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Artificial Intelligence

Kazakhstan AI Infrastructure: Can It Become a Regional Hub?

Computing infrastructure for artificial intelligence has joined fossil fuel reserves and transport corridors on the list of the world's most valuable strategic assets. The United States, Gulf states, and China are investing tens of billions of dollars in vast data-center projects. Kazakhstan has also joined the race, developing computing capacity with an eye on neighboring markets. For a country traditionally associated with commodity exports, the idea may seem unexpected. Yet the modern AI economy requires vast computing resources, specialized processors, reliable data centers, and, above all, large amounts of electricity. The AI market is therefore creating revenue opportunities not only for those who develop models, but also for countries able to provide the conditions in which they operate. From Digitalization to Infrastructure In 2024, Kazakhstan ranked among the world’s top 25 countries for e-government development and was also among the 10 countries with the broadest public access to government services. The focus of state digital policy is now shifting. Kazakhstan has begun investing more in the infrastructure needed for artificial intelligence. In 2025, the state-owned Samruk-Kazyna fund and the UAE-based company Presight AI developed a national supercomputing cluster. The project placed Kazakhstan 86th in the global ranking of countries operating the world’s most powerful computing systems. This year, the government announced a partnership with NVIDIA and Firebird to develop high-performance computing infrastructure and build modern data centers. A national AI ecosystem is also being developed around Astana Hub, while telecommunications and cloud companies are expanding their own data-processing facilities. Digitalization in Kazakhstan was previously focused mainly on the delivery of public services. The country is now building infrastructure that can be used by research institutions, businesses, and government agencies. At sufficient scale, it could serve not only the domestic market but also users elsewhere in Central Asia. Factors Working in Kazakhstan’s Favor If Kazakhstan intends to enter the regional market, an obvious question arises: what can it offer data-center operators and cloud-service providers? The country’s relatively modest domestic market is not the decisive factor. For such projects, the cost and reliability of electricity, the quality of digital infrastructure, international connectivity, and conditions for long-term investment matter far more. Kazakhstan lies between Europe and Asia and is gradually becoming part of new transregional digital routes, including the Trans-Caspian fiber-optic link. For cloud-service providers, this could mean lower data-transfer latency and easier access to customers in several countries. The Astana International Financial Centre also offers foreign investors a legal framework based on English common law, reducing uncertainty for long-term infrastructure projects. Electricity prices are another important factor. They remain competitive compared with many neighboring countries, while energy is one of the largest operating costs for modern data centers. Kazakhstan’s geography, digital connectivity, investment framework, and energy resources together give it a chance to become a regional location for computing infrastructure. Not Algorithms but Megawatts Artificial intelligence is often associated with software, algorithms, and increasingly sophisticated language models. In reality, AI has become just as much an infrastructure business. Training and operating systems...

