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Geological Exploration

Kazakhstan’s New Subsoil Law Opens Underexplored Territories to Investors

Kazakhstan has introduced a new subsoil use law aimed at unlocking the potential of underexplored areas and attracting increased investment in the energy sector. According to the Ministry of Energy, the legislation establishes a special contract type for exploration and production in previously underexplored territories, offering significantly enhanced terms for investors. Under the new framework, companies that independently finance geological exploration will be granted priority rights for subsequent subsurface use. The Ministry expects this provision to dramatically boost geological activity and accelerate the discovery and development of new hydrocarbon reserves. The legislative amendments also streamline operational procedures. Subsoil users are now permitted to conduct additional exploration at depths beyond 5,000 meters under existing production contracts, without altering the surface boundaries. This change enables faster exploration of deep reserves while reducing bureaucratic delays. Officials say the updated legal framework is designed to improve Kazakhstan’s investment climate and provide new incentives for capital inflow into the extractive industries. According to The Times of Central Asia, investment in geological exploration exceeded $150 million in the first nine months of 2025, following $285 million in 2023 and $304 million in 2024. As of now, Kazakhstan has 324 active hydrocarbon subsoil use contracts, including 15 for exploration, 170 for combined exploration and production, 131 for production, and 8 production sharing agreements (PSAs), according to the Ministry of Energy.

Oil

Kazakhstan Seeks Foreign Investors for Fourth Oil Refinery Project

Kazakhstan is intensifying efforts to launch its fourth major oil refinery and is actively seeking international investors for the project. The Ministry of Energy has confirmed that expanding oil refining capacity remains a top priority in the country’s long-term energy strategy. According to the ministry, Energy Minister Yerlan Akkenzhenov participated in a recent meeting of the KAZENERGY Association Council, an umbrella organization uniting leading players in Kazakhstan’s oil, gas, and energy sectors. He reiterated that the national Concept for the Development of the Oil Refining Industry for 2025-2040 includes both the modernization of the country’s three existing refineries and the construction of a new facility with a projected processing capacity of up to 10 million tons of oil per year. To help secure funding, Akkenzhenov proposed that KAZENERGY organize a dedicated roadshow to attract potential investors, particularly from OECD member countries. Kazakh Prime Minister Olzhas Bektenov recently confirmed in response to a parliamentary inquiry that the proposed refinery, with a capacity of 10 million tons annually, could be completed by 2040. One likely location is the Mangystau region, close to key oil production sites. However, this is just one of four options under consideration. The final decision will depend on factors such as the growth of electric vehicle adoption, shifting fuel consumption patterns, and long-term export forecasts. The planned refinery would produce aviation fuels including TC-1 and Jet A-1. Demand for jet fuel is expected to surge with the development of an international aviation hub in Mangystau, where consumption could rise from the current 35,000 tons to 120,000-130,000 tons per year. Currently, Kazakhstan produces between 650,000 and 700,000 tons of jet fuel annually, while domestic demand hovers around 1 million tons. To bridge the gap, the country imports approximately 350,000 tons, roughly 30-35%, from Russia, highlighting the strategic importance of boosting domestic refining capacity. As previously reported by The Times of Central Asia, the updated industry roadmap envisions increasing national oil refining volumes from 18 million to 39 million tons per year. The expansion will require between $15 billion and $19 billion in investment. Kazakhstan’s three largest refineries are located in Pavlodar, Atyrau, and Shymkent. In March, the Agency for the Protection and Development of Competition (AZRK) recommended partially privatizing the Pavlodar and Atyrau facilities to enhance operational efficiency and attract private investment. Analysts say that constructing a new refinery is critical not only for reducing Kazakhstan’s reliance on fuel imports, but also for enhancing its export capabilities amid intensifying competition in the global energy market.

Economic Growth

Kazakhstan Presents “Growth Case” to Global Investors in London

Kazakhstan is deepening its engagement with UK capital markets. At the Kazakhstan Capital Markets Day 2025 conference in London, Deputy Minister of National Economy Asan Darbayev outlined the country’s economic growth strategy and measures to enhance its investment climate. Speaking during the panel session “Sustainable Economic Growth and Financial Sector Development,” Darbayev highlighted that Kazakhstan’s real GDP grew by 6.3% in the first nine months of 2025, one of the strongest performances in recent years. The government’s medium-term target is to reach a GDP of $450 billion by 2029. Infrastructure development remains central to Kazakhstan’s strategy to position itself as a key transit and investment hub in Eurasia. Currently, five international rail corridors and eight road corridors are operational, including the strategically vital Middle Corridor. This infrastructure forms the backbone of Kazakhstan’s growing export and import routes and supports the localization of industrial production. Darbayev reaffirmed Kazakhstan’s standing as a reliable and creditworthy partner. The country maintains investment-grade ratings from S&P, Fitch, and Moody’s. Notably, S&P upgraded its outlook to “Positive,” while Moody’s raised Kazakhstan’s rating to Baa1 last year. To attract long-term investment, Kazakhstan offers a range of incentives, including investment contracts, tax and customs preferences, and legislative stability guarantees for up to 25 years. Investor engagement is facilitated through a digital investment platform operating on a “single window” principle, supported by the Investment Attraction Council. The council is tasked with removing administrative barriers and accelerating project approvals. A major draw for international capital is the Astana International Financial Centre (AIFC), which operates under English common law. The AIFC hosts more than 3,500 companies from over 80 countries, with cumulative investments exceeding $14 billion. The center’s emphasis on transparency and legal protections has made it a trusted destination for global investors. Kazakhstan continues to attract investment in oil and gas, engineering, transportation, and the food and beverage sectors. Major partners include Chevron, ExxonMobil, Shell, GE Transportation, Hyundai, KIA, Coca-Cola, Danone, Carlsberg, and Lactalis, reflecting interest in high value-added projects and technology localization. During the forum, Darbayev also held meetings with executives from Mitsubishi UFJ Financial Group (MUFG) and Morgan Stanley Investment Management (MSIM), further promoting Kazakhstan’s economic agenda to global financial leaders.

