Kazakhstan Business & Economy - The Times Of Central Asia

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Kazakhstan Unveils Central Asia’s Most Powerful Supercomputer

Kazakhstan has taken a major step in its digital transformation with the arrival of the most powerful supercomputer in Central Asia. The system, boasting a performance of approximately 2 exaflops, was delivered as part of a strategic agreement between the Ministry of Digital Development, Innovation, and Aerospace Industry (MDDIA) and Presight AI Ltd, an ADX-listed public limited company whose majority shareholder is Abu Dhabi company G42. This milestone follows an agreement signed in February 2024 to construct a supercomputer and a dedicated data center. The latest development includes the creation of a full-scale supercomputing cluster that will be installed in a state-of-the-art Tier III data center. The facility ensures high availability through dual data redundancy, independent power supplies, and the capability to upgrade equipment without interrupting operations. The new supercomputer is powered by the latest NVIDIA H200 graphics chips, optimized for artificial intelligence and high-performance computing. With a capacity of 2 exaflops, equivalent to a billion billion (10¹⁸) floating point operations per second, the system is expected to significantly bolster Kazakhstan’s digital infrastructure and AI capabilities. According to the MDDIA, the supercomputer is intended to benefit a wide range of users, not just a narrow group of specialists. “The supercomputer’s resources will be accessible to all: startups developing neural networks, universities conducting fundamental and applied research, scientific institutions, and businesses integrating AI into their operations,” the ministry stated. The project aligns with Kazakhstan’s broader digital strategy and its ambitions to become a regional technology hub. It also reflects deepening economic ties with the United Arab Emirates. As previously reported by The Times of Central Asia, during the official visit of Crown Prince Sheikh Khalid bin Mohammed bin Zayed Al Nahyan to Kazakhstan, the two countries signed over 20 commercial agreements worth approximately US$5 billion.

Environment Kazakhstan Environment Kazakhstan Kazakhstan Business & Economy

Kazakhstan and World Bank Launch Second Phase to Revive Northern Aral Sea

In partnership with the World Bank, the Ministry of Water Resources and Irrigation of Kazakhstan has launched the second phase of a long-term initiative to restore the Northern Aral Sea. This stage aims to revive the region’s ecosystem and enhance the quality of life for local communities. Feasibility Study Underway Key objectives of this phase include reconstructing the Kokaral Dam and raising the sea level to 44 meters, measured using the Baltic height system. Plans also call for constructing a water control facility near the village of Amanotkel, designed to regulate water distribution within the Akshatau and Kamystybas lake systems in Kyzylorda Region’s Aral District. A technical feasibility study is expected to be completed by December 2025. Once implemented, these measures are projected to expand the Northern Aral Sea’s surface area to 3,913 square kilometers, increasing its total water volume to 34 cubic kilometers. The full refill process is anticipated to take four to five years, based on hydrological data from the Syr Darya River basin covering the period 1913-2019. Strategic Decisions on Dam Reconstruction The current conservation strategy was finalized following consultations with local authorities and water management experts. Minister of Water Resources and Irrigation Nurzhan Nurzhigitov stated that the plan reflects the region’s actual hydrological conditions and was selected for its balance of timeliness and efficacy. “We evaluated multiple implementation options. Discussions with residents and industry veterans helped guide our decision. The final plan was deemed optimal after all relevant factors were considered,” Nurzhigitov said. Sameh Wahba, the World Bank’s Regional Director for Europe and Central Asia, underscored the project’s ecological and economic significance. He confirmed that the World Bank not only funded the feasibility study but remains committed to supporting the project through its next stages. According to Wahba, the initiative is expected to create jobs and stimulate sectors such as fisheries, agriculture, and tourism. Progress Achieved in the First Phase The first phase of the rescue effort has already delivered tangible benefits. Water volume in the Northern Aral Sea has risen by 42%, reaching 27 billion cubic meters, while salinity has dropped nearly fourfold. Annual fish yields have climbed to 8,000 tons. In 2024 alone, a record 2.6 billion cubic meters of water were channeled into the sea, with 1 billion cubic meters allocated for irrigation. Beyond water volume and quality, the project aims to revitalize the Syr Darya River delta, curb salt deposition, and bolster the fishing industry. Employment opportunities and improved living conditions for local populations are also key targets. Long-Term Threats to Water Security The sustainability of these efforts may be challenged by regional developments. During the international conference “Water Security and Transboundary Water Use: Challenges and Solutions” in Astana, Kazakhstan’s Deputy Minister of Water Resources and Irrigation, Aslan Abdraimov, warned of the potential impact of Afghanistan’s Kosh-Tepa Canal on Central Asian water systems. Despite the absence of a direct border between Kazakhstan and Afghanistan, Abdraimov stated that the canal could eventually reduce the flow of the Syr Darya River. “No sharp fluctuations...