Railway Infrastructure

Kyrgyzstan Opens New Railway as Japarov Alleges North-South Highway Embezzlement

Kyrgyzstan has opened a 63-kilometer railway between Balykchy and Kochkor, completing the first stage of a domestic route intended to reach the Kara-Keche coalfield and eventually connect the country’s divided rail network. President Sadyr Japarov travelled to the new Kochkor station by train on July 25. The line extends rail service from the western edge of Lake Issyk-Kul into Naryn Region, where difficult mountain terrain has long limited transport links. “We have revived the culture of railway construction, our engineering potential, and professional experience,” Japarov said. “This historic achievement proves that our country can independently carry out large infrastructure projects.” For the first three decades after independence, Kyrgyzstan laid no new railway track. Construction of the planned 186-kilometer Balykchy-Kochkor-Kara-Keche line began in March 2022. Japarov said crews carried out about one million cubic meters of blasting work and cleared eight kilometers through mountainous ground. The route also crosses wetland and rocky areas near the Orto-Tokoy reservoir, existing roads, and utility lines. According to Japarov, construction of the track cost $955,000 per kilometer, which he compared with offers from foreign companies ranging from $4.8 million to $6.8 million per kilometer. “We understood that this was too expensive, so we decided to take the risk and do the work ourselves,” he said. The $955,000 figure appears to cover the track itself rather than the full cost of the line. In June 2025, Kyrgyz Temir Jolu estimated the 63-kilometer project at 9.472 billion som, or about $108 million at the official exchange rate, roughly $1.72 million per kilometer. Japarov’s speech did not set out what work was included in the foreign proposals. The state railway financed the first stage from its own resources. An October 2025 cabinet decree allows Kyrgyz Temir Jolu to retain half the net profit it would otherwise pay into the state budget from 2026 through 2030, which can be used to fund the route to Makmal and the company’s wider development. Turning to the alternative North-South highway between Balykchy and Jalal-Abad, Japarov said its projected cost was $2.5 million per kilometer and alleged that “more than half” of this sum had been embezzled. He did not identify any company, official, or investigation supporting the claim. Questions over the highway’s costs predate Japarov’s accusation. A January 2023 Audit Chamber review found overstated work on the Aral-Kazarman section and said credit savings had been redirected contrary to the loan agreement. Three months later, local outlets cited security-service sources saying the GKNB had opened a case into suspected $123 million price inflation on the same section. No public outcome has been announced. Construction of the 433-kilometer highway began in 2014 and has suffered repeated delays. The route opened for seasonal traffic from June to November 2026, but the Transport Ministry expects year-round operation only in 2028 after further safety work. The new railway gives Kochkor a direct connection to Kyrgyzstan’s northern rail system. It does not yet join the country’s northern and southern lines. Before the opening, Kyrgyzstan’s railway network covered 425...

EU Sanctions

EU Sanctions Kazakhstan Kyrgyzstan Firms in Latest Russia Package

The European Union has adopted its 21st sanctions package against Russia. The measures add two companies from Kazakhstan, three from Kyrgyzstan, a Kyrgyz bank, and cryptocurrency platforms registered in several jurisdictions to separate sanctions and export-control lists. Brussels said they were designed to disrupt financial and trade channels allegedly used to circumvent existing restrictions. The package imposes asset freezes and other restrictive measures on 48 people and 170 entities. A further 51 entities were added to a list subject to tighter export controls on dual-use goods and technologies. Some are based in Kazakhstan, Kyrgyzstan, China, India, Turkey, and the United Arab Emirates. According to the EU Council, the 51 entities were listed because they supported Russia’s military-industrial complex. The Council said those based outside the EU had also helped circumvent export restrictions, including those covering microelectronics, computer numerical control machine tools, and semiconductor-processing equipment. Three Bishkek-registered companies, Nova Proekt LLC, Rama Group LLC, and Shisan Ltd, were placed under the tighter export-control regime. Their inclusion means that EU exports of sensitive goods and technologies to the companies are permitted only in narrowly defined circumstances. The listing also restricts related technical and financial services, but does not automatically freeze the companies’ assets. The Council also imposed a transaction ban on EcoIslamicBank, saying it was connected to Russia’s System for Transfer of Financial Messages, or SPFS, which Moscow developed as an alternative to SWIFT. The ban, which applies to operators under EU jurisdiction, is due to take effect on August 13. The EU also extended its transaction ban to 14 cryptocurrency platforms based in Kyrgyzstan, Georgia, Panama, the UAE, the Marshall Islands, and Belarus. The two Kazakh companies placed under tighter export controls were TauKZ LLP and KBR-Technologies LLP. Both had previously been targeted by other Western governments: the United States sanctioned KBR-Technologies in June 2024, while the United Kingdom sanctioned TauKZ in November 2024. The measures continue a policy already reflected in earlier sanctions packages. In April, the EU used its anti-circumvention mechanism against Kyrgyzstan for the first time, banning EU exports of computer numerical control machine tools and radios to the country. Brussels said trade data showed a significant rise in the re-export of high-priority goods through Kyrgyzstan to Russia. On June 9, the EU held a sanctions seminar in Bishkek for banks, logistics operators, exporters, and virtual-asset businesses. The session covered financial restrictions, export controls, penalties, and how companies could comply with the rules. It took place less than two months after the EU first applied its anti-circumvention mechanism to Kyrgyzstan. As previously reported by The Times of Central Asia, Kyrgyz authorities have also ordered 50 companies to cease operations after state agencies identified them as presenting heightened sanctions risks. The government did not disclose their names, owners, or sectors.

