Kazakhstan Business & Economy - The Times Of Central Asia

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Data Center Valley

Can Kazakhstan Power Its AI Ambitions?

For now, it is only a vast construction site lost in the steppe, a few kilometers from Ekibastuz, a mining city in northern Kazakhstan. Cranes move behind fences in the shadow of a Soviet-era power station. It is hard to imagine that, from 2027, this site is supposed to become the first piece of a giant artificial intelligence campus. Known as Data Center Valley, the project is eventually expected to reach one gigawatt. At full capacity, it could consume as much as 8.8 terawatt-hours a year, Kazakh media Qyzyq estimated, around 7% of Kazakhstan’s current electricity generation. Development will be gradual, with an initial 50-megawatt facility scheduled to enter service in June 2027. U.S.-based Firebird.ai and state-controlled Kazakhtelecom are leading the industrial project. Yet the futuristic bet collides with a more prosaic reality. “Economic and industrial growth in Kazakhstan is currently outpacing the rate of commissioning and modernization of generating capacity,” the Ministry of Energy acknowledged in a response to The Times of Central Asia. In 2025, the gap between domestic generation and consumption reached 1.5 terawatt-hours, forcing the country to import electricity, mainly from Russia. President Kassym-Jomart Tokayev has acknowledged the scale of the challenge. At the National Kurultai in January, he said data centers consume electricity on a scale comparable to metallurgical plants and that Kazakhstan’s existing generation was “clearly insufficient” for its development plans. He called energy self-sufficiency a key state priority and ordered an expansion of generating capacity, including new coal-fired power. How, then, can Kazakhstan power a campus that could consume almost six times that shortfall? More strikingly, when the government prepared its 2026 electricity forecast, neither Data Center Valley nor any other AI or data-center project was included. The ministry says they will enter its calculations from 2027 - the same year the first facility is due to start operating. [caption id="attachment_54529" align="aligncenter" width="1774"] The mine of Bogatyr is expanding to increase production[/caption] From Coal to Algorithms In Ekibastuz, the answer comes down to one word: coal. “In essence, Kazakhstan is turning Ekibastuz coal into export digital revenue,” Kazakhtelecom chairman Bagdat Musin has said. Electricity generated locally would be converted into computing services sold internationally. No major named customer contract has been announced, although Firebird says it holds guaranteed service contracts with global players. Amazon and G42 have been named as companies entering the ecosystem, while Kazakhstan has also held talks with Microsoft and OpenAI. The landscape appears built for that ambition. Nearby lies Bogatyr, one of the world’s largest open-pit coal mines. From the observation deck, terraces of rock descend 300 meters into the earth. Excavators and haul trucks look like toys at the bottom. “Ekibastuz is a very smart choice: energy is abundant and cheap here, while proximity limits transmission losses between the power station and the consumer,” Yevgeny Masternak, CEO of mine operator Bogatyr Komir, told TCA. To keep pace with anticipated demand, the company plans to raise annual production from 42 million tonnes in 2024 to more than 56 million...