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Kazakhstan’s Crypto Aspirations Face a Power Problem

Kazakhstan’s First Deputy Minister of Digital Development, Innovation, and Aerospace Industry, Kanysh Tuleushin, believes that state-regulated cryptocurrency mining could generate substantial revenue and help modernize the country's energy infrastructure. Tuleushin argues that Kazakhstan has the potential to become Central Asia’s leading blockchain hub. However, this vision clashes with the country’s ongoing energy crisis, which continues to impact households and businesses. Optimistic Vision In an article published in the state newspaper Kazakhstanskaya Pravda, Tuleushin outlined how mining operations could contribute to the development of Kazakhstan’s power generation capabilities. He emphasized the use of associated petroleum gas (APG) to produce electricity for mining, which he claims would reduce carbon emissions and boost oil sector profits. “Miners can help modernize the power grid. In the U.S., they participate in grid balancing by consuming excess energy during low-demand periods. Kazakhstan already has a ‘70⁄30’ initiative, where foreign investors upgrade thermal power plants, allocating 70% of new capacity to the general grid and 30% to miners,” Tuleushin wrote. Tuleushin reported that cryptocurrency mining has brought 17.7 billion tenge to the national budget over the past three years. Meanwhile, trading volume on the Astana International Financial Center (AIFC) exchanges increased from $324.2 million in 2023 to $1.4 billion in 2024. From January 1, 2025, miners will be required to sell 75% of their assets through the AIFC. Despite a generally cautious regulatory stance, Kazakhstan permits digital asset trading within the AIFC. Digital assets are categorized as secured (linked to physical assets) or unsecured (such as Bitcoin and Ethereum). In 2023, digital asset transactions in Kazakhstan reached $4.1 billion, but 91.5% occurred in the “gray zone,” beyond state oversight. In 2024 alone, the Financial Monitoring Agency shut down 36 illegal crypto exchanges, froze $4.8 million in assets, and blocked over 3,500 illicit platforms. Tuleushin argues that fully legalizing and regulating these operations could add more than 190 billion tenge annually to the budget, enough to fund major public infrastructure such as schools and hospitals. He proposes extending crypto trading beyond the AIFC, authorizing crypto ATMs, and opening the market to major players, an approach akin to that of the UAE. Tuleushin also claimed that regions like Pavlodar and Karaganda have electricity surpluses and that Kazakhstan's cold climate further lowers operational costs for miners. Unchecked Consumption and Mounting Strain Despite the deputy minister's optimism, Kazakhstan’s Supreme Audit Chamber (SAC) has raised alarms over uncontrolled energy consumption by miners. According to a 2024 audit, miners consumed 901 million kWh worth 13 billion tenge, despite a national energy shortage, by bypassing RFZ LLP, the country’s sole energy purchaser. Former Prime Minister and current head of the Supreme Audit Chamber, Alikhan Smailov, warned, “Miners are consuming up to a billion kilowatt-hours. This is damaging our economy. How can we allow unchecked consumption amid such a crisis?” The audit revealed systemic issues, including deteriorating Soviet-era power plants (55% average wear), a 4,500-worker shortfall in the energy sector, and a lack of financial oversight by the Ministry of Energy. Looming Crisis In January...

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Kazakhstan Expands Role as Key Transit Hub for Chinese Exports to Europe

The inaugural Kazakhstan-China Transport Forum, held in Astana on May 15, unveiled a series of initiatives aimed at solidifying Kazakhstan’s position as a major transport and logistics hub for Chinese exports to Russia and Europe. At the forum, Kazakhstan’s Minister of Transport Marat Karabayev and China’s Minister of Transport Liu Wei discussed the development of a new multimodal transit corridor linking Russia, Kazakhstan, and China. The route will utilize the transboundary Irtysh River, as well as the Ili River, establishing a navigable link from the Kazakh city of Kunayev to Yining in China’s Xinjiang region. Key infrastructure plans include the construction of a new cross-border bridge at the Maykapshagay-Zimunay checkpoint to accommodate heavy trucks and the opening of a third international air corridor between the two countries. The ministers also discussed establishing two new road checkpoints to better connect East Kazakhstan and the Almaty regions with China. By the end of 2025, Kazakhstan aims to complete two major rail infrastructure projects: the second track on the Dostyk-Moiynty railway and a bypass line around Almaty station. These upgrades are expected to significantly boost freight capacity and cut cargo transit times between China and Europe via Kazakhstan. Additional developments include the launch of a direct passenger train between Almaty and Xi'an and an expansion of flight services between the two nations to 65 per week. Meanwhile, construction is underway on a new container hub at the Caspian Sea port of Aktau, a joint venture with a Chinese company. Scheduled for completion by year’s end, the facility will expand the port’s annual capacity from 140,000 to 240,000 TEUs. Kazakhstan’s Ministry of Transport reports that in the first quarter of 2025, road freight volumes between Kazakhstan and China surged by 82%, reaching 822,000 tons. Rail freight volumes grew by 13% over the first four months of the year, totaling 11.4 million tons. These developments highlight Kazakhstan’s growing strategic importance in transcontinental logistics, as China continues to diversify its export routes westward.

