The country’s achievements have been reflected in the international Climatescope ranking, where Kazakhstan rose from 54th place in 2017 to 24th place in 2025 among emerging markets, indicating the sector's growing attractiveness to investors.

v. Regulation of net consumers

To date, distributed (on-site) and residential renewable energy is not widespread in Kazakhstan and thus does not play any significant role in the national economy. However, since 2024, the legislative framework in this area has changed radically: the state has abandoned the outdated mechanism of one‑time cost compensation and switched to a net‑metering system (selling surplus to the grid).

In 2024 the concept of a net consumer has been introduced into legislation.

Key conditions and requirements for net consumers:

a.    the installation shall qualify as a ‘small scale facility’. Although the law does not strictly limit capacity for individuals to the previous 5 kW, the main requirement is that generation be intended for own consumption. For legal entities, by laws often set a threshold of up to 100 kW;
b.    the facility shall be connected to the distribution grid and equipped with separate metering systems (consumption from the grid and supply to the grid are recorded separately).

The most important innovation aimed at stimulating the development of micro‑generation is the simplification of the tax regime. The legislation explicitly provides that an individual acting as a net consumer is not required to register as an individual entrepreneur. This removes the main administrative barrier for ordinary households.

V. RENEWABLE ENERGY SUPPLY CHAINS

The Kazakh Government defined strategic priorities in the field of renewable energy development, which include diversification of the energy balance, ensuring energy security, and the development of local equipment manufacturing.

The state actively supports the development of local industry. In September 2025, a technical launch took place in the Zhambyl Region of a plant for the localization of wind energy components with an annual capacity of 2GW, implemented jointly with the Chinese company SANY Renewables. The plant has already received its first major orders, including a contract for the supply of 200MW of wind turbines for the Mirny project of France’s TotalEnergies.

Alongside the development of localization, Kazakhstan continues to attract imported equipment and international investment, which creates a competitive environment and facilitates technology transfer.

VI. OTHER KEY CONSIDERATIONS

i. Thermal energy

Kazakh law requires that all thermal energy produced by RES facilities and supplied to the district heating system of a locality with parameters corresponding to the parameters of the coolant in the district heating system shall be purchased by the locality’s energy supply organisation. Moreover, contracts for the purchase and sale of thermal energy produced by energy-producing organisations using RES are concluded for a period of at least the payback period of the project for the construction of an object for the use of RES, as defined in the relevant feasibility study. An energy-producing organisation using RES, when supplying thermal energy, is exempt from paying for the services of energy transmission organisations for the transmission of thermal energy.

The costs of thermal energy produced by such RES facilities is included in the tariff of the energy supply organisation in accordance with the procedure established by Kazakh legislation on natural monopolies.

ii. Flood electric energy

Each year, about 300 million kilowatts per hour are produced in Kazakhstan during the spring flood. This is flood electric energy – that is, electric energy generated by energy-producing organisations (hydroelectric power plants) during environmental releases of water in accordance with the water legislation of Kazakhstan. Such energy-producing organisations are required by law to sell all generated flood electric energy to the FSC at the maximum tariff for electric energy in accordance with the procedure established by the Law on RES. Further, the FSC directs this inexpensive electricity to reduce the cost of the tariff to support energy from renewable energy sources.

VII. CONCLUSIONS AND OUTLOOK

Kazakhstan is undergoing a large‑scale transformation of its energy sector, defining a multi‑vector development strategy. As President Kassym‑Jomart Tokayev stated at the National Kurultai in January 2026, the country will develop all available energy sources: coal, gas, hydropower, renewables, and nuclear energy.

The country is implementing a large‑scale program for the commissioning of new generating capacity – projects totaling 26GW, including a separate national project for coal‑fired generation of 7.8GW. The electricity deficit is expected to be eliminated, and the country will move to a surplus model.

The share of RES in the energy balance reached 7% in 2025, with plans to increase it to 15% by 2030 and 50% by 2050. At the same time, the development of green energy is proceeding in parallel with conventional generation within a pragmatic approach.

A key element of the strategy has been the development of local manufacturing, which demonstrates real progress in the localization of RES technologies.

Thus, Kazakhstan is moving toward a diversified energy balance while simultaneously addressing power system reliability issues, developing local production, and attracting international investment.

 

GRATA International, Kazakhstan

Lola Abdukhalykova, Partner

Bibizeinep Bimagambetova, Associate[18] 

 

This information is a product of the Banking and Finance team. It is provided for your convenience and does not constitute legal advice. It is prepared for the general information of our clients and other interested persons. This information should not be acted upon in any specific situation without appropriate legal advice.

