Kazakhstan Business & Economy - The Times Of Central Asia

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Alatau City

Kazakhstan Plans to Power New Alatau City With Gas and Renewable Energy

Kazakhstan plans to power the future megacity of Alatau City near Almaty through a combination of gas-fired generation and renewable sources, as authorities seek to address chronic electricity shortages in the country’s south while creating a low-carbon “smart city” model. Deputy Prime Minister Kanat Bozumbayev outlined the government’s energy strategy for the project during a briefing in Astana. According to him, Alatau City’s population could reach between 2.8 million and 3 million people by 2050, roughly equivalent to the current population of Almaty. “We expect that Alatau City will rely primarily on gas generation, given the area’s relatively low population density, along with renewable energy facilities,” Bozumbayev said. The new city is being developed on the site of the village of Zhetygen, approximately 50 kilometers from Almaty. The project will also encompass the settlements of Enbek, Zhanaarna and Kuigan, as well as parts of Konaev and the Talgar district in the Almaty Region. Authorities envision Alatau City as a future hub for technology companies, logistics and export-oriented industry. Under the current concept, the city will be divided into four functional districts: the financial and business-oriented Gate District, the educational and medical Golden District, the industrial Growing District, and the entertainment-focused Green District. The government expects rapid growth in both population and industrial activity to drive a sharp increase in electricity consumption. According to official estimates, electricity demand in Alatau City could reach 1.45 gigawatts by 2030 and rise further to 1.7 gigawatts by 2040. For comparison, Almaty’s electricity consumption in 2024 stood at approximately 982 megawatts. During the initial phase over the next three years, the city is expected to require around 50-100 megawatts of electricity. However, once industrial facilities become operational, demand could rise to between 500 and 1,000 megawatts, Bozumbayev said. Authorities have already prepared an infrastructure plan that includes the construction of transmission lines, substations, and new generating facilities. The government’s emphasis on gas-fired power generation is aimed at reducing southern Kazakhstan’s dependence on electricity transfers from northern Kazakhstan and neighboring countries. According to Bozumbayev, the launch of new power plants in Kyzylorda, Turkestan, and other southern regions should eventually create an electricity surplus in southern Kazakhstan, which currently remains energy deficient. The development of Alatau City is also part of Kazakhstan’s effort to modernize its power system and gradually increase the share of renewable energy in the national mix. In recent years, the country has expanded solar and wind power projects while remaining heavily dependent on coal-fired generation. Alongside energy infrastructure, authorities are promoting Alatau City as a testing ground for advanced transportation technologies. Bozumbayev said preliminary estimates suggest that air taxi rides in the city could cost around $1 per kilometer. “As competition develops in the market, prices could decrease,” the deputy prime minister said. He added that the testing of the air taxi system is expected to be completed by 2026, with commercial services potentially launching in 2027. However, Almaty Region Governor Marat Sultangaziev previously stated that full commercial operation of air taxi services...

