Kazakhstan Business & Economy - The Times Of Central Asia

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Energy

Kazakhstan Mini-Refineries Eye Russia After Rail Export Restriction Lifted

Kazakhstan has lifted a railway export restriction on petroleum products from mini-refineries. For small plants, many of which operate well below capacity, the decision restores an opportunity to sell their products outside the country. Kazakhstan Temir Zholy (KTZ), the national railway company, revoked the restriction following an August 7 decision by the country’s Chief Transport Prosecutor’s Office. The timing is notable: after a series of strikes on its refineries, Russia is facing fuel shortages and has already begun importing gasoline from abroad, including Kazakhstan. Other restrictions on fuel exports from Kazakhstan remain in force, so the KTZ decision does not fully reopen gasoline and diesel exports. Some fuels remain subject to separate bans, and exports to Russia are treated differently from shipments outside the Eurasian Economic Union. What Mini-Refineries Produce The number of mini-refineries actually operating in Kazakhstan depends on how such facilities are defined. Official documents have referred to roughly 30 small petroleum-product producers. More recent industry data provide a clearer picture: more than 30 mini-refineries are registered, with declared crude-processing capacity of about 4.5 million metric tons a year. Of these, 22 are considered operational, with a combined capacity of about 2 million tons. Actual processing is considerably lower, having increased from roughly 400,000 to 800,000 tons annually over the past five years. These are not smaller versions of Kazakhstan’s major refineries in Atyrau, Pavlodar, and Shymkent. Most mini-refineries lack equipment for deep refining, so their output is simpler. Their main products include fuel oil, heating and marine fuels, naphtha, and other distillates. In 2023, mini-refineries processed 895,000 tons of feedstock and produced 346,000 tons of fuel oil, 145,000 tons of diesel fuel, and 171,000 tons of bitumen. Much of this output was not intended for Kazakhstan’s motorists. Mini-refineries produce semi-finished products, including straight-run fuel oil with a relatively high share of light fractions that can be processed further. Their opportunities on the domestic market are also limited by product quality: Kazakhstan has required K4 and K5 motor-fuel standards since 2018, while official assessments say mini-refineries generally lack the equipment to produce fuel above the K3 standard. Restoring export opportunities could therefore have a tangible economic effect for these businesses. The plants have spare capacity but insufficient domestic demand for much of their current product range. Rail exports once again give them a way to look for buyers outside Kazakhstan. And that inevitably raises the question of Russia. Russia Is Looking Abroad for Fuel There is no direct evidence that KTZ lifted the restriction specifically because of the Russian market. Neither the Kazakh authorities nor the railway company has made such a connection. But the decision comes at a convenient time for potential Russian buyers. Ukrainian drone strikes and unplanned refinery outages have reduced Russian gasoline production and contributed to domestic shortages. Moscow has responded by restricting fuel exports and increasing imports from abroad. Russia has already turned to several suppliers. In July, Belarus shipped a record 212,000 tons of gasoline to Russia, while Moscow has also begun...

