Kazakhstan - The Times Of Central Asia

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AIFC TCA Interviews

AIFC Interview: Central Asia Investment, Middle Corridor and ESG

The Astana International Financial Centre (AIFC) positions itself as a platform for international investment in Kazakhstan and across Central Asia. In an interview with The Times of Central Asia, Zhanbolat Kakishev, Chief Product Officer at the AIFC Authority, discussed competition for investment, financing for the Middle Corridor, investor protection, ESG, and currency risks. Kakishev said the AIFC ecosystem has attracted $26.3 billion in investment to Kazakhstan and registered more than 6,000 companies from 90 countries. TCA: How does the AIFC assess the current investment climate in Central Asia amid the fragmentation of global markets, and what share of foreign direct investment into the region does the centre aim to attract in the coming years? Zhanbolat Kakishev: We assess Central Asia’s investment climate as resilient and gradually strengthening despite the fragmentation of global markets. Moreover, the restructuring of global supply chains and investors’ search for new sources of growth are creating additional opportunities for the region. International investor interest in Central Asia already rests on a solid foundation. According to UNCTAD, by the end of 2025, the stock of foreign direct investment in the region had reached approximately $235.5 billion, of which $156.4 billion was in Kazakhstan. The region combines a substantial resource base, a growing domestic market, and a strategic position between Europe and Asia. It also has significant investment potential in areas including transport and logistics, energy, critical minerals, digitalisation, and financial services. The AIFC does not set a target in the form of a fixed share of total FDI flowing into Central Asia. Our task today is to continue improving the AIFC ecosystem, its infrastructure, and the conditions that allow international capital to enter Kazakhstan effectively, as well as to participate in regional projects. To date, $26.3 billion in investment has been attracted to Kazakhstan through the AIFC ecosystem. More than 6,000 companies from 90 countries are registered in the Centre’s jurisdiction. For us, however, it is not only the volume of capital attracted that matters, but also its quality — long-term investment that contributes to economic diversification, private-sector development, and the further integration of Kazakhstan and Central Asia into global capital markets. TCA: Given the growing interest in the Middle Corridor, or Trans-Caspian International Transport Route, what investment instruments does the AIFC offer to finance major infrastructure and logistics projects in the region? Zhanbolat Kakishev: The AIFC provides comprehensive legal and financial infrastructure for structuring and attracting financing for major infrastructure and logistics projects, including those along the Middle Corridor. Depending on the structure of a project, special-purpose vehicles or companies (SPVs/SPCs), joint ventures, and investment funds can be used to pool capital from strategic, institutional, and private investors. Through the Astana International Exchange (AIX), projects can also raise debt and equity financing, including through conventional, green, and sustainability bonds, as well as Islamic finance instruments such as sukuk. For large infrastructure projects, the ability to combine different sources of capital is particularly important. These can include financing from international financial institutions and banks, funds from strategic...

