KazakhstanFutures, Reports

Zhanatas: A Test Case for International Financing in Kazakhstan’s Green Development

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Kazakhstan is far too often seen through simplistic lenses –frequently labeled as the center of a ‘new great game’ of geopolitical competition over the future of Eurasia or as an ex-Soviet petrostate whose political economy faces major challenges as oil demand is set to decline. Neither description encompasses the complexities of Kazakhstan’s geopolitical position or the state of the challenges, and opportunities, that will shape Kazakhstan’s future. That is not to say the two clichés are not representative of certain factors in shaping Kazakhstan’s future, but rather that such oversimplified descriptions can obscure efforts to develop an understanding of the country’s political and economic environment.

This paper aims to highlight how Kazakhstan’s largest wind power project, the Zhanatas Wind Farm, has been developed and how the success of the project challenges these fundamental clichés. The Zhanatas Wind Farm is a 100 MW renewable energy project in the Jambyl (Zhambyl) region in southern-central Kazakhstan. It is not only a flagship project for fueling Kazakhstan’s energy transition but also a key development project for the town of Zhanatas, a town developed in the 1960’s by Soviet authorities as a phosphate mining hub that has experienced substantial declines in population since Kazakh independence.

The project is notable not just for its contribution to addressing Kazakhstan’s energy challenges and highlighting its commitment to the green agenda but also because of its unique position as a projected backed by international official sector financial institutions that are often seen as uncooperative at best, and antagonistic at worst, because of their respective political

For the Zhanatas Wind Farm received support not only from the Kazakh government and domestic private actors, but also financing from the London-based European Bank for Reconstruction and Development (EBRD), whose largest capital contributor is the United States, and from the Beijing— based Asian International Investment Bank (AIIB), whose largest shareholder is the People’s Republic of China. The former is a core development finance institution of the Western-backed economic order whereas the latter is one of the core institutions in developing China’s Belt and Road Initiative. This paper aims to highlight the project as an example of how further international cooperation between international financial institutions can help Kazakhstan and other countries develop similar resources and accelerate their own green agendas, as well as support domestic markets.

The paper begins with an overview of Kazakhstan’s energy market and green agenda in order to highlight the challenges that Kazakhstan faces and how projects like Zhanatas help to address them. It then examines the project itself and the respective partners involved before considering the lessons learned from the project for similar efforts and potential expanded international cooperation.

This research was carried out as part of the Oxus Society for Central Asian Affairs – The Kazakhstan Futures Program (January-September 2023) with financial support from the U.S. Embassy in Kazakhstan