Sports Reform

Kazakhstan Saves More Than $17 Million Under New Sports Club Funding Rules

On June 16, 2025, Kazakhstan stopped using state and quasi-state funds to finance foreign athletes at professional sports clubs. Kazakhstan’s Ministry of Tourism and Sports now says that measure, combined with wider limits on club budgets, has saved more than 8 billion tenge, or about $17.2 million. The change follows years in which football and hockey clubs spent significant amounts of public money on foreign players. Clubs in Kazakhstan may still sign foreign players, provided their contracts are financed by sponsors or private investors rather than public money. Public spending on foreign players was already under scrutiny before the reform. In January 2025, Ulan Sarkulov, then first deputy chairman of Kazakhstan’s Anti-Corruption Agency, said FC Astana and HC Barys had received nearly 100 billion tenge in total over six years. Foreign players’ salaries accounted for around 60–70% of FC Astana’s budget. The funding restrictions are part of Kazakhstan’s effort to reduce professional football’s reliance on the state. Several clubs have since come under private control. FC Kaisar was placed under the private management of construction entrepreneur Islamgali Kozbakov, while Kaspi.kz co-founder Mikheil Lomtadze became the owner of FC Zhenis. A company in the Freedom Holding Corp. group, founded by Timur Turlov, bought FC Shakhter Karaganda at auction. In January 2026, FC Aktobe was sold for 364 million tenge, about $710,000 at the time, to Qazaq Stroy Properties, owned by businessman Nurlan Artikbayev. As The Times of Central Asia previously reported, the change in ownership was followed by the signing of former Manchester United player Nani. Under FC Aktobe’s privatization plan, some public funding was retained. Before the sale, a regional sports official said public money would support its academy and women’s team. The futsal side was also included, while total state support for the club was expected to fall from 3.5 billion tenge in 2025 to 1.9 billion tenge in 2026. A separate ministerial order effective July 25, 2025, imposed limits on public funding for professional teams. The ceilings are set in units of Kazakhstan’s monthly calculation index (MCI), which is adjusted annually. At 2026 levels, a football club can receive up to about $6.1 million a year in total. The ceiling is around $3.5 million for an ice hockey club. In other team sports, each men’s or women’s program can receive about $1.1 million. Football clubs competing in UEFA tournaments can receive an additional $1.9 million. Monthly salaries paid from public funds to first-team players and coaches are capped at about $4,700. Kazakhstan is also changing how senior jobs in state sports organizations are filled. Since September 2025, the heads of these organizations have been subject to a unified rotation procedure, while appointments to top posts have been made through open competition. Of 112 appointments since then, 86, or 76%, followed an open competitive process. Another part of the reform is the unified e-Sport platform, which will gather records of athletes and competitions from across Kazakhstan’s sports system, along with information on coaches and referees. The ministry plans to...

Power Grid

Kazakhstan and Kyrgyzstan Give Conflicting Accounts of Four-Country Blackout

Kazakhstan and Kyrgyzstan have given differing accounts of what triggered the August 14 blackout that cut electricity across swathes of Central Asia. Three days later, the initiating event remains unresolved, and the times released by the two sides do not fit neatly into the same sequence. Kazakhstan’s national grid operator KEGOC says two hydrogenerators at Kyrgyzstan’s Toktogul Hydropower Plant, with a combined capacity of 600 MW, disconnected at 2:37 p.m. Kazakhstan time. KEGOC said the sudden loss of generation overloaded the North-East-South transit corridor, separating southern Kazakhstan from the rest of the national grid and the interconnected systems of Kyrgyzstan, Uzbekistan, and Tajikistan. A special commission is investigating the causes. Meanwhile, Kyrgyzstan’s National Electric Grid has given a different chronology. It said that at 3:34 p.m. Kyrgyzstan time, an external disconnection occurred on a high-voltage line linking the northern and southern parts of Kazakhstan’s power system. The Central Asian network then split into an isolated section, and Kyrgyzstan temporarily operated separately while automatic protection systems worked to protect equipment. The one-hour difference between the countries’ clocks makes the discrepancy clearer. Kazakhstan has used UTC+5 nationwide since 2024, while Kyrgyzstan uses UTC+6. That puts Kyrgyzstan’s reported line disconnection at 2:34 p.m. Kazakhstan time, three minutes before KEGOC’s stated 2:37 p.m. Toktogul shutdown. The two times may describe different stages of a fast-moving cascade, but they do not establish the same starting point. A third timestamp complicates the sequence. Alatau Zharyq Company said three 500 kV KEGOC transmission lines shut down at 2:38 p.m., and that those lines triggered automatic load-shedding and frequency protection in Almaty and the surrounding region. Taken together, the public statements leave a sequence of 2:34 p.m., 2:37 p.m., and 2:38 p.m. that investigators will need to reconcile. TCA reporters in Almaty and Bishkek experienced power cuts, while local media reported outages in Dushanbe, Khujand, and southern parts of Uzbekistan. In Kazakhstan, the disturbance affected consumers in the Zhambyl, Turkistan, Kyzylorda, Zhetysu, and Almaty regions, with further restrictions in Karaganda, Ulytau, and Abai. KEGOC said supplies were restored across the affected regions later that afternoon. The four-country impact reflects how tightly the systems are connected. Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan operate in parallel through the Central Asian power system. Cross-border links allow operators to share electricity and reserve capacity, but also mean that a sudden loss of generation or a major transmission line can be felt beyond one national grid before protection systems isolate the disturbance. Central Asia has been here before. In January 2022, a major blackout hit southern Kazakhstan, Kyrgyzstan, and Uzbekistan. The event also involved a sharp imbalance on the regional network and the separation of Kazakhstan’s northern and southern grids. Its precise starting point was disputed in the immediate aftermath. The regional grid dates to the Soviet period. Uzbekistan later withdrew from the old electricity ring, leaving Tajikistan largely isolated for years. Regional links have since been rebuilt; Tajikistan began reconnecting to the unified system in 2024. An Asian Development Bank project is adding...

