S. Korea may replace Russia in Kazakhstan’s thermal plant projects

Kazakhstan explores South Korean, Chinese partners for $2.4 billion, three-plant project including Semey

Kazakhstan may replace Russia with South Korean and Chinese companies in the construction of three new thermal power plants, according to reports.

A view of the Karabatan combined cycle power plant completed by Doosan Enerbility in Kazakhstan in 2020. /Doosan Enerbility

Russia’s Interfax news agency reported on July 9 that “South Korean and Chinese firms could participate in the construction of three thermal power plants in Kazakhstan, and negotiations are ongoing with all potential contractors.”

Citing Kazakh Deputy Energy Minister Bakytzhan Ilyas, Interfax said, “Negotiations are underway through Samruk-Energy, and talks are ongoing with other potential developers who can meet environmental requirements and modern energy efficiency standards.”

The report added that “potential candidates include energy companies from South Korea and China and there are several options.”

Bakytzhan Ilyas, Deputy Minister of Energy of Kazakhstan

In April, Kazakhstan officially announced plans to build three thermal power plants in the cities of Semey (360MW), Ust-Kamenogorsk (360MW), and Kokshetau (240MW), with a total value of $2.4 billion (about 3.29 trillion won). The project was originally to be carried out on a turnkey basis by Russian state-owned utility Inter RAO, with the Kremlin pledging financial support.

However, after issues arose regarding Russia’s financing of equipment exports for the project, the Kazakh government began considering alternative partners from South Korea and China.

Back in May, Kazakh Deputy Prime Minister Roman Sklyar publicly said, “There have been problems with Russia’s funding for the equipment needed in power plant construction and operation,” adding, “Kazakhstan will seek new investors.”

Thermal power accounts for 80% of Kazakhstan’s electricity generation, but over half of the facilities are more than 30 years old, highlighting the urgent need for modernization.

Experts believe South Korea and China could benefit from the situation, especially as the Kazakh government is showing strong determination to complete the projects on time.

South Korea’s Doosan Enerbility is considered a strong contender. The company completed the Karabatan combined cycle power plant in 2020 and signed a 1.15 trillion won contract last year to build a similar plant in Shymkent.

In June, Doosan also signed a Memorandum of Understanding (MOU) with Kazakhstan’s state-run Samruk-Kazyna (finance) and Samruk-Energy (energy) to supply environmental systems for two aging power plants and three new ones.

Samruk-Energy is a state-owned utility that supplies 32% of Kazakhstan’s electricity.