With effect from 15 February 2025, amendments are being introduced to the rules for organizing and holding auctions for projects of construction of facilities utilizing renewable energy sources (RES) approved by Order No. 466 of the Minister of Energy of Kazakhstan dated 21 December 2017 (the Rules). A key change is that differentiated qualification requirements have now been established in respect of RES auctions for projects with a capacity of (i) up to and including 499 MW, and (ii) from 500 MW and above (Large Projects).

Qualification requirements.
Where Large Projects are concerned, the amendments introduce additional qualification requirements for bidders, in particular, they must have the following:

• Prior experience implementing RES projects in Kazakhstan with an aggregate installed capacity of at least 100 MW (Prior RES Project).
• At least 25 percent of shares/participating interests in the charter capital of a Kazakhstan legal entity that is the owner of a Prior RES Project (as of the date of its commissioning) by:

• being a participant in the auction, and/or
• its shareholders/participants (including ultimate owners) controlling across the entire ownership structure, at least 51 percent of shares or participating interests in the charter capital of the owner of a Prior RES Project.

• At least 51 percent of shares/interests in the charter capital of a Kazakhstan legal entity that is the owner of a Prior RES Project must be held by ultimate owners who are Kazakhstan citizens or Kazakhstan legal entities with no foreign participation.

Electric power storage systems.

The obligation is introduced for winners of auctions for Large Projects to ensure that the electric power storage system in place (i) has a capacity of at least 30 percent of the installed capacity of a RES facility, (ii) has a capacity capable of delivering power for two hours, and (iii) is capable of being operated for the entire term of the power purchase agreement. In addition, the amendments introduce a prohibition on auction winners assigning their rights or obligations to third parties.

Until now, the maximum installed capacity of RES projects auctioned by the state never exceeded 200 MW. This meant that large investors would often look for more sizeable projects, ultimately choosing to move to other countries that offered such RES projects.

Accordingly, these amendments should allow the regulator to respond to investors’ needs as well as to increase the share of RES power generation in the total energy mix.

That said, prior experience with RES projects in Kazakhstan is a must, as the amended Rules do not permit foreign developers without such prior experience to participate in Large Project auctions, even if they possess sufficient financial resources, technologies and international experience in RES.

We actively monitor legislative updates and will keep you informed. Should you have any questions, please contact us.