Kazakhstan Business & Economy - The Times Of Central Asia

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Data Centers

Kazakhstan Data Centers: Will There Be Enough Electricity and Customers?

Kazakhstan aims to become a regional hub for data processing and artificial intelligence (AI). Data Center Valley is under construction in Ekibastuz, United States-based Firebird is involved in preparations for a major computing complex, and new fiber-optic lines are expected to connect the country to Europe across the Caspian Sea. Authorities hope to attract billions of dollars in investment and develop hundreds of megawatts (MW) of capacity. The main questions are whether the power grid can meet such demand and whether there will be enough international customers. Ekibastuz: The First 50 MW of a Promised Gigawatt At the center of these plans is Data Center Valley in Ekibastuz, an industrial city in northeastern Kazakhstan. The complex is eventually expected to expand to 1 gigawatt (GW) of capacity. According to the government, the first phase is designed for 50 MW. By August, earthworks were approximately 90% complete, and builders had begun laying foundations, with the first facility scheduled to launch in June 2027. Firebird AI: $10 Billion in Agreements On October 2, national telecommunications operator Kazakhtelecom, KT-Telecom, and Firebird AI KZ signed an initial agreement covering the construction and long-term leasing of computing infrastructure. Earlier, the government announced a package of agreements worth up to $10 billion with Firebird, involving U.S.-based NVIDIA as a technology partner. The project provides for the potential deployment of up to 100,000 graphics processing units (GPUs), specialized chips used to train and run AI systems. For now, the $10 billion represents the announced value of the agreements. How much money will go directly toward construction and equipment purchases has not been publicly disclosed. Singapore-based Energy Capital Global has also expressed interest in Kazakhstan’s market. The company is considering a data center campus at Data Center Valley with an initial phase of approximately 100 MW and the potential to expand to 1 GW. In August, it signed a memorandum of understanding with KT-Telecom. Trans-Caspian Cable: A New Data Transmission Route Data centers need fast communications links to serve international customers. Kazakhstan and Azerbaijan are developing an undersea fiber-optic connection between Aktau and Sumgait. On October 6, Kazakhstan's Minister of Artificial Intelligence and Digital Development, Zhaslan Madiyev, announced that the approximately 390-kilometer undersea section of the cable had been completed. The line is scheduled to launch in October 2026. The Trans-Caspian route is intended to connect China and Central Asia with the South Caucasus and Europe. For Kazakhstan, it offers an opportunity to reduce dependence on Russian transit routes. According to the Caspian Policy Center, approximately 95% of the country's outbound international internet traffic passes through Russia. Kazakhstan is also building an approximately 4,500-kilometer West–East fiber-optic backbone, connecting the Caspian coast with the Chinese border. More than 2,200 kilometers have been laid, with construction scheduled for completion by the end of 2026. The new routes would also provide alternative connections, reducing the risk of widespread disruptions if individual lines are damaged. The Existing Market: Tens of Megawatts Versus Hundreds Planned As of October 7, 2026, the industry directory...

