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Skyward Ambitions: Navigating the Growth and Challenges of Kazakhstan’s Aviation Industry

According to the Concept for the Development of the Transport and Logistics Potential of the Republic of Kazakhstan by 2030, the development of the country's civil aviation industry should be conducted in three key areas: flight safety, route network development, and infrastructure modernization. So, how do things stand today in regard to fulfilling these tasks? As previously reported by TCA, Uzbekistan has far surpassed Kazakhstan in direct air routes to key countries; from Tashkent, one can even fly to New York, which remains an elusive dream for Kazakhstanis. In 2011, Air Astana approached Boeing regarding the purchase of three 787 Dreamliner aircraft. However, when approached by TCA in August 2024, Air Astana stated that "since 2011, there have been several macroeconomic, global changes, which affected the market situation, and the timing of aircraft deliveries has been revised, including delays on the part of the manufacturer." Safety In July of this year, a landmark event for the aviation industry occurred when President Kassym-Jomart Tokayev vowed to open the Permanent Mission of Kazakhstan to the International Civil Aviation Organization (ICAO). This was another step towards introducing advanced standards in the aviation industry, and a decision which is in line with the trend of removing all restrictions for domestic carriers on flights to the European Union from Kazakhstan. The issue was discussed at a meeting of the EU Flight Safety Committee, with the participation of representatives of the aviation authorities of 27 countries. Unfortunately, however, cases of safety violations in civil aviation in Kazakhstan are not decreasing. According to the Bureau of National Statistics, in 2023 there were 58 accidents in air transportation, compared to 47 in the previous year. In the last month alone, three incidents involving damage to planes occurred at Astana Airport alone. The causes were weather conditions, as well as the actions of the air harbor operator. Fortunately, there were no casualties. One of the most hotly debated problems in the aviation industry for many years has been the issue of construction in areas surrounding airports. Law enforcement are now taking measures to bring these areas into compliance. According to data from the Aviation Administration of Kazakhstan, in 2023, during an inspection by the General Prosecutor's Office, it was revealed that within the boundaries of airport safety zones, local executive bodies had allocated approximately 1,200 plots for the construction of residential, commercial and other facilities, on which more than 900 buildings have been erected. Over 100,000 different structures have been built within the territory of airfields without the approval of airport commissions (residential, commercial, industrial, etc.). The cities of Almaty, Shymkent, Atyrau, and Aktobe have seen the most serious cases of illegal construction. In order to establish clear requirements for the use of airfield territories, legislative amendments have since been introduced regarding the procedure for granting rights to plots located on such land. Air geography The air transportation market in Kazakhstan is growing: 8.3 million passengers traveled by air between January-July 2024. This constitutes a 14% growth when...

Energy Industry Atomic Energy Referendum Government Nuclear Energy

Kazakhstan Officially Backs Nuclear Power Referendum

The government of Kazakhstan has approved a draft resolution to hold a national referendum on constructing a nuclear power plant (NPP). The meeting, chaired by Prime Minister Olzhas Bektenov, discussed the prospects for developing nuclear energy in the country. Energy Minister. Almasadam Satkaliyev noted that the referendum will allow Kazakhstanis to make an important decision about the future of the country's energy security. Bektenov emphasized that Kazakhstan has mastered almost the entire cycle of nuclear fuel production and has experience with small reactors. However, the current shortage of energy capacity requires new solutions to avoid purchasing electricity from abroad. With the global abandonment of coal-fired power plants and the limited potential of renewable energy sources, the development of nuclear power is the most promising direction. According to the International Atomic Energy Agency, 415 nuclear power units operate worldwide, and 61 new units are under construction in 15 countries, including China and the UK. With its significant uranium resource base, Kazakhstan can ensure stable electricity tariffs and independence from raw material price fluctuations. Modern NPPs have a multi-level safety system that meets IAEA international standards. According to Bektenov, nuclear power should become the basis for Kazakhstan's energy-intensive economy, stimulating innovation and industry development. The draft resolution was supported unanimously. The Ministry of Energy and the Government Office were instructed to submit a draft decree to the Presidential Administration. Talks on constructing a nuclear power plant in Kazakhstan have been ongoing for many years; the idea of the need for a nuclear power plant first appeared after the closure of the Soviet reactor in Aktau in 1999. Since then, the country has repeatedly raised questions about the development of nuclear power, especially in the context of improving energy security and climate change resilience. However, public opinion remains divided; many people in the country remember the consequences of nuclear tests at the Semipalatinsk test site and fear environmental risks. In 2021, discussions about constructing a nuclear power plant intensified when a possible site for Kazakhstan's first atomic power plant began to be considered in Almaty Oblast, near the village of Ulken. These plans sparked lively public debate and protests among residents and environmentalists. President Kassandra-Jomart Tokayev proposed a national referendum to give citizens a say on this critical issue.