Oil Refining

After CPC Disruptions, Kazakhstan Wants to Refine More Oil at Home

Kazakhstan wants to more than double its oil refining capacity and sell more petrol and diesel to neighboring countries. The case for reducing its reliance on crude exports has gained urgency. Disruptions to the Caspian Pipeline Consortium (CPC) this year have already forced the country to cut its 2026 oil production forecast by 2 million tonnes. Kazakhstan produced 99.6 million tonnes of oil in 2025 but refined only 18.4 million tonnes. Energy Minister Yerlan Akkenzhenov said at a briefing on August 25 that refining capacity is planned to increase to 40 million tonnes. “We want to bring this ratio, as in other developed countries that are also producers, to one to two or one to three,” Akkenzhenov said. According to him, Kazakhstan eventually expects to supply neighboring countries with motor fuel and expand its export potential. This does not mean abandoning crude oil exports: even after refining capacity reaches 40 million tonnes, a significant share of production will continue to be exported. Astana is instead seeking to shift the balance toward finished products. The oil refining industry development concept runs through 2040. According to the Energy Ministry, Kazakhstan’s refineries processed 18.4 million tonnes of oil in 2025 and produced 15.47 million tonnes of petroleum products. The concept adopted in 2025 envisaged refining rising to 39.2 million tonnes a year by 2040. The government has since accelerated the timetable, targeting 40 million tonnes of annual capacity by 2033. Average refining depth at the country’s three main refineries reached 90% in 2025 and is targeted to rise to 94%. To achieve this, Kazakhstan is preparing to build a fourth major refinery with capacity of up to 10 million tonnes a year. Possible locations include the Mangystau, Atyrau and Turkestan regions, as well as Ulytau, with the authorities expecting to select a site by the end of the year. The new plant could begin operating by 2033, with the Energy Ministry expecting its launch to fully cover domestic demand for jet fuel and allow Kazakhstan to expand exports of K5-standard petroleum products, broadly equivalent to Europe’s Euro 5 standard. Problems with the Caspian Pipeline Consortium, Kazakhstan’s main route for getting oil to the global market, have strengthened the case for diversifying the way Kazakhstan uses and exports its oil. The pipeline runs through Russia to a Black Sea terminal near Novorossiysk, meaning disruptions there can quickly affect production in Kazakhstan. On August 25, Akkenzhenov said the country’s oil production forecast for 2026 had been cut from 98 million to 96 million tonnes. He estimated production losses resulting from attacks on CPC infrastructure at around 3.5 million tonnes. The authorities are trying to compensate for part of the lost volumes by rescheduling major maintenance at large oil fields. Astana is also looking for additional routes to global markets. Akkenzhenov identified Baku-Supsa, the pipeline running from Azerbaijan to Georgia’s Black Sea coast, as one option, saying it could carry around 5 million tonnes a year. The route has seen only limited use since 2022, although...

Opinion

What Building Central Asian Supply Chains Taught Me About AI

I took over spare-parts supply at BPK Auto in Ust-Kamenogorsk in the mid-2000s, at the age of 25, moving from selling cars. The company was the general dealer for VAZ in Kazakhstan, assembled Niva models in the city, and was taking on Skoda, Chevrolet, and Kia while building service centers across the country to meet the expectations of those brands for a dealer. My job was to keep parts flowing to all of it. Several thousand vehicles came through in a month, and a single car contains something like 50,000 separate part numbers. The service teams wanted as many of those as possible sitting on the shelves. From where they stood, that made sense, because they were judged on whether a mechanic could start a repair the same day, whether a customer complained, and an ISO audit was running over the service operation at the same time. From the procurement side, the arithmetic looked different. Some parts cost two or three thousand dollars and were fitted once or twice a year, and holding them across four model lines tied up a large share of the company's working capital. I built the forecast in spreadsheets and checked it against actual sales once the month closed in 1C. To run it, I needed the service side's own records: how many vehicles of each type they had seen, and what had been repaired. I asked for them for months. They would not release them. Some of that was habit; a warehouse full of everything being what a well-run operation had looked like for the previous 40 years. More of it sat in how the two departments were counted. My result was recorded the moment the parts moved into the service center. Theirs was recorded much later, when the car left the workshop. Nobody was measured by the number that would have made the forecast work. The forecasting was the straightforward part of that job. The difficult part was building an operation in which people shared the information behind the forecast and were expected to act on its findings. Why a Better Model Would Not Have Changed the Outcome Put one of today's AI demand-forecasting systems into that same warehouse and very little changes. The forecast would be far better than anything I produced by hand. It would still depend on service records that nobody was willing to release, and where records did exist, it would be reading entries written up at the end of a long shift. It could not grant the purchasing manager authority to reorder against it, nor could it alter the measures by which the service department was judged. Better intelligence does not repair the path between operational data and operational action. Every party you add to that path lengthens it. A distribution network across Kazakhstan and Kyrgyzstan can run from a manufacturer to over 45,000 small retail outlets, served through more than 18 distribution centers, with 1,391 field staff taking and checking orders on the ground. An order begins...

