VI. KAZENERGY Eurasian Forum

Wind energy development in the emerging markets including Kazakhstan

Andreas Thomas, Senior Vice President Business Development

October 2011

Wind energy developments in Kazakhstan 2

Wind energy developments in emerging marketsFactors for market development

1. Wind as natural and renewable resource 2. Political commitment and support to start the development of wind energy market3. Legal framework with laws, incentive systems and procedures4. Technical conditions – national grid system 5. Partners and conditions for financing projects and related businesses

Wind energy developments in Kazakhstan 3

Wind as renewable resource Conditions in Kazakhstan

Wind potential •Estimated with1820 bn kWh p.a. •Acc. Results of UNDP wind energy program wind speeds between 5.9 and 9.7 m/s

•Vestas’ site hunt in general and for several projects verifies similar picture

Excellent conditions to develop wind energy in Kazakhstan

Wind energy developments in Kazakhstan 4

Political commitment Leading position in Central Asia in focus

• Political target to be the leading nation in energy and RES in Central Asia • “Electric power industry development program” – 1% or 1 bn kWh of generated power

by RES in 2014 possible • Political support and finance of the UNDP program to develop the wind energy market

Wind energy developments in Kazakhstan 5

Legal framework as basis for market implementation Legal law, incentive system and procedures

Legal law•“Promotion of Utilization of Renewable energies of Republic of Kazakhstan” from October 2009 with the target of 5% of RES in 2024

Incentive system •Application for project related tariff with TEO •Advice from several international organization for fixed feed-in tariff acc. experiences in countries like Germany, UK, Italy

Procedures •Regulations available but lack of experiences at implementation •Clarification on administrative, legal procedures and permitting guidelines

Improvements at tariff system and regulations would support wind energy development

Wind energy developments in Kazakhstan 6

Technical conditions National Grid System

Best grid conditions•National and unified grid system •Clear system at ownerships at high, medium and low voltage level•Adequate capacity in whole grid system and regions with good wind conditions •Close grid connection points •Updated technical equipment to avoid energy losses and inefficiency

Grid situation in Kazakhstan•National Unified system with three independent systems, but lack of link •Large remote areas with good wind conditions•Line losses of 25-50% due to very large distances •Aging transmission infrastructure

Program to improve National Grid System started

Wind energy developments in Kazakhstan 7

Strong partners for financing of market development National and International partners

Financing for wind energy projects 1.Understanding Capital Supply of Financial Institutions

• International banks – available • National, local banks• Multilaterals available and interested • ECAs from Western Europe

2.Understanding Customers Capital Demand - equity and export financing

3.Matching Capital Supply and Capital Demand

Financing of market development projects •Grid development • Infrastructure (transport, logistics)•Production facilities

Multilaterals, e.g. EBRD, IFC available and interested

Wind energy developments in Kazakhstan 8

Conclusions

Wind as natural and renewable resource

excellent conditions

Political commitment and support to start the development of wind energy market

RES on the political agenda

Legal framework with laws, incentive systems and procedures

good conditions with improvement

Technical conditions – national grid system

Program to start improvements

Partners and conditions for financing projects and related businesses

International and National partners

Excellent conditions to develop wind energy market in Kazakhstan

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