Kashagan Oil Field

Exxon Reportedly Blocks Settlement Over Kazakhstan’s $5 Billion Kashagan Fine

ExxonMobil has blocked a proposed settlement over Kazakhstan’s $5.2 billion environmental fine against the operator of the Kashagan oil field, according to an October 9 Bloomberg report citing unnamed sources. The dispute also affects reported discussions about a potential $80 billion expansion, although Kazakhstan’s state oil company has challenged accounts of that proposal. Citing people familiar with the negotiations, Bloomberg said Exxon opposed the latest settlement proposal and persuaded TotalEnergies, previously neutral, to join its position. Together, their opposition was sufficient to halt the proposal. The terms under discussion were not disclosed. Kashagan is operated by a consortium of international companies and Kazakhstan’s state-owned KazMunayGas. ExxonMobil, TotalEnergies, Shell, and Eni each hold 16.81%, while KazMunayGas owns 16.88%. CNPC and Inpex hold the remaining stakes, according to KazMunayGas. According to Bloomberg, KazMunayGas has decided to pay its share of the fine, although the agency did not establish whether payment had been made. ExxonMobil, TotalEnergies, KazMunayGas, Shell, and Inpex declined to comment. Eni, CNPC, and North Caspian Operating Company (NCOC), the field operator, did not respond to its requests. The dispute has also entered discussions over future development. In August, Bloomberg reported that Exxon had proposed an $80 billion joint venture with KazMunayGas to develop western Kashagan. The proposed 50-50 venture could produce up to 600,000 barrels a day, but would depend on resolving the sulfur fine and Kazakhstan's separate claims of around $150 billion. However, KazMunayGas chairman Askhat Khassenov rejected that account, saying it was inaccurate and that the company did not confirm plans for the joint venture. The project has not been approved, and neither the investment figure nor the proposed production capacity has been independently confirmed. KazMunayGas has published separate expansion plans for existing Kashagan operations. Its Phase 2A and 2B projects could raise total oil and condensate production to roughly 710,000 barrels a day, subject to further technical work, gas-processing capacity, and investment decisions. It remains unclear how the reported western development would fit alongside those plans. Kashagan produced approximately 18.2 million metric tons of oil in 2025, according to KazMunayGas. Further expansion would be technically demanding. The field lies in the shallow northern Caspian Sea, where high levels of hydrogen sulfide complicate extraction and processing. The penalty dates to a 2022 inspection of NCOC’s Bolashak processing complex in the Atyrau Region. Inspectors said more than 1.7 million tons of sulfur had accumulated in storage, against a permitted limit of 730,000 tons. NCOC denies the alleged violations and maintains that its sulfur management complied with Kazakh law and project permits. The penalty totals 2.356 trillion tenge, with its dollar value varying by exchange rate. NCOC’s 2024 sustainability figures show that sulfur in block storage fell from 1.775 million tons at the end of 2022 to 613,000 tons at the end of 2024. Annual sulfur production in 2024 was 1.42 million tons, a different measure from the accumulated stockpile involved in the fine. The reduced stockpile does not determine whether the earlier storage breached the permit. Concerns about storage...

Energy Infrastructure

AIIB Signs $1.1 Million in Grant Agreements for Caspian Green Energy Projects

The Asian Infrastructure Investment Bank (AIIB) and Azerbaijan have signed two grant agreements totaling $1.1 million. The funds will support preparations for a submarine electricity cable between Kazakhstan and Azerbaijan, as well as preliminary planning for offshore wind infrastructure in the Caspian Sea. Most of the funding, $1 million, is earmarked for the first phase of a feasibility study for the Caspian Green Energy Corridor. The grants are being administered by AIIB through the Multilateral Cooperation Center for Development Finance. The project envisages laying an approximately 400-kilometer submarine power cable. Uzbekistan is also expected to be connected via overland transmission lines. Experts will assess the technical feasibility of transmitting electricity across the Caspian Sea, as well as the scheme's economic viability and environmental impact. The Asian Development Bank will provide another $1 million for the study, bringing its total funding to $2 million. A separate $100,000 grant will support preliminary planning for shore-based infrastructure for Azerbaijan's offshore wind industry. This includes port facilities and vessels, as well as connections between future wind farms and the power grid. Kazakhstan, Uzbekistan, and Azerbaijan agreed to develop the energy corridor in November 2024 at the COP29 climate conference in Baku. In March 2026, the Mazhilis, formerly the lower house of Kazakhstan's parliament, approved an agreement on a strategic partnership among the three countries in the production and transmission of green energy. Kazakhstan formally ratified the agreement in April. The corridor would enable exports of renewable electricity from Kazakhstan and Uzbekistan to Azerbaijan, with the possibility of further deliveries to Europe. Regional cooperation plans also cover the production and export of green hydrogen and ammonia using renewable energy. Azerbaijan's Energy Minister Parviz Shahbazov said the agreements would help develop offshore wind energy and expand opportunities to export electricity from the Caspian region and Central Asia. AIIB Chief Investment Officer Konstantin Limitovskiy stressed the importance of preparatory studies in attracting investment to regional energy infrastructure. AIIB's 12th Annual Meeting will take place in Baku, Azerbaijan, on July 14–15, 2027.