TCA Interviews

Suleimenov Says Stronger Policy Framework Supported Kazakhstan’s S&P Upgrade

A stronger monetary-policy framework, a resilient banking sector, and closer coordination with the government were among the strengths recognized in S&P Global Ratings’ upgrade of Kazakhstan, National Bank Governor Timur Suleimenov told The Times of Central Asia. “S&P’s upgrade of Kazakhstan’s sovereign credit rating from ‘BBB-’ to ‘BBB’ is an important external assessment of the resilience of our economy amid continued global uncertainty and commodity market volatility,” Suleimenov said. On August 21, S&P raised Kazakhstan’s long- and short-term sovereign credit ratings to BBB/A-2 from BBB-/A-3. The stable outlook reflects S&P’s view that Kazakhstan’s ample fiscal and external buffers should help it absorb external shocks, while the non-oil budget deficit is expected to narrow further. Kazakhstan last held the BBB rating before S&P downgraded it in February 2016. Kazakhstan now carries the same BBB long-term sovereign rating as India, Indonesia and Greece. It stands one notch above Hungary, Oman and Serbia at BBB-, and one below Bulgaria and Italy at BBB+. The comparison concerns credit risk rather than economic size or development. Why S&P Moved Now S&P expects Kazakhstan’s economy to grow by 5.1% in 2026 and by around 4% to 4.5% annually in 2027–2029, a pace it says exceeds that of peer countries. It also expects a broader tax base, tighter expenditure controls and reduced quasi-fiscal activity by major state-owned enterprises to improve the country’s fiscal position. Stricter rules governing National Fund withdrawals are intended to preserve the assets available to absorb commodity-price falls and other external shocks. According to the National Bank’s account of the decision, S&P also highlighted Kazakhstan’s substantial foreign-currency reserves and strong external position. A Stronger Monetary Framework “We particularly welcome the agency’s recognition of the strengthening of Kazakhstan’s monetary policy framework and the resilience of the banking sector to macroeconomic shocks,” Suleimenov said. Suleimenov had outlined that policy course in earlier interviews with TCA. In April, he described tighter monetary conditions alongside government fiscal consolidation, while in June, after the Bank cut its base rate from 18% to 17%, he cautioned that inflation had not been defeated and said further moves would depend on incoming data. Annual inflation declined from 11% in March to 10.2% in July. S&P cited a stronger monetary-policy framework, closer government-National Bank coordination, fiscal consolidation, reduced quasi-fiscal activity and tighter macroprudential regulation. It also described the banking sector as resilient, with adequate capital and liquidity buffers. The National Bank’s response went beyond the base rate. It increased minimum reserve requirements, used operations linked to gold purchases to absorb excess liquidity and supported measures to slow unsecured consumer lending. The Bank lowered the rate again to 16.75% in July as inflation eased. Even so, inflation remains more than double the National Bank’s medium-term target of 5%. S&P’s assessment recognizes the strengthening of the monetary-policy framework, not the end of Kazakhstan’s inflation problem. “Enhanced coordination between the Government and the National Bank, together with the continued improvement of regulation and supervision, is contributing to stronger macroeconomic and financial stability,” Suleimenov said. Fiscal Reform...

Uranium

Kazakhstan’s Uranium Advantage Is Difficult to Replicate

Kazakhstan supplies about two-fifths of the world’s mined uranium, making it a critical supplier to nuclear markets in Asia, Europe, and the Americas. What sets it apart is not simply its resource base, but its ability to produce and deliver uranium at scale. Kazakhstan already dominates global uranium mining. It produced 25,839 tonnes in 2025, about 40% of world mine output, and production rose another 9% in the first half of 2026. It has been the world’s largest producer since 2009. Kazakhstan holds about 14% of identified global uranium resources, while Australia, Canada and others also have large deposits. Its advantage is that production capacity is already in place. Developing comparable new supply elsewhere would take years. Demand is meanwhile expected to rise. The OECD Nuclear Energy Agency and International Atomic Energy Agency project annual uranium requirements could rise by about 50% by 2050 in their lower case, and more than double in their higher case. In either scenario, Kazakhstan’s existing production base would be hard to quickly replace. A Uranium Supplier Across Major Markets Kazakhstan supplies markets whose fuel-security priorities increasingly differ. Asia accounted for 56% of Kazatomprom’s consolidated uranium sales in 2025, according to its May 2026 investor handout. The Americas accounted for 25%, and Europe for 19%. The sales map gives commercial weight to Kazakhstan’s multi-vector foreign policy. China is a major customer and industrial partner. Russia remains an important partner through joint ventures, enrichment services, and long-term supply arrangements. European and North American utilities, meanwhile, buy Kazakh uranium as part of increasingly diversified procurement portfolios. Kazatomprom widened that customer base in 2025, adding buyers in Switzerland and the Czech Republic, and expanding relationships with Japan and India, according to its full-year financial results. What distinguishes Kazakhstan is the combination of scale and cross-market integration. It supplies Asian, European, and North American markets while maintaining industrial ties with China, Russia, and Western partners. That gives Kazakhstan room to tailor commercial arrangements to different markets. For Western buyers, this could support additional processing and transit options that meet their commercial and regulatory requirements. Kazakhstan could develop these while continuing to serve established Asian markets, attracting new investment while preserving its multi-vector position. Kazakhstan’s importance to the U.S. market is substantial. Kazakh-origin uranium accounted for 28% of deliveries to American civilian reactor operators in 2025, second only to Canada, according to the U.S. Energy Information Administration. Kazakhstan was also the EU’s second-largest source of natural uranium in 2025, accounting for 20.3% of deliveries to EU utilities, according to the Euratom Supply Agency. Kazakhstan’s production share does not mean that equivalent volumes are available for new customers. Twelve of Kazatomprom’s 14 mining operations are partially owned through partnerships, and much of their output is already committed under long-term contracts. Budenovskoye’s 2026 production, for example, is reserved under an existing offtake agreement for Russia’s civilian nuclear industry. Additional capacity would give Kazakhstan more flexibility to respond to demand across multiple markets. Kazakhstan’s Stability Underpins Global Uranium Supply Kazakhstan’s importance to uranium...