Fuel Shortages

Kazakh Refinery Plans Fuel Exports to Russia Amid Petrol Shortages

A small refinery in western Kazakhstan is preparing to process Russian crude and send most of the resulting petrol and diesel back to Russia as Moscow struggles with fuel shortages. The arrangement was confirmed on August 25, the same day that separate incidents occurred at two of Kazakhstan’s three major refineries. On August 19, Russian Deputy Prime Minister Alexander Novak said that, given the situation on the fuel market, the government was “keeping its finger on the pulse” and monitoring supplies daily with companies and regional authorities. According to Novak, Russia had already imposed export restrictions and begun importing petroleum products. Several refineries were also expected to return from repairs, increasing domestic supplies. Russia’s Fuel Shortage The pressure on Russia’s fuel market is illustrated by data published by the industry portal InfoTEK. According to its August 24 snapshot, AI-95 petrol, the widely used 95-octane grade, was available at only 5,620 of Russia’s 26,098 operating filling stations, or 22%. Even in Moscow, it could be found at 161 of 786 operating stations, about 20%. Russia has also temporarily relaxed restrictions on lower environmental grades of fuel, including Euro 4, Euro 3 and Euro 2, known in the Russian classification as K4, K3 and K2. Since 2016, only fuel meeting at least the Euro 5 standard had generally been permitted. Russian economist Boris Grozovsky estimates that, given the refining capacity knocked out by Ukrainian strikes and the number of plants undergoing repairs, Russia is currently short of roughly one-third of the petrol needed at peak demand. August is traditionally a high-demand month because of summer travel and agricultural work. “If it were November now, the situation would be a little easier for the Russian government. Russia is trying to bring in petrol from India, Morocco, Turkey, Kazakhstan and Azerbaijan, but imports also have limitations. The petrol brought in from India turned out to be too expensive,” Grozovsky said. Kazakh Refinery Steps In Speaking at a government briefing on August 25, Kazakhstan’s Energy Minister Yerlan Akkenzhenov said that the small Condensat refinery in Aksai, West Kazakhstan Region, would process Russian crude, with around 70% of the petrol and diesel it produces sent to Russia. Up to 30% will remain on the Kazakh market, while the refinery also retains the right to export products outside the Eurasian Economic Union. “Under the agreement we currently have, up to 30% of the petroleum products in demand, petrol and diesel, will remain in Kazakhstan, while the rest will be shipped to the Russian Federation,” the minister told reporters. Akkenzhenov said the arrangement reflected Condensat’s location close to the Russian border. The refinery is not connected by pipeline to either country’s main oil network, meaning both crude deliveries and fuel exports depend on rail capacity. Akkenzhenov also stressed that the refinery’s owner is not under sanctions and said the Energy Ministry did not see sanctions risks for the project. He said the arrangement would also bring investment and preserve jobs at a refinery that has struggled financially. Condensat’s Financial Troubles Condensat was established in...

Aral Sea

Aral Sea Restoration Could Prevent 605 Million Tons of CO2 Emissions

The drying of the Aral Sea has created another environmental problem: according to a study, exposed lakebed sediments released about 748 million tons of CO2 into the atmosphere between 1960 and 2022. Organic carbon remains stored in the sediments, and restoring part of the water cover could prevent the release of another 605 million tons of CO2. This gives efforts to restore the Aral Sea region a new climate dimension. The study, conducted by an international team of researchers led by scientists from Spain’s Centre for Advanced Studies of Blanes (CEAB-CSIC), was published in Science on July 16. The findings add another consideration to restoration efforts already underway across the region, from refilling part of the sea in Kazakhstan to planting saxaul and rehabilitating degraded land in Uzbekistan. The Aral Sea’s Carbon Legacy When the Aral Sea was still a fully-fledged body of water, plants and algae absorbed carbon dioxide, while some organic matter settled on the lakebed. As the water retreated, those sediments were exposed to the air, organic matter began to decompose, and the stored carbon started returning to the atmosphere as CO2. At the same time, winds carry salt and dust from the newly formed Aralkum Desert, spreading the consequences of the sea’s disappearance far beyond its former shoreline. In 2022, researchers conducted an expedition to the dried Aral Sea bed, collecting sediment samples and measuring how much CO2 was being released. Combined with satellite data, this allowed them to estimate carbon losses as the sea retreated. According to the researchers’ calculations, exposed sediments lost about 204 million tons of carbon between 1960 and 2022, equivalent to roughly 748 million tons of CO2. New vegetation growing on the dried lakebed has offset less than 1% of those emissions. A significant amount of organic carbon remains in the sediments. The researchers estimate that restoring water cover could prevent the release of another 605 million tons of CO2. The authors also considered the economics of such an effort. Using 2024 voluntary carbon market prices for land-use and forestry projects as a benchmark, they estimate that the avoided emissions could potentially be worth $3.6 billion to $18 billion in carbon credits. That money could theoretically become one source of funding for ecosystem restoration. Researchers estimate that about $9.7 billion in water-management improvements could increase inflows enough to restore roughly half of the area covered by the Aral Sea in 1960, while potentially generating about 323 million tons of CO2-equivalent carbon credits. Restoring the Entire Aral Sea Is No Longer the Goal Under current conditions, fully restoring the sea is widely considered unrealistic. The central issue is water. The Amu Darya and Syr Darya flow through several Central Asian countries. Significantly increasing the amount of water reaching the Aral Sea would be impossible without basin-wide agreements, irrigation modernization, and reductions in water losses. This is why restoration of the Aral Sea remains a regional issue rather than solely an Uzbek or Kazakh one. Central Asian countries coordinate part of this work...