Regional Trade

Central Asia and Azerbaijan Discuss Trade Expansion at Turkmenistan Summit

The leaders of Central Asia and Azerbaijan met in Turkmenistan on October 8, with expanding trade between their countries high on the agenda. Kazakhstan's President Kassym-Jomart Tokayev called for trade among the six countries to rise to at least $20 billion, up from approximately $13 billion in 2025. The eighth Consultative Meeting of the Heads of State of Central Asia and Azerbaijan was held in the resort of Avaza, with Azerbaijan participating as a full member of the grouping for the first time. According to Tokayev, trade between the six countries accounted for just 8% of their combined trade turnover last year. He proposed that governments develop a joint action plan to increase that share. Other leaders put forward proposals for closer economic ties. Uzbekistan's President Shavkat Mirziyoyev called for greater cooperation in manufacturing and a Central Asia-Azerbaijan Business Forum in 2027, while Kyrgyzstan's President Sadyr Japarov proposed creating a shared e-commerce platform to make regional products more accessible. One problem is the insufficient integration of national markets. Even where countries share a border, trade is hampered by logistical constraints and differences in business operating conditions. Tokayev proposed bringing existing and planned cross-border trade and logistics complexes and industrial centers into a single network. The idea is to enable businesses from different countries to sell finished products to one another and produce them jointly. However, Kazakhstan's major transport projects are not designed solely for its neighbors. Astana is investing in railways and highways to increase freight transit between China, Central Asia, and Europe. The projects include the Moyynty–Kyzylzhar, Darbaza–Maktaaral, and Bakhty–Ayagoz railway lines, as well as the Aral–Caspian highway project. The Middle Corridor holds a particularly important place in these plans, running from China through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia to Europe. It allows freight to bypass Russian territory and is viewed as an alternative to traditional northern routes. Kazakhstan is now proposing to explore linking the Middle Corridor with the Trump Route for International Peace and Prosperity (TRIPP), a transport project through Armenia intended to connect mainland Azerbaijan with Nakhchivan. Plans for the route were outlined during talks in Washington in August 2025, and Armenia and the United States signed a framework agreement in June 2026. The route is to remain under Armenian sovereignty and jurisdiction. Astana has already established a technical group to assess its potential participation in TRIPP. For now, Tokayev is proposing that the integration of the two transport initiatives be discussed only at the expert level. At the Avaza summit, Turkmen President Serdar Berdimuhamedov emphasized the importance of developing North–South transport corridors alongside East–West routes. Turkmenistan also supports the eastern branch of the International North–South Transport Corridor, which connects Russia with Iran through Kazakhstan and Turkmenistan. However, an increase in freight traffic through Central Asia does not in itself mean that trade among its countries will grow. For that to happen, local producers need access to neighboring markets. The summit also addressed cooperation over shared water resources, with Tokayev proposing a regional framework...