We hope the information above will be useful to you. Please feel free to contact us at finance_securities@gratanet.com if you have any questions or comments. We would be happy to receive any feedback.

Best Regards,

Banking & Finance Team

GRATA International

 

References 

[1] Under Kazakh law, the term ‘secondary energy resources’ means energy resources formed as a by-product in the process of industrial production in terms of the use of ferroalloy, coke and blast furnace gases used for the production of electric energy.
[2] JSC KEGOC is a national company responsible for centralized operational and dispatching control, ensuring parallel operation with the power systems of other states, maintaining balance within the Unified Power System of the Republic of Kazakhstan, providing system services, and procuring ancillary services from wholesale electricity market participants. It also carries out maintenance and ensures the operational readiness of the national power grid, as well as its development.
[3] Energy (i.e., all types of energy, including electric, thermal and nuclear energy) is generally considered to be a physical object and movable property in Kazakh legal literature.
[4] KEGOC acts as the system operator and is the national transmission grid operator of Kazakhstan, 85% of the shares in which are held by the Sovereign Wealth Fund Samruk-Kazyna (Samruk-Kazyna). The sole shareholder of Samruk-Kazyna is the state.
[5] Joint stock company Kazakhstan Operator of the Electric Power and Power Market (KOREM) acts as the operator of the centralised trade.
[6] Interestingly, Kazakh law does not provide similar mechanism of indirect state guarantee to strengthen the FSC’s creditworthiness as a single offtaker for waste-to-energy projects.
[7] Other measures of state support include that renewable energy generators are exempt from payment for electricity transmission services; financial settlement of imbalances due to renewable energy sources is carried out by the FSC; priority dispatch for renewable energy generators; the energy transmission company has no right to refuse to connect the renewable energy facility due to lack of network availability; the energy transmission company bears the expenses for the network’s reconstruction and expansion; and land plots and connection points are reserved for renewable energy auctions. Kazakh law provides investment preferences for renewable energy projects. A renewable energy project can qualify as a priority investment project for the purposes of Kazakh law if it meets certain criteria that enable it to seek the investment preferences available for priority investment projects (in addition to those available for ordinary investment projects, such as a land plot for free use and an exemption from customs duties for a period of up to five years) including, among other things, tax preferences in the form of corporate income tax and land tax exemptions (for up to 10 years), as well as a property tax exemption (for up to eight years).
[8] It should be noted that almost any investment project in the energy sector, including renewable energy projects, can be implemented under the legal framework of the Law on RES or the Law of the Republic of Kazakhstan dated 31 October 2015 No. 379-V on Public–Private Partnership (the ‘PPP Law’). Foreign investors that consider investing in big renewable projects in Kazakhstan, in particular, may wish to consider the PPP legal framework instead of the specialised legal framework under the Law on RES because it gives more flexibility and, in theory, can secure better bankability for the project. It can even, in certain cases, enable getting a project without open tender or auction through direct negotiations.
[9] The FSC acts as the single offtaker and conducts the centralised purchase and sale of electricity for renewable energy projects and electricity produced by waste-to-energy plants.
[10] Such PPAs shall strictly follow in form and substance the template PPA for RES projects as promulgated by law.
[11] KOREM acts as the organiser of the auction for both renewable projects and waste-to-energy projects.
[12] It should be noted that, generally, auction is required only for Option I. Option II suggests that an investor is ready to implement RES projects without any or with just limited assistance from the state and, therefore, an investor does not need to participate in any auctions to implement its project.
[13] Winners of the auctions are included by the Ministry of Energy in its List of Renewable Energy-Producing Companies upon declaration of the results of the auctions by KOREM. This list is published by the Ministry of Energy on its website.
[14] In turn, the FSC as intermediary sells electricity to conventional power producers, who then supply all energy (both renewable and conventional energy) to final users. Thus, support for renewable energy in Kazakhstan is essentially carried out by smearing an expensive green tariff among consumers throughout Kazakhstan. Notably, the selling price of electric energy from a conventional power producer is the sum of sale price of electric energy from a conventional energy-producing organization consists of the marginal tariff (bid price) plus a premium to support the use of RES determined in accordance with the legislation of Kazakhstan. 
[15] The maximum auction prices for subsequent auctions for renewable energy sources projects are determined based on the results of previous auctions at the maximum price of the winner.
[16] Information on the proposed auction shall be placed by KOREM on its website together with the terms and conditions for accepting documents and registering applicants in the auction.
[17] Such PPAs shall strictly follow in form and substance a template PPA for wate-to-energy projects as promulgated by law.
[18] Bibizeinep was an associate at GRATA at the time this article was written and has since left the firm.