Agricultural Export

Kazakhstan Agricultural Exports Face Growing Competition from Uzbekistan

Kazakhstan is rapidly increasing the value of its agricultural exports and trying to sell more processed products abroad rather than simply exporting raw commodities. In 2025, the country’s agricultural exports reached $7 billion, with processed products accounting for $3.6 billion. In the first four months of 2026, exports of agricultural and food products rose another 36% to $3 billion. But Kazakhstan’s relationship with Uzbekistan, one of the main buyers of its agricultural products, shows another side of this process. Uzbekistan is also beginning to challenge the established pattern. It buys Kazakh grain, vegetable oils, and oilseed products, but is expanding its own processing capacity. In some sectors, finished Uzbek products are now entering the same foreign markets where Kazakh producers have traditionally been strong. This is most clearly visible in the flour market. Kazakhstan has long been a dominant regional flour exporter and was until recently Afghanistan’s main supplier. Uzbekistan, meanwhile, imported both Kazakh wheat and flour. As Tashkent expanded its domestic milling capacity, it increasingly bought raw Kazakh wheat and turned it into flour at home. By 2025, the balance had shifted. Kazakhstan supplied Afghanistan with about 1.05 million metric tons of flour, while Uzbekistan shipped nearly 1.59 million tons. Almost all of Uzbekistan’s flour exports in 2025 went to the Afghan market. Kazakhstan has not disappeared from this production chain. Uzbekistan remains one of the largest buyers of Kazakh wheat. Those grain shipments help supply Uzbek flour mills, with the finished flour then exported, including to Afghanistan. Uzbekistan also continues to import Kazakh flour, so the substitution has not been complete. Kazakhstan is also developing its agricultural processing. Exports of processed agricultural products rose 35% to $3.6 billion in 2025. In the flour market, however, the value-adding step of milling grain and exporting the flour has increasingly shifted to its neighbor. There are signs of a similar shift in the vegetable oil and fat industry, although Kazakhstan’s position here remains considerably stronger. Between September 2025 and May 2026, Kazakhstan supplied Uzbekistan with 553,000 metric tons of vegetable oils and meal and oilcake, 31% more than during the same period of the previous season. Kazakhstan accounted for more than 90% of Uzbekistan’s vegetable oil imports in 2025. For Kazakhstan, this is an example of moving beyond the simple export of agricultural raw materials. Uzbekistan, meanwhile, is expanding its own oils and fats industry. Large enterprises produced 31,200 metric tons of margarine and spreads in 2025, up 21.4% from a year earlier. Sunflower oil production is also growing. In January-August 2025, large Uzbek enterprises produced 83,500 metric tons, compared with 28,000 metric tons during the same period in 2023. Domestic production is therefore rising rapidly even as Uzbekistan continues to import large volumes of sunflower oil. Uzbekistan is also beginning to export more sunflower oil. In the first half of 2025, Uzbekistan supplied Afghanistan with more than 17,700 metric tons of sunflower oil, becoming its largest supplier during that period, according to data from agricultural market analyst Marina Sidak and as reported by APK-Inform....