Foreign Investment

Kazakhstan Courts Global Investment with Critical Minerals and Green Energy Push

Since gaining independence, Kazakhstan has established itself as a reliable global supplier of raw materials. Today, the country's economic structure is evolving as it positions itself as a high-added-value hub for industrial production. These developments are closely tied to Kazakhstan’s transition to a green economy and its role in global supply chains for critical minerals. Creating a Favorable Investment Climate Kazakhstan has taken significant steps to create a transparent, predictable investment environment and enhance its business competitiveness. Among these measures is the introduction of investment agreements that guarantee legislative stability for up to 25 years for large projects exceeding $60 million. The legal framework has also undergone reforms, procurement procedures have been modernized, and judicial reforms have created separate cassation courts and redefined the Supreme Court’s role. These reforms have drawn the attention of international investors and rating agencies. In 2024, Moody’s upgraded Kazakhstan’s long-term credit rating to the highest level in the country's history, citing macroeconomic stability and policy predictability. In the first nine months of 2025, GDP grew by 6.3%, while investment in fixed capital rose by 13.5% to reach $26 billion. Moody’s analysts also highlighted Kazakhstan’s stronger economic outlook compared to other hydrocarbon-exporting nations, attributing this to ongoing reforms that enhance the country’s competitiveness. One key driver is the rapid development of the transport and logistics sector, particularly through the Trans-Caspian International Trade Route, also known as the Middle Corridor. This corridor is attracting foreign investors across a range of non-oil sectors, including automotive, pharmaceuticals, food production, and construction materials. Kazakhstan is also home to the Astana International Financial Centre (AIFC), a platform that operates under English common law. The AIFC offers tax exemptions, simplified labor regulations, and digital arbitration. It currently ranks first in Eastern Europe and Central Asia in the Global Financial Centres Index. More than 4,200 companies from 80 countries, including over 60 American firms, are registered with the AIFC. Strategic Projects Take Shape Kazakhstan’s diversification strategy and focus on critical minerals were prominently showcased during the 8th Kazakhstan Global Investment Roundtable (KGIR-2025), held in Astana in October. The event attracted over 1,000 participants from 55 countries, resulting in the signing of 49 agreements worth $7.5 billion. A key session focused on critical minerals and the energy transition, signaling the country’s long-term growth trajectory. Among the highlights was a meeting between the government and Mohammad Vahid Sheikhzadeh Najjar, CEO of FakoorSanat Tehran Engineering Co., to explore cooperation in mining and metallurgy, including new technologies for processing mineral raw materials. Sheikhzadeh Najjar noted that the global market for critical minerals, currently valued at $328 billion, is expected to double by 2032. He emphasized that Kazakhstan is well-positioned to lead this growth. Environmental initiatives, such as a project to process 55 billion tons of mining waste, offer additional economic potential. Meanwhile, Chinese investor Zhang Jintao, founder of Chengdu Sepmem Energy, proposed a long-term plan to develop an LNG cluster in Kazakhstan. The project envisions a nationwide network of LNG plants and supporting infrastructure to reduce emissions...