Biopesticides

Kazakhstan and China to Jointly Develop Biopesticides

Kazakhstani and Chinese researchers have agreed to jointly develop biological crop protection products and prepare for their production in Kazakhstan. A memorandum of understanding was signed by the National Agrarian Research and Education Center, the Kazakh Research Institute of Plant Protection and Quarantine named after Zhazken Zhiembayev, and the Institute of Plant Protection, Chinese Academy of Agricultural Sciences (IPPCAAS). The agreement covers joint research and the development and testing of biopesticides. It also provides for technology exchange and specialist training, as well as the commercialization of research findings. The parties plan to establish local production of biological crop protection products in Kazakhstan. Kazakhstan’s Ministry of Agriculture said the project could increase the use of biological products and reduce the country’s dependence on imported crop protection supplies. The memorandum was signed during a visit by representatives of IPPCAAS, China Agricultural University, and Zhongbao. The visit included an international seminar on pest management. Researchers and specialists discussed integrated plant protection and biological pest control. They also considered phytosanitary monitoring and possible joint research projects. The Chinese delegation is expected to visit Kazakhstani research organizations and agricultural enterprises to examine local methods of monitoring major pests. The memorandum follows earlier cooperation between Kazakhstan and China in agricultural science. In recent years, the two countries have expanded joint work on plant protection and crop breeding. Cooperation has also covered food security and agricultural technologies. Interest in biological crop protection is growing elsewhere in Central Asia. A year earlier, Kyrgyzstan conducted nationwide trials of biological pesticides against locusts in an effort to reduce the use of chemical treatments and their environmental impact. Domestic production could reduce Kazakhstan’s import costs and give farmers easier access to new crop protection products. The practical impact will depend on whether the research and testing program leads to commercial-scale production.

Middle Corridor

Uzbekistan Seeks More Freight Capacity Through Kazakhstan’s Caspian Ports

Kazakhstan and Uzbekistan have instructed their national railway companies to draw up a plan to increase Uzbek freight shipments through the ports of Aktau and Kuryk, expanding Tashkent’s access to markets across the Caspian Sea. Kazakh Prime Minister Olzhas Bektenov and his Uzbek counterpart, Abdulla Aripov, discussed the plan during a July 23 visit to the Aktau International Sea Trade Port. The volume of Uzbek freight handled through Aktau and Kuryk increased by more than 60% in 2025, according to the Kazakh government. “Our task is to provide cargo from Central Asian countries with fast and reliable access to the markets of the Caucasus, Turkey, and Europe,” Bektenov said. Aktau and Kuryk are the main Kazakh ports on the Trans-Caspian International Transport Route, commonly known as the Middle Corridor. The rail-and-sea route links China and Europe through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and Turkey. For Uzbekistan, one of the world’s two double-landlocked countries, the Kazakh ports provide access to the western section of the corridor. Freight is carried by rail to the Caspian coast before being transferred to ships bound for Azerbaijan. The two governments did not say how much additional freight they expect to carry or when the railway companies must complete their plan. Further growth will depend on tariffs, the availability of railcars and vessels, border procedures, and the capacity of railway lines serving the ports. The combined infrastructure capacity of Aktau and Kuryk is about 22 million metric tons a year, according to Yelzhas Otynshiyev, chairman of Kazakhstan Temir Zholy, the state railway company. Aktau alone can handle as much as 12 million tons annually and operates throughout the year. Container transit through the Kazakh ports on the Middle Corridor increased 3.8-fold between 2022 and 2025, the government said. The first phase of a container hub with annual capacity of 140,000 twenty-foot equivalent units has opened at Aktau. A second phase, due in 2027-2028, is expected to lift capacity to 240,000 TEUs. Kazakhstan has also ordered six container vessels. Four are due for delivery in 2027 and two more in 2028. The additional ships are intended to reduce dependence on the limited pool of vessels operating on the Caspian Sea. Capacity constraints remain at the ports and on the rail network. Falling Caspian Sea levels have made it harder for fully loaded vessels to enter some harbors and increased the need for dredging. Kazakhstan completed dredging at Kuryk in 2025 and plans to finish similar work at Aktau by the end of 2026. The World Bank lists port capacity, rail access, and delays at the Kazakhstan-Uzbekistan border among the main bottlenecks affecting the Middle Corridor. Some freight operators use longer routes because existing border crossings and rail links cannot handle demand efficiently. The bank has also called for additional berths and modern cargo-handling equipment at Aktau as the Caspian becomes shallower. Kazakhstan is upgrading the Shalkar-Beineu and Beineu-Mangystau railway sections that carry traffic to Aktau and Kuryk. In February 2026, the World Bank approved an $846...