TCA Interviews

Interview: Kazakhstan Pushes Middle Corridor as Global Trade Routes Shift

As war, sanctions, and disruption reshape trade between Europe and Asia, Kazakhstan is trying to turn the Middle Corridor from an alternative route into a more predictable logistics system. The route, formally known as the Trans-Caspian International Transport Route, links China and Central Asia with the Caspian Sea, the South Caucasus, Turkey, and Europe, bypassing Russia. For Kazakhstan, the project is both economic and geopolitical. It promises faster access to foreign markets, new transit revenue, and a stronger role for the country as a logistics hub between China and Europe. However, the corridor still faces practical constraints, including port capacity on the Caspian Sea, uneven digital systems, border procedures, tariffs, and coordination between several states and operators. The Times of Central Asia spoke with Alua Korpebayeva, Head of the Project Office for Transport and Logistics under the Presidential Administration of Kazakhstan, about what still needs to change and how Kazakhstan views the corridor’s long-term role. TCA: Why has the Middle Corridor become more urgent for Kazakhstan and Central Asia, and how much have the war in Ukraine and tensions around Iran and the Persian Gulf changed the calculation? Alua Korpebayeva: The government of Kazakhstan has assigned the national railway company, Kazakhstan Temir Zholy, a strategic objective of increasing total transit volumes to 55 million tons by 2026, representing a 65% increase compared to last year. This target reflects the scale of the country’s ongoing transport transformation. Achieving this goal is closely tied to the development of the Middle Corridor. The route is especially important because it is becoming a foundation for stable and predictable supply chains in global trade. The Middle Corridor provides Central Asian countries with an opportunity to strengthen connectivity with both Europe and China while increasing the region’s role as an independent transport and logistics hub. Geopolitical factors have undoubtedly increased business interest in alternative routes. For Kazakhstan, however, development of the Middle Corridor is primarily part of a broader effort to expand transport capacity and improve logistical resilience. That is precisely why deeper regional cooperation is so important. Unlocking the corridor’s full potential requires close coordination among all participants, from infrastructure modernization and tariff harmonization to end-to-end digitalization and simplified customs procedures. The World Bank has noted that a fully functioning Middle Corridor could strengthen supply-chain resilience and, if accompanied by investment and efficiency measures, could triple freight volumes and cut transportation times in half by 2030. TCA: Are Kazakhstan and its partners moving toward unified transit rules and tariffs along the corridor? What has already been agreed, and where do gaps remain? Alua Korpebayeva: Work on creating unified transit rules and coordinated tariff policies is ongoing. The current focus is shifting from fragmented national tariffs toward a unified through-route pricing system across the corridor. Within the framework of the Action Plan for Eliminating Bottlenecks along the Trans-Caspian International Transport Route, signed by the railway administrations of Kazakhstan, Azerbaijan and Georgia, the parties agreed to establish a single long-term tariff for the route. In practical terms,...

GDP

Why Kazakhstan Is Moving Ahead in GDP Per Capita

The International Monetary Fund has projected Kazakhstan to reach roughly $23,170 in nominal GDP per capita by 2031. On the same current-dollar measure, it is projected to pass China around 2026 and Russia by 2031. The comparison is a milestone, but it requires perspective. It is neither a purchasing-power verdict nor a comprehensive measure of household welfare. It nevertheless marks Kazakhstan’s entry into a higher income band. The question is how a state that began independence amid post-Soviet economic disruption reached this stage. How Kazakhstan Reached This Point Kazakhstan’s present position rests on a three-decade progression of state capacity, resource development, and institutional learning. When the Soviet Union collapsed, the country did not inherit a working growth model. It inherited broken production chains, institutional rupture, and inflation. It therefore faced the task of building a market economy out of an administrative-command system. In current U.S. dollars, GDP per capita stood near $1,400 in 1991, and exceeded $14,000 by 2024; in constant-dollar terms, the gain was smaller but still substantial. Hydrocarbons supplied the base, but political institutions and leadership acumen determined how much of that base could survive volatility. The path since 1991 has not been smooth. The 1990s brought collapse and stabilization. The 2000s brought hydrocarbon acceleration, foreign direct investment, and a rise in nominal GDP per capita climbing from a little more than $1,000 in 2000 to more than $8,000 in 2008. The global financial crisis interrupted the rise without destroying the model. The early 2010s brought recovery. The 2014–2016 oil-price and exchange-rate shock then tested the foundations already built, as the current-dollar figure fell sharply while real output per person proved more stable. COVID imposed another interruption. The post-2020 rebound belongs to that sequence. The Tokayev agenda belongs to this third stage of institutional learning. It did not create the GDP per capita trajectory over three decades, but today the issue has shifted from accumulation to stewardship. The inherited growth model had to be made more competitive, more rules-based, more socially visible, and more sustainable. Since 2022, the government has treated de-monopolization, asset recovery, social investment, and private-sector development as connected elements of the same governing effort. The IMF’s latest assessment shows the pressure inside that effort: growth remains strong, supported by oil output and non-oil activity, while fiscal, inflationary, and quasi-state-sector pressures still require correction. The Reform Program and Its Results Decree No. 542, signed in May 2024, set out measures to liberalize the economy, limit expansion of the quasi-state sector, revise privatization criteria, strengthen competition, and improve conditions for entrepreneurship. Its operative terms are competition, privatization, reduced state participation, and lower business costs. The decree temporarily halts the creation of new quasi-state entities and provides for an audit of state and quasi-state assets, partly to identify candidates for privatization. It also incorporates reforms affecting procurement and business regulation. The decree seeks to bend Kazakhstan’s accumulated macroeconomic trajectory toward commercial governance. The challenge is not to remove state capacity but to prevent it from crowding out private...