Data Center Valley

Kazakhstan Sets June 2027 Launch for First Data Center Valley Facility

Kazakhstan expects to launch the first facility at Data Center Valley, a large data center campus in the country’s northeast, in the summer of 2027. The government says the first 50 MW object now under construction is due to enter service in June 2027, while the site is ultimately planned to expand to as much as 1 GW. Earlier plans put the first 125 MW center in the first half of 2027; the latest statement does not explain how the 50 MW object fits into that figure. The project is aimed not only at domestic demand: Kazakhstan wants to attract foreign technology companies and is also exploring the possibility of hosting data belonging to other countries. The first data center is already under construction in the Pavlodar region, one of Kazakhstan’s main energy-producing areas. The main buildings are scheduled to be completed by the end of 2026, with commissioning work to be finished in May and the launch planned for June 2027. A 215 MW substation has been acquired to supply the site with electricity. The choice of region is primarily linked to access to electricity. The Pavlodar region is home to Ekibastuz, one of Kazakhstan’s largest power-generation centers, with a vast coal basin and major power plants. For data centers, particularly GPU clusters used for artificial intelligence, access to large and stable power supplies is critical. The stated 1 GW capacity is a long-term target rather than capacity already under construction. The campus is expected to expand gradually as customers are secured. Plans call for data centers, GPU clusters for AI, and cloud services to be hosted at the site. Among the project’s foreign partners is U.S.-based Firebird AI, which works with NVIDIA technologies. In April 2026, representatives of the two companies held talks in Astana on the development of AI infrastructure, high-performance computing, and data centers. Firebird AI later reached agreements on cooperation within the Data Center Valley project. The Times of Central Asia previously reported on plans to create a large computing facility in Kazakhstan using NVIDIA technologies. Technology companies may not be the only potential clients. The government is also developing the concept of a Data Embassy, which could allow foreign governments to store data in Kazakhstan while retaining legal sovereignty over it. Such a model already exists. Estonia established its data embassy in Luxembourg, where servers remain under Estonian state control and are used to store critical data and help maintain government digital services in the event of cyberattacks or other major crises. The two countries signed an agreement on the data embassy in 2017. Kazakhstan’s Data Embassy concept is still being developed. It is being considered alongside Data Center Valley, but the government has not said that foreign states’ sovereign data would necessarily be stored at the Ekibastuz campus. Data Center Valley itself is intended to host computing capacity and cloud services for international clients. Foreign investor interest in Kazakhstan’s data center market is not limited to this project. Singapore-based GK Hyperscale Ltd plans...

Logistics Infrastructure

Landlocked Kazakhstan Builds a Logistics Network from China to the Black Sea

Although Kazakhstan is landlocked, companies based in the country already hold stakes in logistics terminals at Lianyungang on China’s Yellow Sea coast and in Poti on the Black Sea. Projects farther west are at various stages of development. The strategy allows Kazakhstan-based operators to remain involved as freight travels between Asian ports and European markets, including beyond Kazakhstan’s borders. One of the main facilities is at the Chinese port of Lianyungang. The China-Kazakhstan Logistics Cooperation Base began operating in May 2014. It was jointly developed by Lianyungang Port and Kazakhstan Temir Zholy (KTZ), Kazakhstan’s national railway operator. Cargo arriving by sea can be transferred to rail for shipment through Kazakhstan toward Central Asia and Europe. In a written response to The Times of Central Asia, Kazakhstan’s Ministry of Transport said the Lianyungang terminal handled 2.39 million twenty-foot equivalent units (TEU) from 2015 through 2025. Annual throughput rose from 167,000 TEU in 2015 to 271,700 TEU in 2025. A further 140,100 TEU passed through the terminal during the first half of 2026, down 3.2% year on year. According to Samruk-Kazyna, the network extends inland to a terminal in Xi’an and includes Khorgos Gateway at the Kazakhstan-China border. The fund said a dry port in Chengdu would be added in 2027. At the western end, Kazakhstan-based PTC Holding and Georgian partners developed a multimodal terminal that opened in Poti in June 2025 after investment of more than $30 million. The operator currently lists annual throughput capacity at up to 100,000 TEU. Between the terminals in China and Georgia lies Kazakhstan’s rail network, which carries cargo to the Caspian ports of Aktau and Kuryk. These links form Kazakhstan’s section of the Trans-Caspian International Transport Route, known as the Middle Corridor. The route connects China with Europe across the Caspian Sea and the South Caucasus. Kazakhstan is pursuing further terminal projects along the route. In July 2026, Kazakhstan and Azerbaijan were preparing to begin construction of a joint intermodal terminal at Alat. Work was awaiting completion of the Port of Baku’s updated master plan. In June 2026, Kazakhstan’s government said work would begin on terminals in Budapest and Constanța. Later that month, KTZ Express signed an agreement with Midia Marine Terminal for a joint project at Romania’s Port of Midia. The European projects have yet to reach the operating stage. The value of this terminal network becomes clearer from the way the Middle Corridor operates. Containers must move between rail and ships for the Caspian crossing, so faster transit across Kazakhstan cannot determine the total journey time. The World Bank has identified the Caspian and Black Sea crossings as bottlenecks requiring greater vessel availability and higher port productivity. Transit times vary by destination. Turkish officials reported in August 2025 that a freight train from China had reached Turkey in 15 days, while earlier journeys often took more than 20 days because of customs procedures and weather on the Caspian Sea. A 15-day journey should therefore be treated as a benchmark rather than a guaranteed...