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Trans-Kazakhstan Railway Corridor

Kazakhstan Accelerates Development of Trans-Kazakhstan Railway Corridor

With a closed domestic railway network now fully in place, Kazakhstan has shifted focus toward developing new routes aimed at enhancing export and transit cargo delivery. In early 2025, President Kassym-Jomart Tokayev ordered the acceleration of the Trans-Kazakhstan railway corridor, an essential component of the Trans-Caspian International Transport Route. Central to this effort is the construction of the Mointy-Kyzylzhar railway line. Rail transport remains a vital sector of Kazakhstan’s economy, shaping both domestic commodity markets and the country’s strategic transit potential. In the face of shifting geopolitical dynamics and rising demand for freight transport, Kazakhstan has gained fresh opportunities to expand its international logistics capabilities. However, aging infrastructure, bottlenecks, and missing links continue to restrict this potential and hinder trade growth. In response, Kazakhstan has launched a series of major infrastructure projects, including the Mointy-Kyzylzhar line, an extension of the existing Dostyk-Mointy branch. According to JSC “NC “KTZ”, the project will expand the nation’s transit capacity, ease congestion on the Mointy-Zharyk segment, remove key bottlenecks, and reduce delivery times through route optimization. It is also expected to stimulate economic activity in the Karaganda and Ulytau regions by strengthening export logistics and creating new jobs. The direct link between Mointy and Kyzylzhar stations will shorten the Trans-Caspian corridor and reduce traffic on overburdened parts of the network. In an interview with The Times of Central Asia, Saken Rakhmetov, Managing Director of the Mainline Network Directorate at KTZ, noted that the project will shorten delivery distances and eliminate locomotive changeovers at Mointy and Zharyk. This, he said, could reduce shipping times from the Chinese border to the port of Aktau by more than a day, depending on the route. The project entails constructing over 390 kilometers of rail infrastructure, including single-track lines, stations, two overpasses, 35 bridges, 21 cattle crossings, 108 culverts, 16 passing loops, and five stations. Topographic, geodetic, geological, and hydrological surveys have been completed. More than 96% of the planned 12.9 million cubic meters of roadbed has been filled. Installation of culverts is underway, with 11 already completed and 14 in progress. More than half of the rail-sleeper grid, 165 kilometers out of 323, has been assembled, with track laying initiated at both ends. According to the approved timeline, construction of pipes, bridges, and overpasses, along with power and communication systems and related infrastructure, is scheduled for completion in 2026. A notable feature of the project is the use of jointless track technology, which employs long continuous welded rails rather than standard 25-meter links. This design reduces dynamic stress on the track, cuts wear and tear on infrastructure and rolling stock, improves energy efficiency, and allows higher train speeds. At the height of construction during July-August, approximately 550 pieces of machinery and up to 1,150 workers were deployed. Upon completion, the line is expected to create at least 700 permanent jobs. According to KTZ, about 80% of the goods, services, and labor used in the project are sourced locally, with final figures to be confirmed after a state review...

Oil

Kazakhstan Has No Plans to Privatize Major Oil Refineries

Kazakhstan’s government is not considering the sale of its major oil refineries, despite their inclusion on a national privatization list proposed by the antitrust authority. Energy Minister Yerlan Akkenzhenov announced during a briefing in Astana. Kazakhstan has three large oil refineries: in Pavlodar, Atyrau, and Shymkent. The Pavlodar and Atyrau plants are fully state-owned through the national oil and gas company KazMunayGas and its subsidiaries. The Shymkent refinery operates as a 50-50 joint venture between KazMunayGas and the China National Petroleum Corporation (CNPC), through the PetroKazakhstan Group. In March, the Agency for the Protection and Development of Competition (AZRK) proposed examining options for the partial privatization of the Pavlodar and Atyrau refineries, arguing that the Shymkent plant has benefited from greater efficiency through private sector involvement. In November, both state-owned refineries were listed among 473 entities marked for potential privatization, with a target date of 2028. However, Akkenzhenov clarified that listing an asset on the privatization map does not imply any active plans for its sale. “This is not true; there are no negotiations at the government level today,” he said. “The Agency for the Protection and Development of Competition is operating within its mandate to foster a competitive environment. But this does not mean the state intends to sell the refineries.” He emphasized that the refineries are among the country's most profitable strategic assets, and concerns that they might be sold "for a song" are unfounded. The minister noted that proper valuation methods, such as property value or EBITDA multipliers, would guide any assessment of the assets. “For example, EBITDA multiplied by a factor of five. So, claims that these assets would be sold cheaply are incorrect. Overall, I want to confirm that we are not going to sell them,” he said. As previously reported by The Times of Central Asia, Kazakhstan is exploring foreign investment opportunities for a planned fourth major oil refinery, a project aimed at increasing domestic processing capacity amid rising fuel demand.