Kashagan

Kazakhstan’s $5 Billion Kashagan Fine Moves Into New Legal Phase

Kazakhstan has escalated its dispute with the foreign investors behind the Kashagan oil field, warning the consortium’s managing director that he could face administrative and criminal liability over its failure to pay an environmental fine of nearly $5 billion. The warning to Giancarlo Ruiu, managing director of North Caspian Operating Company, was reported by Reuters, which cited two sources and a document it had reviewed. NCOC’s shareholders include Eni, ExxonMobil, Shell, and TotalEnergies, each with a 16.81% stake; Kazakhstan’s state-owned KazMunayGas, with 16.88%; CNPC, with 8.33%; and Inpex, with 7.56%. The dispute began after the Department of Ecology for the Atyrau Region inspected the consortium’s production facilities in 2022 and identified about ten alleged violations. Inspectors said that by November 1, 2022, more than 1.7 million metric tons of sulfur had accumulated at a storage site within the Bolashak oil and gas processing complex. NCOC’s permit allowed it to store no more than 730,000 tons. According to the environmental authorities, the operator had exceeded the permitted limit by more than twofold. In early 2023, the regional environmental department issued a notification seeking 2.356 trillion tenge in penalties, equivalent to about $5.4 billion at the exchange rate at the time. NCOC rejected the allegations and maintained that its sulfur-handling operations complied with Kazakh law and the permits issued for the project. The proceedings continued for more than three years. In August 2025, a court set aside the original notification because of procedural deficiencies in the way it had been issued. The ruling did not dismiss the environmental allegations themselves. The authorities subsequently issued a new notification, allowing the case to proceed. After further domestic proceedings, the Atyrau Regional Court upheld the penalty on June 19, allowing the ruling to enter into force. It later emerged that members of the consortium had been aware of the risk posed by the growing sulfur stockpiles for years. In 2017, Eni warned that the project was heading towards exceeding the permitted storage capacity. By late 2020, NCOC had also cautioned that Kazakhstan’s new Environmental Code, adopted the following year, would increase the risk of substantial penalties. According to internal documents reported by Bloomberg, Eni executives proposed processing more of the sulfur for sale on international markets. ExxonMobil, TotalEnergies, CNPC, and Inpex were not planning comparable measures at the time, while KazMunayGas had yet to settle on a position. On July 14, Kazakhstan’s Ministry of Justice said the domestic court ruling had entered into force and gave NCOC until July 20 to pay voluntarily. The ministry said compulsory enforcement proceedings could begin if the consortium failed to meet the deadline. NCOC did not pay by July 20. The Justice Ministry subsequently warned Ruiu of possible liability for non-compliance, marking a further escalation in a dispute that had already moved beyond the original question of sulfur storage. The consortium continued to deny wrongdoing and maintained that the penalty could not be enforced while international arbitration proceedings were under way. Its foreign shareholders are separately challenging the fine...