Central Asia Business & Economy Kazakhstan Kazakhstan Business & Economy

Kazakhstan to Expand Geological Exploration Area by One-Third by 2026

Kazakhstan plans to increase its geological exploration area by one-third by early 2026, according to Margulan Baibatyrov, Deputy Chairman of the Geology Committee under the Ministry of Industry and Construction. Baibatyrov made the announcement during an international mining congress. President Kassym-Jomart Tokayev previously highlighted this initiative at the October 2024 meeting of the Foreign Investors Council, noting that geological exploration currently covers approximately 1.6 million square kilometers. He instructed that this figure be expanded to 2.2 million square kilometers. “By 2026, we plan to increase the area of geological exploration by 680,000 square kilometers,” Baibatyrov confirmed. Investment and Resource Development Over the past five years, the mining industry in Kazakhstan has attracted around $1 billion in private investment. Of this, KZT 41 billion ($80.3 million) has come from major international companies specifically for geological exploration. Since 2018, Kazakhstan has issued 2,906 exploration licenses and 111 production licenses. The country's mineral resource base includes more than 980 solid mineral deposits. Exploration activities are ongoing at 12 sites, with notable recent discoveries such as the Kuyrektykol deposit, which contains approximately 800,000 tons of rare earth metals. Sector Challenges Despite these advancements, Baibatyrov noted several persistent challenges in the geological exploration sector, including: A shortage of qualified scientific personnel; Low levels of natural resource replenishment; Insufficient public funding for geological studies. Upcoming Auctions As previously reported by The Times of Central Asia, Kazakhstan plans to auction exploration and development rights for 50 gold and rare metal deposits in June 2025. This move aims to attract further investment and strengthen the country’s mineral resource base.

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EBRD Downgrades Kazakhstan’s 2025 GDP Forecast

The European Bank for Reconstruction and Development (EBRD) has revised its 2025 GDP growth forecast for Kazakhstan downward, from 5.2% to 4.9%. The adjustment was published in the bank’s May regional economic outlook. According to the EBRD, the downward revision is largely due to Kazakhstan’s GDP growth in the first quarter being driven primarily by higher oil output at the Tengiz field. While this expansion has supported short-term growth, the bank questions the sustainability of oil production as a long-term driver, particularly under current OPEC+ production limits. Oil Output and Constraints Tengizchevroil (TCO), the operator of the country’s largest oil field, increased daily production at Tengiz to a record 870,000 barrels in January 2025, up 45% from the 2024 average. Output climbed further to 950,000 barrels in March, before dipping slightly to an average of 884,000 barrels per day in early April. Industry projections suggest production may eventually reach one million barrels per day. However, the EBRD cautions that such gains may be constrained by Kazakhstan’s obligations under the OPEC+ agreement. In addition to concerns about oil production, the bank notes the risk of declining demand for Kazakh oil and metals, key exports, especially from China, one of Kazakhstan’s main trading partners. Inflation and Domestic Demand Rising inflation presents another significant challenge. Consumer prices rose 8.9% in January, 9.4% in February, and hit 10% in March, the highest level since November 2023. In April, inflation climbed further to 10.7%, raising concerns about the erosion of domestic purchasing power. Broader Economic Indicators Despite the EBRD’s revised forecast, the Ministry of National Economy reported on May 12 that Kazakhstan’s GDP grew by 6% in the first four months of 2025. For the January-March period, growth was recorded at 5.8%, supported by a range of sectors: transport (22.4%), trade (7%), agriculture (3.9%), and communications (2.6%). Growth in the transport sector was driven by an increase in freight volumes via rail and pipeline, accounting for 20.5% and 19.6% of sectoral output, respectively. Wholesale trade expanded by 7.4%, and retail trade by 6.1%. Outlook As previously reported by The Times of Central Asia, several analysts view ongoing volatility in global markets as indicative of a looming “perfect storm” for Kazakhstan’s economy. This sentiment is echoed in the EBRD’s cautious outlook, highlighting a convergence of external and internal pressures on the country's economic stability.