U.S.-Kazakhstan Relations

Bipartisan U.S. Congressional Visit Highlights Expanding Partnership with Kazakhstan

A bipartisan six-member delegation from the U.S. House of Representatives met with President Kassym-Jomart Tokayev in Astana on August 25, two days after Kazakhstan elected the first members of its new unicameral Kurultai. Tokayev called the timing symbolic and proposed closer dialogue between Congress and the new legislature. The delegation was led by House Ways and Means Committee Chairman Jason Smith and included Greg Murphy, Carol Miller, Ronny Jackson, Wesley Bell, and Ed Case. Smith said President Donald Trump had called him at 2 a.m., several hours before the meeting. Trump sent his regards, expressed appreciation for his relationship with Tokayev, and said he looked forward to the Kazakh president’s visit to Miami for the G20 summit. Smith said one purpose of the visit was to explore opportunities to expand economic ties and pursue a substantive bilateral dialogue. The visit reinforced Congress’s role in a relationship that has recently gained momentum at the presidential level. It also showed the breadth of the emerging agenda, from trade and investment to energy security, strategic supply chains, nonproliferation, and regional stability. A Delegation With Trade and Security Reach The delegation’s committee assignments closely matched that agenda. Smith, Murphy, and Miller serve on the Ways and Means Committee, which oversees trade and tariff legislation. Jackson serves on the Armed Services, Foreign Affairs, Intelligence, and Agriculture committees. Bell serves on the Armed Services, Foreign Affairs, and Oversight and Government Reform committees. Case sits on the Appropriations Committee and its Defense and Homeland Security subcommittees. That mix places delegation members on committees with jurisdiction over many of the issues now shaping the bilateral relationship. Congress can advance cooperation through trade legislation, appropriations, oversight, and support for American companies entering or expanding in Kazakhstan. Smith’s committee has jurisdiction over H.R. 1024, the bipartisan U.S.-Kazakhstan Trade Modernization Act, which would authorize the president to end the application of the Cold War-era Jackson-Vanik restrictions and extend permanent normal trade relations to Kazakhstan. Miller was among the bill’s original co-sponsors, although the issue was not mentioned in the public account of the meeting. Bipartisan congressional engagement could help translate recent presidential momentum into more durable institutional ties. Kazakhstan Has Made the U.S. Relationship a Priority From the Kazakh side, Tokayev has treated closer ties with Washington as a presidential priority. During his November 2025 visit to Washington, the two leaders welcomed commercial agreements worth more than $17 billion. Trump reaffirmed the U.S. commitment to the Enhanced Strategic Partnership, while the two presidents identified new areas for cooperation. The August 25 meeting also highlighted Kazakhstan’s support for the Abraham Accords and the Board of Peace, as well as the countries’ longstanding work on nuclear security and nonproliferation. Trade, investment, advanced technology, science, education, and culture were also discussed. Tokayev’s proposal for closer dialogue between Congress and the Kurultai would strengthen the parliamentary channel alongside the relationship’s presidential and executive-level diplomacy. In January, Tokayev appointed veteran diplomat Erzhan Kazykhan as his representative for negotiations with the United States on priority bilateral issues....