Trade and Logistics

Kazakhstan Proposes Kenyan Trade Hub to Access Eurasian Markets

Kazakhstan has proposed establishing a Kenyan trade and logistics hub on its territory to facilitate the export of Kenyan goods to Eurasian markets, as Astana seeks to position itself as a key transit link between Asia, Europe, and Africa. The initiative was announced by President Kassym-Jomart Tokayev of Kazakhstan during the Kazakhstan-Kenya Business Forum, held as part of Kenya’s President William Ruto’s state visit to Astana. “We are committed to opening a Kenyan trade hub in Kazakhstan that will provide your businesses with direct access to the entire Eurasian region,” Tokayev told representatives of the Kenyan business community. Kazakhstan hopes to expand exports of grain and other agricultural products to Africa, while Kenya could increase supplies of tea, coffee, and flowers to Central Asian and broader Eurasian markets. Astana is also promoting itself as an important part of international transport corridors. According to Tokayev, approximately 85% of overland transit traffic between China and Europe passes through Kazakhstan. The country is actively developing the Trans-Caspian International Transport Route, commonly known as the Middle Corridor, which is increasingly viewed as an alternative to traditional transit routes through Russia. Tokayev proposed integrating the Middle Corridor with East African maritime routes by using the potential of China’s Belt and Road Initiative. Kazakhstan specifically expressed interest in cooperation with the ports of Mombasa and Lamu, which are regarded as the region’s largest logistics hubs. “It is necessary to connect the Middle Corridor with Africa’s vital maritime arteries,” Tokayev said. The two sides also discussed the development of direct cargo air links between Kazakhstan and Kenya, as well as the possibility of launching direct passenger flights between Astana and Nairobi in the future. Beyond logistics, Kazakhstan and Kenya plan to expand cooperation in the extraction of rare earth metals and critical minerals, resources in growing global demand amid the energy transition and the expansion of digital technologies. During the forum, Kazakhstan’s sovereign wealth fund, Samruk-Kazyna, and Kenya’s National Mining Corporation signed an agreement on joint geological exploration and subsoil development projects in Kenya. Tokayev also proposed establishing a Kazakhstan-Kenya Business Council and a specialized expert group focused on transport and logistics infrastructure development. According to the president, these steps should accelerate the creation of an intergovernmental commission on trade and economic cooperation. Ruto said Nairobi was interested in creating a “new economic bridge” between Central Asia and Africa. “The logistics ports of Mombasa and Lamu will be available to companies from Kazakhstan interested in entering East African markets,” Ruto said. The visit comes as Kazakhstan seeks to diversify its trade routes and expand economic ties with countries of the Global South. Earlier, authorities in Kazakhstan announced plans to expand the country’s maritime fleet on the Caspian Sea to increase the capacity of the Middle Corridor.

