A syndicate of banks will finance Almaty CHP-2 transfer to gas

A syndicate of banks will finance Almaty CHP-2 transfer to gas

Works on transfer to gas and complete retrofit of one of the largest thermal power plants in Kazakhstan - Almaty CHP-2 have reached the stage of practical implementation. The issues related to the sources of financing for the project were resolved after an international tender for the construction of a gas station announced in October.

Today, November 25, 2022, in Almaty, the Facility Agreement for financing the project “Modernization of Almaty CHP-2 with minimization of environmental impact” was signed between “Almaty Power Plants” JSC (APP), the owner of the station, and the European Bank for Reconstruction and Development (EBRD). The amount of the deal is 130 bn. tenge.

During the event, an Agreement of Intent on provision of financing for the project was signed between APP and the Development Bank of Kazakhstan (DBK).

Works on construction of a new gas station at the site next to the old CHP-2 is planned with the involvement of funds from the syndicate, leading international and Kazakh banks - the EBRD, the Asian Development Bank (ADB) and the Development Bank of Kazakhstan (DBK). The project will be financed in the national currency - in tenge, with a floating interest rate pegged to TONIA (Tenge Overnight Index Average).

The project is implemented with the support of “Samruk-Kazyna” Fund” JSC. The Sovereign Wealth Fund will provide its corporate guarantee, which, according to experts, helps to minimize risks and improve lending terms, and the agreement itself provides the project with long-term financing.

The facility agreement was signed by Yerlan Kirkimbaev, “APP” JSC Chairman of the Board, and Aida Sitdikova, Director of the Energy Department for the Eurasia, Middle East and Africa regions of the EBRD. The document signing event was held with the participation of representatives of the EBRD, DBK, “Samruk-Energy” JSC, “APP” JSC, Almaty city mayor administration.

Serik Tutebayev, the Chairman of the Board of “Samruk-Energy” JSC, noted that a lot of work had been done to arrange financing, including environmental impact assessment in accordance with international standards and assessment of applicable technologies, considering world experience. “The Government of the Republic of Kazakhstan, “Samruk-Kazyna” Fund and “Samruk-Energy” JSC focus efforts on the development of Almaty mega city. In addition to the modernization of the Almaty CHP-2, in order to improve the environmental situation and further develop renewable energy facilities in the Almaty energy hub, we are also implementing the project “Construction of a 545 MW gas station with a combined cycle” on the territory of Almaty CHP-3. This facility will be put into operation in 2025 and will significantly reduce the shortage of maneuvering capacity in this region, Serik Tutebayev said.

According to the EBRD Vice President Alain Pilloux, the bank expects climate and green finance to account for more than half of the EBRD's annual investments by 2025. “This is a great example of a green project that will improve the air quality in Almaty, the quality of life of the local population and bring Kazakhstan closer to complying with the Paris Agreement and its goal of achieving carbon neutrality by 2060,” said the EBRD representative.

As a reminder, earlier, on October 27, 2022, the EBRD announced the launch of a two-stage open international tender, which is conducted in accordance with the rules of an international financial institution. The technical specification for the selection of an EPC contractor and the draft EPC contract were developed according to the FIDIC (International Federation of Consulting Engineers) Yellow Book. Acceptance of applications from potential contractors for the supply of equipment, design, and construction of a new gas station at the site of Almaty CHP-2 within the first stage will last until December 15, 2022.

The project "Modernization of Almaty CHP-2 with minimization of environmental impact" involves the construction of a new station using gas turbine technologies with a capacity of up to 600 MW at the site of Almaty CHP-2. The deadline for full commissioning is December 2026. The project aims to reduce the negative environmental impact of the station on Almaty city’s environment by switching the station to firing natural gas, as well as providing consumers in Almaty city and the Almaty region with a reliable and uninterrupted supply of heat and electricity in accordance with load schedules.

Based on expert estimates, the plant’s gasification project meets the most stringent requirements of the Republic of Kazakhstan and the European Union. These compliances will reduce emissions of harmful substances from CHP plants by 93%; eliminate particulate matters and sulfur oxides from emissions, create and dispose ash and slag waste; will provide noiseless operation of the units. All this together should reduce the area of ​​influence of the plant on the environment and residents of Almaty mega city.


Press Service of “Samruk-Energy” JSC.

Tel: 8(7172) 55-30-62; 8 (7172) 55-30-66

This email address is being protected from spambots. You need JavaScript enabled to view it.