Kazakhstan's Samruk-Energo Seeks Investments for 2,640-Megawatt Nuclear Power Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Samruk-Energo, a subsidiary of Samruk State Holding Company (Astana, Kazakhstan), initiated an open tender process to select a strategic investment partner for its $4.7 billion nuclear power generation project near Lake Balkhash in the southeastern Almaty region of Kazakhstan. The firm will accept proposals from interested parties until November 13. This is the first power project being undertaken by Kazakhstan in the public-private partnership mode. Earlier this year, the firm received instructions from Prime Minister Karim Masimov to commence the competitive bidding process for selection of a suitable investor for the project.

Construction of the 2,640-megawatt (MW) project is scheduled to commence next year. Samruk-Energo has entered into memorandums of understanding with China Datang Corporation (Beijing) and Korea Electric Power Corporation (NYSE:KEP) (Seoul, South Korea) for joint development of the project. The power station will consist of two modules of 1,320 MW each. Both the modules will consist of two blocks of 660 MW each. The first module is scheduled to come into operation in 2013, followed by the second in 2016. The project is expected to generate 17 billion kilowatt-hours (kWh) of electricity per year and will cater to power requirements in the southern regions of Kazakhstan.

Kazakhstan has 71 power generation plants with an aggregate installed capacity of 17,000 MW. Of these plants, 80% are coal-fired while 12% are hydroelectric units. Almost 85% of Kazakhstan's power is generated in coal-fed power plants located in the northern regions of the country near coal reserves.

The southern Almaty region of the country is witnessing rapid industrial and economic development. Consequently, the existing power generation and transmission facilities in the region are inadequate to cope with growth in the region, leading to frequent disruptions in power supply. Kazakhstan also depends on its neighbors Kyrgyzstan and Tajikistan to bridge the power deficit, but unregulated utilization of water resources in central Asia hinders the hydropower stations in this region.

Samruk-Energo is looking to combat the power crisis through modernization, use of state-of-the-art technology, and the introduction of modern management principles in energy enterprises in the country. Theft of electricity also accounts for 20% of losses in the Almaty region. Obsolete technology and outmoded practices impact the efficiency of the existing 200 substations in the region, most of which have been in operation for the last three decades. Samruk-Energo hopes to attract investments of about $500 million to upgrade and modernize existing power generating facilities and organizations. The firm plans to adopt a three-pronged approach to revamp the power sector in the region. Starting with the introduction of mechanisms to lure investments from private sector players, the firm will develop and implement a balanced tariff policy in the combined interest the state, energy enterprises and people. Finally, the firm will propagate the use of energy-saving technologies at homes, commercial establishments and enterprises.

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