Bilateral Trade

West2West: Kazakhstan Adds a Regional Dimension to Trade with Afghanistan

In late September, a Kazakhstani official and business delegation led by Yerkin Tukumov, the Special Representative of the President of Kazakhstan for Afghanistan, visited Herat. The delegation included trade officials, representatives of the Mangystau and West Kazakhstan regions, and businesses. Officials called the new approach West2West, meaning cooperation between Kazakhstan's western regions and western Afghanistan. Kazakhstan and Afghanistan have held several business forums and exhibitions in recent years. However, the choice of Herat and the attempt to shift some cooperation from the intergovernmental to the interregional level make this initiative different. Since 2021, Kazakhstan’s economic dialogue with Afghanistan has developed mainly from the top down. The two governments set ambitious trade targets and sought to turn political engagement into commercial deals. The results looked impressive on paper. In October 2024, the two countries adopted a road map to raise mutual trade to $3 billion. In April 2025, documents worth $140 million were signed in Kabul, followed by 15 documents worth $303 million in Shymkent that October. Actual trade, however, grew much more slowly. In 2024, it totaled $545.2 million, while in 2025 it slipped slightly to $541.6 million. The $3 billion target remains more of a strategic benchmark than a near-term goal. According to official data from Kazakhstan, trade reached $581.1 million in January-July 2026, exceeding the total for the entire previous year. Kazakhstan’s exports accounted for $572.9 million, while imports from Afghanistan were just $8.2 million. Trade is therefore growing rapidly, but remains overwhelmingly one-sided. West2West is partly an attempt to broaden that relationship. Herat's Strategic Location Herat is one of Afghanistan’s main industrial and commercial centers, situated near several important transport routes. To the north is Torghundi, a rail border crossing with Turkmenistan. To the west runs the Khaf-Herat railway, which connects Afghanistan to Iran’s railway system. Herat could eventually become part of longer routes toward Kandahar and Pakistan, although much of the necessary infrastructure remains at the planning stage. During the September visit, officials opened a 43-kilometer section of the Khaf-Herat railway. Afghan sources estimate its cost at approximately $58 million. The section was built with the involvement of Kazakhstani company Integra Construction KZ. In August 2026, freight transported along the Khaf-Herat line totaled approximately 137,700 metric tons. Discussions have also focused on increasing its monthly capacity to 150,000 metric tons. Together with Uzbekistan and the United Arab Emirates, Kazakhstan has begun working on the Central Asia–South Asia railway project, which envisages a trans-Afghan connection to Pakistan’s ports. So far, the parties have agreed to conduct technical and economic studies, and no final route has been approved. The route through Turkmenistan is developing separately. Ashgabat views Torghundi-Herat as a joint project with Afghanistan linked to the expansion of the Serhetabat-Torghundi crossing and other infrastructure in western Afghanistan. Kazakhstan’s interest in Herat predates West2West. In 2023, Astana announced plans to establish a Kazakhstan Trade House in Afghanistan, with its main office in Herat. It opened in May 2024. Arman Yessentayev, its head, described Herat in 2023 as a...

Declaration AI

Kazakhstan Signs Declaration on Human Oversight of AI at Work

Kazakhstan's government, employers, and trade unions signed a declaration on October 7 calling for human oversight of artificial intelligence in the workplace. The declaration was adopted in Astana at the international forum “Digital Labor and Artificial Intelligence.” It states that decisions affecting workers’ rights and interests should involve a human decision-maker rather than be left entirely to AI. Federation of Trade Unions chairman Satybaldy Dauletalin said employers should remain accountable for decisions made using algorithms. Workers should be able to challenge those decisions and request human review, he said. The federation said the signatories agreed to establish a national forum for cooperation on digital labor and AI. Working groups and a monitoring system would support implementation. Some protections already exist under Kazakh law. The country's AI legislation, which took effect in January 2026, establishes requirements for transparency and human autonomy in AI systems. The Digital Code, effective since July, also gives people the right, under certain conditions, to seek explanations of fully automated decisions and request human review when those decisions affect their rights. The European Union's 2024 Platform Work Directive sets specific requirements for algorithmic management on digital labor platforms. It requires human oversight of automated systems, including human decisions on the dismissal or suspension of workers. Member states have until December 2026 to implement the directive. Meanwhile, Kazakhstan is already using AI in its public employment services. In the Mangystau and Pavlodar regions, an automated job-matching system sent approximately 59,000 personalized vacancy notifications over two months. Deputy Labor Minister Bakhtiyar Zhazykpayev said about 3,000 people had found employment. Those figures alone do not establish how many found work directly because of the system. The federation’s published account does not explain whether the declaration creates additional enforceable obligations for employers or a new complaints procedure for workers.