E-Commerce

Kazakhstan E-Commerce Grows as Shoppers Spend over $8 Billion in 2025

Kazakh consumers spent 3.77 trillion tenge (about $8.2 billion) on online purchases in 2025, roughly 50% more than two years earlier. E-commerce now accounts for 14.3% of the country’s retail market, with most sales taking place through marketplaces such as Kaspi.kz, Wildberries, and Ozon. A marketplace is a digital platform that brings together products from multiple sellers rather than operating as a single retailer’s online store. In 2025, they accounted for 86% of online retail sales, up from 84.9% a year earlier, according to Kazakhstan’s Bureau of National Statistics. The share of sales through retailers’ own websites fell from 15.1% to 14%, although their turnover still rose in absolute terms. The online shopping basket is changing as well. Phones and gadgets remain the largest category, accounting for 17.1%. Clothing, footwear, and sporting goods make up 12.4%, household goods 12.1%, home appliances 10.3%, and food 7.4%. Growth in the grocery segment is changing delivery requirements. Five dark-store projects – facilities used to process online orders – were built in Almaty, Astana, Karaganda, and Aktobe last year. Marketplaces also installed 2,300 new parcel lockers. The rapid growth of the market has been supported by the widespread use of cashless payments, banking apps, and retail fintech. Domestic platforms are developing alongside major foreign players, intensifying competition for Kazakh consumers. But the presence of large cross-border platforms also creates additional logistical risks. In July, Ukrainian strikes on Wildberries logistics facilities in Russia affected Kazakh sellers that relied on the company’s Russian infrastructure. Following the attacks, Wildberries began searching for additional warehouse capacity in Kazakhstan, where the company is already developing logistics complexes in Almaty and Astana. Expanding domestic warehousing and infrastructure can shorten delivery times and reduce the dependence of some trade flows on logistics centers abroad. New Kazakh players are also emerging. In Karaganda, for example, the Teez marketplace is developing its own warehouse infrastructure and nationwide delivery network. The market’s growth has also brought problems for sellers, with Kazakh entrepreneurs citing difficulties with international payments and double taxation among the main barriers to growth. For small businesses, marketplaces provide access to a large customer base, but they also make sales dependent on the platform’s commissions and logistics. The rules for foreign players are changing as well. Since January 1, 2026, foreign marketplaces serving Kazakh consumers have been required to comply with new tax laws. The VAT rate for foreign platforms has risen from 12% to 16%. The legislation also allows Kazakhstan to suspend access to platforms that ignore registration notices. The government is anticipating further e-commerce growth. The Ministry of Trade’s official target is to increase its share of retail turnover to 18.5% by 2029. In 2024, the market was worth about 3.2 trillion tenge and accounted for 14.1% of retail trade, the Ministry of Trade and Integration said its volume had increased roughly fivefold since 2020. E-commerce is now expanding from a much larger base. Marketplaces already account for the overwhelming majority of online sales, so the next stage of market development will depend not...