Opinion: How AI Is Reshaping the Global Image of Nations

Artificial intelligence is rapidly becoming one of the most powerful geopolitical and economic forces in the world. It is changing how countries compete, build influence, and attract investment. Until recently, discussions about Central Asia’s economic development were dominated by infrastructure, energy, logistics, and natural resources. Today, a new layer of competition is emerging: digital influence shaped by AI systems. According to McKinsey, AI could contribute up to $13 trillion to the global economy by 2030. For Central Asia and Kazakhstan, AI development is no longer just a digital transformation agenda; it is directly tied to technological sovereignty, economic resilience, and long-term competitiveness. Who Shapes a Country’s Image in the Age of AI? Digital influence is increasingly determined by how artificial intelligence systems interpret and represent countries. Consider a Singaporean investor asking Gemini about emerging technology markets in Central Asia. A European procurement manager using ChatGPT to identify logistics partners in the region. A journalist turning to Perplexity for insights on Kazakhstan’s fintech ecosystem before writing a report. In each case, AI generates answers based on the data it has been trained on and can access. This creates a new geopolitical reality: those who shape data and content structure ultimately shape how countries are represented globally. Generative AI is already used at a massive scale, with ChatGPT surpassing 900 million weekly active users as of early 2026. As these systems become default information interfaces, the visibility of countries within AI-generated responses is becoming increasingly important. When high-quality, structured, and authoritative content is missing, AI systems rely on outdated information, fragmented sources, and external narratives. In practice, this means that a lack of structured digital presence can directly influence international perception. How Other Countries Are Responding Several countries have already recognized this shift and are actively responding. According to Axios, Israel paid Brad Parscale’s firm $9 million as part of a campaign aimed at shaping how AI platforms portray the country. The United Arab Emirates and Saudi Arabia are investing heavily in AI infrastructure and Arabic-language models, including Gulf-backed data centers, sovereign AI initiatives, and Arabic-first large language models. These efforts go beyond technology development. They represent a broader competition for influence in an information environment where AI-generated responses increasingly shape global understanding. AI Momentum in Kazakhstan In 2025, Kazakhstan was listed among the region’s strongest performers in the Government AI Readiness Index published by Oxford Insights. Kazakh officials cited a ranking of 60th out of 195 countries, while Oxford Insights published a regional report that placed Kazakhstan 58th globally. In either case, it was the highest-ranked of the five Central Asian states and represented a sharp improvement from the previous year. Over the past two years, Kazakhstan has demonstrated rapid progress in artificial intelligence. Venture investment in AI has increased more than fivefold, from $14 million to $73 million. IT service exports surpassed $1 billion in 2025, with later ministry figures putting the total at about $1.14 billion. The Kazakh-linked AI startup Higgsfield AI has also been widely described as Kazakhstan’s...

Air Taxi

Air Taxi Service in Kazakhstan Unlikely to Launch Commercially Before 2029

An air taxi service being developed in Kazakhstan’s Almaty Region is unlikely to begin full commercial operations before 2029, Almaty Region Governor Marat Sultangaziev said during test flights of the new transport system in Alatau, a newly established “city of the future” near Almaty. On May 19, Alatau hosted Central Asia’s first public launch of an electric vertical takeoff and landing (eVTOL) aircraft, marking the debut of air taxi technology in the region. Developers say the electric air taxi is expected to help reduce traffic congestion, connect tourist destinations, and shorten travel times. The aircraft can reach speeds of up to 200 kilometers per hour and travel distances of up to 200 kilometers on a single charge. Equipped with 13 electric motors, the air taxi is designed to carry one pilot and five passengers. In accordance with safety requirements, the first demonstration flight was conducted without passengers, the press service of the Almaty regional administration reported. Almaty Region Governor Marat Sultangaziev, who attended the launch event, described the initiative as strategically important for Kazakhstan’s transport sector. At the same time, he said the project would require infrastructure development and a comprehensive legal framework before commercial operations could begin. “Project initiators are now working on that process, and we will support them where necessary. They plan to transition from test operations to industrial-scale implementation around 2029. This initiative fully aligns with the concept of developing Alatau as a center for innovation and digitalization,” Sultangaziev said. Alisher Abdykadyrov, CEO of the Alatau City Authority state fund, said specially equipped vertiports would be used for eVTOL takeoffs and landings. The facilities would include charging and navigation systems and could be integrated into urban environments, including rooftops, transport hubs, and business districts. Construction of the first vertiport in Alatau has already begun, Abdykadyrov said, with additional facilities planned for Almaty and tourist destinations across the Almaty Region. The future network is expected to connect key transport hubs throughout the region. “Today we are witnessing a historic moment for Kazakhstan,” Abdykadyrov said. “This is not simply a demonstration of a new technology, but the beginning of a new phase in the city’s development based on innovation and digital technologies. Alatau is envisioned as a city of the future, which makes it especially symbolic that the development of air mobility and a new industry begins here.” “Our goal is not only to introduce the technology itself, but to build a complete ecosystem around it, creating infrastructure, developing engineering expertise, and generating new jobs,” he added. Regarding the legal regulation of the new mode of transport, Daniyar Uteulin, project manager at Alatau Advanced Air Group (AAAG), said the first package of regulatory proposals has already been prepared and submitted to the government for consideration. According to Uteulin, the draft regulations are based on the experience of countries where urban air mobility technologies are already developing rapidly, including the United States, China, South Korea, and several Middle Eastern countries. Kazakhstan is expected to designate a separate flight corridor...