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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,...

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.

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.

Foreign Debt

Opinion: Is Uzbekistan Importing a Future Crisis?

Once hidden from the view of international investors, Uzbekistan is rapidly rewriting its economic narrative. Over the past eight years, the nation attracted over $113 billion in foreign investment, drawing financial firms and mutual funds eager to seize the momentum of Tashkent’s trade liberalization and its ambition to double GDP by 2030. And rightly so; 40% of the country’s population, which is the largest in Central Asia, is under the age of 25, while its gold production is within the top ten globally. Uzbekistan is in its breakout moment. With Uzbek bonds receiving a further upgrade to a BB rating from both Fitch and S&P Global, comparisons to Vietnam or Indonesia no longer seem aspirational. However, the question remains: Is Uzbekistan ready to set foot on the financial global stage, and, more importantly, is it structurally equipped to stay there? Amidst its sweeping economic transformation, IMF officials have warned the administration to remain vigilant against economic shocks beyond its control: volatile commodity prices, contractions in foreign investor liquidity, and consequently, tighter external financing. These warnings are not theoretical. They come from decades of IMF experience with financial crises in other emerging markets, such as the Latin American debt crises in the 1980s, the “Tequila Crisis” in 1994, and the “Asian Flu” in 1997. In those historic cases, newly liberalized economies suffered not because they lacked growth, but because they lacked a defense against the liquidity cycle. The economic reality is that global capital flows are often driven by decisions made in New York or London, not Tashkent. This economic phenomenon is often explained by the “liquidity model,” which argues that changes in exogenous liquidity conditions - driven by the economic situation of investor countries - shape capital flows into emerging markets. Thus, without sufficient financial market depth, emerging capital markets cannot absorb external shocks. And when global liquidity tightens, these flows can abruptly reverse, resulting in prolonged economic instability and loss of monetary sovereignty. The sequence unfolds as follows: capital inflows surge and balance-sheet vulnerabilities quietly build up; then an external shock - such as a monetary tightening in the creditor economy - causes inflows to slow; the local currency depreciates; and a feedback spiral of declining confidence and weakening balance sheets pushes the economy into crisis. Currency loses trust, struggles to recover, and money flees. Some initial signs of this pattern can be observed in Uzbekistan’s current boom. The economy is increasingly reliant on foreign borrowing: external debt as a share of GDP rose from 24.7% in 2017 to 61.4% in 2024, reaching $78.5 billion by June 2025. According to CEIC benchmarks, this level is already comparable to Poland’s 51.8% and Malaysia’s 69.9%, and now exceeds Kazakhstan’s 59.2%, reflecting growing dependence on financing from the World Bank, Eurobond investors, and major East Asian institutions. High debt levels alone do not necessarily imply instability. They can reflect efforts to accelerate domestic development. The real source of fragility in past crises was not the volume of debt but its denomination. When...

Organization of Turkic States (OTS)

Organization of Turkic States Discusses Key Eurasian Energy Projects

At the 5th meeting of ministers responsible for energy within the Organization of Turkic States (OTS), held on December 10 in Istanbul, OTS Secretary General Kubanychbek Omuraliev outlined major joint energy initiatives underway among member states. Founded in 2009, the OTS comprises Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, Uzbekistan, and Turkmenistan. Hungary and Northern Cyprus participate as observer states. Omuraliev touched upon the following projects: Major oil and gas routes such as the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, Baku-Tbilisi-Erzurum (BTE) gas pipeline, South Caucasus Pipeline, Trans-Anatolian Natural Gas Pipeline (TANAP), Trans Adriatic Pipeline (TAP), and the Iğdır-Nakhchivan gas pipeline; A strategic partnership between Azerbaijan, Kazakhstan, and Uzbekistan to develop and transmit green energy; The Azerbaijan-Georgia-Turkey-Bulgaria Green Energy Corridor, which extends the Central Asia-Azerbaijan corridor and opens new avenues for energy exports to Europe; Construction of the Kambarata-1 Hydropower Plant in Kyrgyzstan, a project jointly developed with Kazakhstan and Uzbekistan; and A planned Black Sea submarine cable to transmit renewable energy. Omuraliev emphasized that enhanced intra-OTS cooperation bolsters both the economic potential of member states and regional energy security. Ministers at the meeting noted the significant fossil fuel and clean energy resources held by OTS members and observers, describing the region as a strategic energy bridge between Asia and Europe. They stressed that advancing practical cooperation is essential amid growing global energy demand and the accelerating energy transition. Participants agreed to move forward with joint projects under the OTS framework, including the establishment of a Regional Center for Technologies and Green Initiatives. As previously reported by The Times of Central Asia, on December 5, the Board of Governors of the Turkic Investment Fund announced in Bishkek that the fund will begin operations in the first quarter of 2026. The Turkic Investment Fund is the first dedicated financial institution jointly established by OTS member states. Headquartered in Istanbul, its mandate is to promote economic cooperation, boost intra-regional trade, and support sustainable development by financing major joint initiatives across the region.