Industry China Economy Astana Regional Development Kazakh Invest

China to Build a Trade and Industrial Park in Astana

Last week, Xinjiang Hengyuan Investment Management Co., Ltd., based in the Chinese city of Baiyang, and Kazakh Invest signed a memorandum to implement the construction of a trade and industrial park, spanning 50 hectares, in Astana. As reported by Kazakh Invest, the project is expected to positively impact the development of critical sectors of Kazakhstan's economy, including logistics, warehousing, processing, trade, and real estate management. The project will also attract Chinese trade and manufacturing companies to operate in Kazakhstan. Yan Wang, Deputy Mayor of Baiyang, commented: "We are entering this project with great enthusiasm, seeing the enormous potential of Kazakhstan as a key logistics hub in the region. Creating the Kazakhstan-China Trade and Industrial Park in Astana will significantly expand the country's logistics capabilities and strengthen its role as an important transit corridor between East and West. We believe this project will catalyze attracting new trade flows and manufacturing." Yerzhan Yelekeyev, Chairman of the Board of Kazakh Invest, added: "This project opens up new horizons for cooperation between Kazakhstan and China. The creation of the Kazakhstan-China Trade and Industrial Park in Astana will not only accelerate the development of key sectors of our economy -but-also create numerous new jobs.”

International Relations Bilateral Relations Energy Afghanistan Industry Economic Cooperation

Uzbekistan and Afghanistan To Work Together on Mining Projects

Afghanistan and Uzbekistan have signed five agreements related to mining projects in Afghanistan. The agreements are for the exploration of hydrocarbon fields in the Afghan-Tajik oil and gas basin, the development of copper and gold deposits in the Qandaran district of Zabul province, iron extraction in the Hesh district of Bamyan province, and hydrocarbon resources in the Tuti-Maidan district of Faryab province. There are also plans to build a 120-megawatt gas-fired power plant in Faryab province. These agreements, totaling $1.15 billion, were part of a more comprehensive package of 35 agreements and memorandums of understanding signed between the two countries. These agreements amount to an Uzbek investment in Afghanistan of over $2.5 billion. The latest round of cooperation points to the strengthening of economic ties between Tashkent and Kabul, which is especially important given the region's current geopolitical challenges and financial instability. These agreements can also significantly impact Afghanistan's economic development by providing needed resources and creating jobs in crucial regions of the country.

Finance Energy Industry Standard & Poor's Rogun HPP

S&P Estimates That Rogun Hydroelectric Power Plant Will Cost Over $6 Billion To Finish

The ratings agency S&P has estimated the cost of completing the construction of the Rogun hrydroelectric power plant in Tajikistan at $6.4 billion. The Tajik government is negotiating with a consortium of multilateral and bilateral creditors to provide a financing package covering about 50% of these costs. The other half of the financing is expected to come from the state budget and revenues from the plant. S&P analysts said the initial external financing package includes $1.73 billion in semi-concessional loans, $850 million in grants, and $390 million in soft loans. According to S&P, the Rogun hydroelectric power plant (HPP) already produces electricity at 10-15% of its total capacity. In 2024-2035, the income from electricity is expected to be $1.1 billion, which will be invested in further construction of hydroelectric power plants. In 2016, during the international tender to select the main contractor for the dam's construction, the plant's value was announced as $3.9 billion. In 2022, the Tajik Ministry of Energy announced that more than $5 billion would be required to complete the project. In February 2023 the ministry estimated that the plant would cost $6.2 billion to complete. Then, more than $4 billion were allocated, including through the sale of shares of Rogun HPP OJSC (890 million TJS), Eurobonds ($500 million) and the remaining part from the state budget. The Times of Central Asia has been reporting on the loans allocated for the plant's construction.

Export/Import Industry Oil and Gas Oil refinery hydrogen

Uzbekistan to Start Industrial Production of Hydrogen

Sanoat Energetika Guruhi (Saneg), one of the largest private oil and gas companies in Uzbekistan, announced on August 21 that the Ferghana Oil Refinery is to produce industrial hydrogen by transferring its related assets to Air Products, a world-leading industrial gases company. The Ferghana Refinery is currently undergoing comprehensive modernization to both enhance its output and help the government of Uzbekistan diversify energy sources by industrializing hydrogen production. Saneg's operations at the refinery currently account for about 80% of the country’s oil production and 22% of its proven gas reserves and the acquisition its industrial hydrogen assets for $140 million by Air Products, promises to widen the commercial use of the product in Uzbekistan. Saneg's founder Bakhtiyor Fazilov commented: "This agreement with Air Products represents another significant step forward in our long-term modernization plans for the Ferghana Refinery with the world leader in hydrogen production… and contribute to one of the Uzbekistan government’s main priorities, strengthening our nation’s energy security by increasing domestic hydrogen supplies." Reporting on the transaction, Seifi Ghasemi, Chairman, President, and CEO at Air Products, stated: "As the world’s largest hydrogen supplier and a leader in hydrogen fueling infrastructure, Air Products’ solutions bring safe and reliable hydrogen to hydrogen-powered applications worldwide. Our advanced technology and expertise in hydrogen production will enhance the refinery's capabilities and support the growth of Central Asia's oil and gas industry. This will also aid Uzbekistan in achieving more sustainable and energy-independent operations, contributing to a cleaner future for the Republic."