Lukoil

Kazakhstan Yet to Decide on Potential Purchase of LUKOIL Assets

Kazakhstan holds the legal right of first refusal on any potential sale of LUKOIL's assets within its territory, but the authorities have not initiated negotiations to acquire them, Energy Minister Yerlan Akkenzhenov has said during a recent briefing. In October, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) expanded restrictions affecting Russian energy companies, including certain transactions involving LUKOIL and Rosneft, granting temporary licenses permitting specified transactions and wind-down activities until November 21. The United Kingdom also issued restrictions on October 15. In response, LUKOIL began exploring the sale of its foreign assets, including holdings in Kazakhstan. LUKOIL has maintained a presence in Kazakhstan since 1995. The company currently holds a 13.5% stake in Karachaganak Petroleum Operating B.V. (operator of the Karachaganak field), 5% of Tengizchevroil LLP (which develops the Tengiz field), 50% of Turgai Petroleum JSC (Kumkol field operator), and 12.5% of the Caspian Pipeline Consortium (CPC), the primary export route for Kazakh oil. However, several of LUKOIL’s international projects, such as its involvement in Tengiz and Karachaganak, as well as the CPC, have received exemptions from U.S. and UK sanctions. OFAC recently extended a license allowing negotiations and agreements related to the potential sale of LUKOIL International GmbH or other affiliated entities until January 17, 2026. Speaking at the briefing, Minister Akkenzhenov stated that Kazakhstan is not rushing to engage in any asset acquisition discussions. "The deadline has now been extended until mid-January, and we are all awaiting the conclusion of that period and any further developments. The government is not currently negotiating the purchase of these assets," Akkenzhenov said. "However, many companies around the world are interested, and I would like to remind everyone that Kazakhstan has priority rights under the Subsurface Code. We will decide in due course whether to exercise this right." Akkenzhenov also addressed the ongoing arbitration dispute over the Kashagan oil field, the largest in the Kazakh sector of the Caspian Sea. According to the minister, substantive legal proceedings are not expected to begin before the second half of 2026, with a more detailed review likely to follow in 2027. “Currently, the process is limited to collecting documents. It is premature to speculate on potential arbitration amounts, as the court has not yet accepted the case for detailed consideration,” he said. As previously reported by The Times of Central Asia, Kazakhstan’s arbitration claims against the NCOC consortium developing Kashagan, which includes Shell, ExxonMobil, TotalEnergies, and Eni, exceed $150 billion.

Advanced Technologies

Kazakhstan Turns from Pipelines to Processors

Kazakhstan’s strategic plan for advanced computing represents a diversification of its traditional oil, gas, and transit profile and of the wider national economy. A $2 billion Nvidia-linked initiative now turns on three main elements. First is a national supercomputer using Nvidia H200 chips, with headline AI performance around 2 exaflops. Second is a planned 100 MW data-center campus, designed to expand capacity for commercial users over several years. Third is a “sovereign AI hub” concept that promises long-term chip access for sensitive public-sector workloads. Prior to this package, Kazakhstan had already moved unusually quickly to build high-end AI and computing infrastructure, treating digital capacity as central to its development policy. The national supercomputer is now the most powerful system in Central Asia and is housed in a Tier III state data center intended for use by universities, startups, and corporate tenants. The hardware push accompanies a wider digital policy agenda, including new training programs with Nvidia to expand the country’s AI talent base. Parallel initiatives with the United States seek to anchor Kazakhstan more firmly within Western regulatory and connectivity frameworks, as part of a broader attempt to move beyond hydrocarbons and build domestic capability in computation-heavy activities. Kazakhstan’s New AI Statecraft Astana is presenting the Nvidia package as an economic instrument, not just a hardware upgrade. Senior officials now describe advanced computing as a new pillar of national development, on a par with hydrocarbons and transit. Recent policy statements frame AI and digital infrastructure as central, not a side theme of “innovation” policy. In parallel, the long-running “Digital Kazakhstan” agenda has moved from e-government and broadband roll-out into a second phase where data centers, national platforms, and specialized training come to the foreground. Within that shift, “sovereign AI” is becoming a core organizing idea. Officials and local specialists talk about national language models that can handle Kazakh, Russian, and other regional languages, and about keeping sensitive public-sector data on infrastructure under national jurisdiction. The new supercomputer and the sovereign AI hub are presented as the place where that work will happen at scale: training and serving models for government services, regulatory tasks, and domestic firms, rather than relying entirely on foreign platforms. The Nvidia partnership is therefore framed as a way to secure long-term access to leading chips for these “sovereign” workloads, even as global export rules tighten. The same initiative also underwrites a shift in Kazakhstan’s self-presentation from a “pipeline corridor” to Kazakhstan as a corridor for data and high-end digital services. The government has begun to link the sovereign AI hub and supercomputer to a set of fiber-optic projects across the Caspian that aim to tie Central Asia more tightly into Eurasian data routes. The same geography that once made Kazakhstan a crucial link for oil, gas, and rail freight can now make it a regional conduit for digital traffic and AI-enabled services. Kazakhstan is also using the package to deepen a specific diplomatic track with the United States. Joint announcements and working groups on digital transformation,...