Tourism

New “Air Gates”: How Two Airports Will Transform Eastern Kazakhstan

The construction of new airports in the Katon-Karagai and Zaisan districts of eastern Kazakhstan is entering its final phase. For these remote region, once accessible only by winding mountain roads, the arrival of runways, terminals, and control towers marks a historic milestone. But these projects are more than just transportation infrastructure. They are poised to become engines of regional development, restoring the area's appeal to both tourists and investors. An Airport in the Mountains Katon-Karagai is the heart of Kazakhstan’s Altai region. Between the villages of Belkaragai and Ornek, a large-scale construction effort is underway to build a modern airport complex. Spanning 266 hectares, the project includes a 2,260 meter runway, a terminal, a command-and-control center, and state-of-the-art navigation and meteorological equipment. According to project manager Nurzhan Eskendirov, 80% of the work is now complete. “Next summer, we will lay the final layer of asphalt. This airport is not just a construction project, it’s a new chapter in the region’s history,” he told TSA. [caption id="attachment_38662" align="aligncenter" width="300"] @gov.kz[/caption] For local residents, the construction has become the event of the decade. Workers from across the country have joined the effort. “The nature here is simply amazing,” said one of the builders, Manash Baigonov. “I want people from all over the world to be able to see it.” Katon-Karagai is renowned for its pristine lakes, snow-covered peaks, and protected nature reserves. The airport will drastically reduce travel time, making the region far more accessible to tourists who previously faced hours of rugged road travel. Zaisan: The Eastern Gateway In the Zaisan district, another major airport project is nearing completion near the village of Satpay. The runway and apron are fully finished, the drainage system is being finalized, and terminal and control tower construction is ongoing. This airport is expected to play a vital role in expanding cross-border tourism and logistics. Currently, Zaisan receives about 20,000 tourists annually, a number that could increase four- to five-fold once the airport opens. Regular flights are planned to Ust-Kamenogorsk, Almaty, and Astana, with future international routes to Urumqi in China and Lake Kanass. This would position Zaisan as Kazakhstan’s “eastern gateway,” linking the country to China not only by road, but also by air. “The airport is creating new routes, but more importantly, it’s creating meaning,” said one of the project’s designers. “It’s not just a runway, it’s the take-off of a region.” [caption id="attachment_38663" align="aligncenter" width="300"] @gov.kz[/caption] From Roads to People Airport development is also driving broader infrastructure upgrades. A new road to the village of Urunkhaika on Lake Markakol, planned in partnership with China’s Heilongjiang Province Bada Road, will connect even more of Altai’s secluded landscapes to the broader transport network. Until now, many of these areas were accessible only by footpaths. These infrastructure projects are transforming not just the regional map, but daily life. In Katon-Karagai, which was once served only by narrow serpentine roads and sporadic buses, officials are now preparing for the arrival of investors, climbers, photographers, and nature lovers....

Eurobonds

Kazakhstan’s Strong Bond Sale Anchors Regional Capital Markets

The Republic of Kazakhstan once again captured global investor attention with its highly successful sovereign bond issuance in October 2025, underscoring its status as Central Asia’s benchmark borrower. The Ministry of Finance sold a $1.5 billion five-year Eurobond at a record-low 4.412% yield, about 85 basis points above U.S. Treasuries, after attracting nearly $4.4 billion in orders from a geographically diverse investor base spanning Europe, the U.S., and Asia - almost three times oversubscribed. Strong Market Reception and Competitive Pricing This five-year issue achieved the lowest yield in Kazakhstan’s independent history and was one of the tightest-priced five-year sovereign bonds among investment-grade peers, pricing inside higher-rated Poland, and modestly above Qatar’s comparable five-year yield. The Finance Ministry credited the result to investors’ confidence in Kazakhstan’s macroeconomic management and fiscal credibility, strengthened by the country’s ongoing budget and tax reforms enacted in 2025. These measures have reinforced perceptions of policy discipline and institutional reliability, enabling Kazakhstan to secure funding at exceptionally low costs. June 2025: Dual-Tranche Success In June 2025, Kazakhstan executed a $2.5 billion dual-tranche Eurobond comprising a 7-year $1.35 billion note at 5.0% and a 12-year $1.15 billion note at 5.5%. Investor demand was exceptional, with orders roughly twice the issue size from global funds across Europe, the U.S., and Asia. The transaction priced tightly against comparable BBB sovereigns, reflecting market confidence in Kazakhstan’s low debt levels, ample reserves, and consistent reform momentum. Together, the June and October offerings have demonstrated Kazakhstan’s ability to tap international markets repeatedly in 2025 on favorable terms, even amid global volatility. Fiscal Strength and Ratings Support Kazakhstan’s strong market performance rests on a robust fiscal foundation and solid credit ratings. Fitch Ratings has affirmed Kazakhstan’s long-term foreign-currency issuer default rating at ‘BBB’ with a Stable Outlook, noting the country’s low government debt - around 25% of GDP - and substantial sovereign net foreign assets supported by the National Fund and foreign-exchange reserves. Combined reserves and National Fund assets total roughly $93 billion, equal to about 31% of GDP. S&P Global Ratings, which upgraded Kazakhstan’s outlook to Positive in August 2025, forecasts 5.5–5.6% GDP growth and has commended progress in deficit reduction and institutional reform. The agency noted that Kazakhstan’s new Budget and Tax Codes, along with tighter fiscal rules and improved oversight of quasi-fiscal activities, are expected to strengthen fiscal consolidation and institutional transparency. These reforms, together with the country’s moderate debt burden and substantial sovereign assets, have helped sustain investor confidence. Kazakhstan’s ability to issue Eurobonds at yields tighter than some A-rated peers demonstrates that credibility in practice, and market participants now view the country as the regional benchmark sovereign in Central Asia. Uzbekistan: Reform Progress, Higher Yields In February 2025, Uzbekistan raised roughly $1.5 billion equivalent through a multi-currency sovereign issue — a $500 million 7-year U.S. dollar tranche at 6.95%, a €500 million 4-year euro tranche at 5.1%, and a UZS 6 trillion 3-year local-currency note at 15.5%. Total demand reached about $4.2 billion, nearly 2.8 times oversubscribed, underscoring strong...