Middle Corridor

Kazakhstan Middle Corridor Railway Cuts Detour, but Caspian Bottlenecks Remain

Kazakhstan expects to complete the roughly 323-kilometer Moyynty-Kyzylzhar railway across the Karaganda and Ulytau regions of central Kazakhstan by the end of 2026. The new line will shorten the Middle Corridor by 149 kilometers and ease congestion on the existing route via Zharyk. Kazakhstan Temir Zholy said in July that 202.5 kilometers of track had been laid. For the China-Europe route, however, the next test is the Caspian Sea. Containers must be transferred from trains at ports in Kazakhstan to ships bound for Azerbaijan, then returned to rail. The speed and regularity of these transfers will determine whether the hours saved within Kazakhstan translate into shorter delivery times. What the New Line Changes Moyynty-Kyzylzhar will give transit trains a more direct route from the Chinese border toward the Caspian and ease pressure on the Moyynty-Zharyk section, where east-west freight competes with domestic traffic. The project is designed to accommodate double-stack container trains and includes provisions for future expansion and electrification. The World Bank projects that capacity on the section will rise from 14 to 28 pairs of freight trains per day, while transit time via the new route is targeted to fall from eight hours to six by 2031. In February, the World Bank approved an $846 million guarantee intended to mobilize $1.41 billion in commercial financing for the project. Across Kazakhstan, the time savings will be more modest. Transit from Dostyk, on the Chinese border, to Aktau is expected to fall from about 72 hours to 68 hours by 2031. Farther west, the country is also modernizing the Shalkar-Beineu and Beineu-Mangystau sections leading toward the Caspian ports. The Caspian Remains a Bottleneck The European Union (EU) aims to reduce transit time along the Trans-Caspian route to no more than 15 days. The European Bank for Reconstruction and Development (EBRD) has estimated that the route has the potential to move cargo between China and Europe in around 18 days, but infrastructure and connectivity constraints have produced transit times ranging from 14 to 60 days. For shippers, reliability is as important as speed. Freight Is Growing Faster Than Caspian Capacity Pressure on the Caspian section is already increasing. In 2025, Kazmortransflot carried 59,400 twenty-foot equivalent units (TEU) on the Aktau-Baku-Aktau feeder route, more than 15% above the 2024 level of 51,400 TEU. In May 2026, container traffic between Aktau and Azerbaijan reached a company record of 7,451 TEU. Kazakhstan is expanding its port infrastructure as well. The EBRD and the EU are financing upgrades at Aktau, including two dedicated container berths and new handling equipment. The project is expected to double the port’s container-handling capacity. Caspian fleet capacity is another constraint as rail freight grows. Falling Caspian Sea levels are also limiting how fully some vessels can be loaded. From an Alternative to Russia to a Commercial Route After 2022, geopolitics increased demand for the Middle Corridor. It offered Europe a route to Central Asia and China that bypasses Russia, while providing Kazakhstan with another connection to European markets. The corridor increasingly has to compete on commercial terms....

Electricity Supply

Kazakhstan Targets End to Electricity Deficit by 2027

Just days after a major disruption hit power systems across Central Asia, Kazakhstan reaffirmed its plan to fully cover domestic electricity demand by the first quarter of 2027. By the end of next year, the Energy Ministry expects the country to have a surplus of about 1.3 billion kWh. That margin would still leave relatively little room for error because it is equivalent to only about 1% of the electricity Kazakhstan consumed in 2025, when demand grew by 3.8%. The August 14 outage affected parts of Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan. Power was cut to some consumers in Almaty, Kazakhstan’s largest city, which has a population of about 2.4 million. The precise chain of events remains unclear. Kazakhstan’s national grid operator KEGOC said the disruption began when two hydrogenerators at Kyrgyzstan’s Toktogul Hydropower Plant shut down, sharply changing power flows and overloading Kazakhstan’s North-East-South transmission corridor. Kyrgyzstan’s Energy Ministry later acknowledged that the Toktogul shutdown was the initial disturbance but said it should not automatically be treated as the direct cause of the subsequent outages elsewhere in Central Asia. A special commission is investigating the incident, although public statements so far have not identified its chair. The outage exposed a risk in regional grid connections. Kazakhstan’s grid is connected to Russia and neighboring Central Asian systems. These links allow electricity to move across borders, but a sudden loss of generation or a major transmission failure can also affect several countries in quick succession. Kazakhstan has been a net electricity importer for several years. In 2025, the country generated 123.1 billion kWh and consumed 124.6 billion kWh. Electricity imports from Russia totaled 4.64 billion kWh, compared with exports of 2.16 billion kWh in the opposite direction. The net inflow from Russia fell from 3.41 billion kWh in 2024 to 2.48 billion kWh in 2025. Electricity consumption increased by 3.8% in 2025, while peak demand reached a record 17.724 GW on December 18. Kazakhstan is also seeking to attract energy-intensive industries and large data centers. Those expectations are reflected in longer-term development plans, which already include 7.8 GW of new and modernized coal-fired generation by 2030, with investment estimated at more than $15.5 billion. The authorities expect to close the remaining short-term deficit by rapidly commissioning new generating capacity. Around 2.6 GW is scheduled to come online in 2026. Four gas-fired power plants and expansion projects at two existing power stations account for part of that capacity, while ten new renewable energy facilities are also planned. The Energy Ministry says these projects should allow Kazakhstan to fully meet its electricity needs by the end of the first quarter of 2027. A further 845 MW is planned for 2027, of which 570 MW would come from renewable projects. By the end of that year, the ministry expects an electricity surplus of around 1.3 billion kWh. Renewable energy is expanding alongside Kazakhstan’s continued reliance on conventional generation. Thermal power plants accounted for 74.4% of electricity generation in 2025. Solar and wind facilities, along with biogas plants, provided 6.1%. The...