Starlink

From the Steppe to Space: Kazakhstan Tests First Direct-to-Cell Phone Call

In a remote part of Kazakhstan, a standard 4G smartphone has made Central Asia’s first satellite-linked phone call, thanks to a field test by Beeline Kazakhstan and SpaceX’s Starlink network. The trial successfully routed a WhatsApp voice call and text messages through Starlink Direct-to-Cell satellites, demonstrating that ordinary phones can stay connected even where traditional mobile coverage ends. The demonstration was carried out in Kazakhstan’s Akmolinskaya region and confirmed the interoperability between Starlink’s satellites and Beeline’s terrestrial network. During the test, Beeline Kazakhstan CEO Evgeniy Nastradin and Kazakhstan’s Deputy Prime Minister Zhaslan Madiyev placed a WhatsApp audio call via Starlink to VEON Group CEO Kaan Terzioglu using a regular smartphone and SIM card. They also exchanged SMS and WhatsApp messages, effectively merging satellite links with the country’s mobile infrastructure for the first time. Kazakhstan has vast stretches of steppe and mountains where cell towers are sparse. Officials involved in the project say satellite-enabled connectivity offers a vital new layer of coverage for these remote regions. “Starlink’s Direct-to-Cell satellites make it possible to stay connected in places where traditional infrastructure is unavailable: in the mountains, the steppe, forests, and across long distances,” Madiyev noted, calling the technology “more than just a convenience – it is an important safety measure [that will ensure people] can stay connected in any part of the country.” Madiyev added that the ability to send a message from a dead zone without any special equipment “has the potential to save lives” in emergencies. Beeline Kazakhstan’s leadership similarly emphasized the significance of the milestone. By blending Starlink’s space-based relays with Beeline’s ground towers, customers will be able to stay connected anywhere in Kazakhstan. The initiative has government support and is backed by Kazakhstan’s Ministry of Artificial Intelligence and Digital Development as part of a push to improve nationwide connectivity. Starlink Direct-to-Cell is a new capability of SpaceX’s Starlink satellite internet constellation that effectively turns satellites into cell towers in space. The satellites carry special cellular antennas (eNodeB modems) and link with ground networks via laser backhaul, allowing a phone to connect to the satellite as if roaming on a normal network. Crucially, this works with existing phones without requiring any new hardware or apps. The technology aims to eliminate mobile dead zones, as over 50% of the world’s land area still lacks cellular coverage. The Kazakhstan trial is part of a broader wave of satellite-cellular convergence. In November, Ukraine became the first country in Europe to launch Starlink’s direct-to-phone service, with VEON’s subsidiary Kyivstar initially offering satellite-powered text messaging to keep people connected during wartime blackouts and disaster situations. Voice calling and data services are expected to follow next year, underscoring the technology’s value for resilience when traditional infrastructure is disrupted. Following this week’s successful test, Beeline Kazakhstan plans to roll out Starlink Direct-to-Cell connectivity for its own customers, beginning with SMS text services in 2026, pending regulatory approval. Data connectivity would come next, expanding to full-service coverage in phases. Beeline serves over eleven million mobile subscribers in...

Education Reform

World Bank Approves $250 Million Loan to Expand Student Financing in Uzbekistan

The World Bank has approved a $250 million loan to support Uzbekistan’s ambitious reform of its student financing system, the institution announced on December 11. The funding will back the Edulmkon Program, a three-year initiative aimed at expanding equitable access to higher and vocational education across the country. Scheduled for implementation between 2026 and 2028, the program is expected to benefit approximately 600,000 young people. Roughly 80% of the loan will be allocated to tuition loans for students from low-income families and for women, groups that continue to face significant barriers to accessing higher education. Uzbekistan, home to around 10 million people aged 14 to 30, has made educational reform a national priority in recent years. This push has led to a surge in the number of universities and vocational institutions, as well as a dramatic rise in enrollment. Between 2017 and 2024, youth participation in higher education increased from 8% to 48%. However, the rapid expansion has exposed weaknesses in the country’s student loan system, which is based on state subsidized loans issued through commercial banks. The World Bank has noted that the current model is not well aligned with labor market needs, as loans are not directed toward high demand fields such as science, technology, engineering, and mathematics (STEM), as well as information and communication technology (ICT). This misalignment has contributed to graduate underemployment, while gender disparities persist. Although women represent more than half of all university students and are the primary recipients of tuition loans, only one-third of female students are enrolled in STEM disciplines. The Edulmkon Program, to be led by the Ministry of Economy and Finance, will address these challenges through a series of reforms. These include modernizing tuition loan management, improving inter-agency coordination, and launching a centralized digital platform to streamline loan processing and improve transparency. The program will also revise eligibility and subsidy criteria to better serve vulnerable students. A cornerstone of the reform is the introduction of an income-contingent loan system, where repayments are based on a graduate’s income. This approach is designed to protect low-income borrowers and those facing temporary unemployment after graduation. By the end of 2028, students are expected to access loans through 12 participating commercial banks operating in coordination with the Ministry. The World Bank also noted that the program aims to attract approximately $30 million in private capital, reducing fiscal pressure on the state while expanding access to education financing.