OREANDA-NEWS. February 02, 2010. 78.4 bln. kWh (down 2% against 2008) of electricity was produced and 77.9 bln. kWh (down 3.3%) was consumed in Kazakhstan in 2009. Affected by the crisis, electricity consumption was decreasing since the end of 2008. However 10-month negative trend in 2009 (5.9% drop) has been marked by 8.6% rise in November against the same period in 2008. The positive trend of electricity consumption was referred to growing production in industrial sector. The positive development continued in January this year, which allows expecting that consumption will grow 5.5% up to 82.2 bln. kWh, and electricity production will rise 7.1% up to 84 bln. kWh.

Development of the National Power Grid and Implementation of KEGOC Investment Projects

On 22 February 2009 the new 500 kV Zhitikara-Ulke transmission line L-5740 was put into operation. This interregional 500 km line was constructed based on the private-public partnership under the 30-Corporate Leaders State Program. Owing to the successful implementation of this breakthrough project, the consumers of Aktobe Oblast gained access to cheep electricity from domestic power sources and became independent from the cross-border supplies.

On 17 September 2009 in Pavlodar Oblast, Nursultan Nazarbayev, the President of Kazakhstan, performed a ceremonial commissioning of the new 500 kV transmission line for North-South Kazakhstan Transit. This breakthrough project for construction of 1117 km lines was completed by KEGOC ahead of schedule and became a major milestone for implementation of the Kazakhstan energy independence policy. The doubled capacity of the new lines (from 630 to 1350 MW) significantly increased availability of power supply to the consumers of Kazakhstan National Power Grid in zone South in the current winter period and prevented sharp increase of electricity tariffs in Almaty Oblast.

On 12 November 2009, Loan and Guarantee Agreements were signed for Moinak Electricity Transmission Project between IBRD and KEGOC to the amount of USD 48 mln.

In 2009 KEGOC has completed implementation of the major components for Kazakhstan Electricity Transmission Rehabilitation Project, Phase I, and proceeded with inception of Kazakhstan Electricity Transmission Rehabilitation Project, Phase II.

In pursuance of the Minutes of Meeting of the Republican Budget Committee dated 19 October 2009 supported by the Sole Shareholder, the National Welfare Fund Samruk-Kazyna received KZT 19.697 bln. to increase the authorized capital of KEGOC.

The additional capitalization shall allow the Company to launch Alma Electricity Transmission Project (tentative value is KZT 16.7 bln.) and Moinak Electricity Transmission Project (tentative value is KZT 3 bln.).

International Cooperation

In September 2009, Kazakhstan, represented by KazEnergy Association of Oil&Gas and Energy Organizations, became a member of the World Energy Council (WEC). This esteemed international organization has about 90 member-countries, which gives Kazakhstan a possibility of direct participation in development of the world-wide energy security measures, and grants an access to the data base of researches and state-of-the-art technologies.

One of the main operation priorities of KEGOC as a System Operator is cooperation with the neighboring power systems. In pursuance of the Interstate agreement for securing the parallel operation of the Unified Power Systems of Kazakhstan and Russia dated 20 November 2009, the Kazakhstani party has prepared and forwarded the agreements on power system parallel operation, balancing electricity procurement, and electricity transit. It became especially topical on the background of the capacity missing after Sayano-Shushenskaya Hydro Power Plant disaster and relationships emerging within the single customs area.

Financial Indicators

Total consolidated Company income in 2009 topped KZT 37.6 bln., which is 12.7% or KZT 4.2 bln. higher than the same in 2008.

The operational income makes KZT 32.7 bln. (up KZT 1.7 bln. ). Affected by the general macroeconomic indicators of 2009 the amount of electricity transmission services dropped 12%, dispatching services dropped 4%, electricity production-consumption balancing services dropped 2%, which lowered the company income by KZT 3.5 bln.

The consolidated expenses in 2009 made KZT 42.1 bln., which is KZT 14.5 bln. or 53% higher than 2008. The amount of KZT 10.0 bln. results from exchange rate difference after Kazakhstan tenge devaluation.

The consolidated negative profit of KEGOC in 2009 made KZT 4.6 bln. In 2008 the Sole Shareholder received KZT 746.0 bln. of dividends (10% of the Company’s net income). In 2007 this amount was KZT 136.6 mln.

Figures and Facts:

As at 1 January 2010 KEGOC is the owner of 310 transmission lines of 0.4–1150 kV with the circuit length of 24.5 ths km including:

1. 1150 kV — 1421 km;

2. 500 kV — 6420 km;

3. 220 kV – 15966.5 km;

4. 110 kV — 558.7 km;

5. 35–0.4 kV — 135.3 km.

The maximum electrical load of 12315 MW in the Unified Power System of Kazakhstan was reported on 25 December 2009 (previous record of 12291 MW was set in December 2007 and lasted almost 2 years), power plant generation – 11627 MW. Capacity deficit in zone South (1 438 MW) was covered by the power flow of 1112 MW from the North and 326 MW from Central Asia.

As at 1 January 2010 the total installed capacity in Kazakhstan reached 19127 MW. New generation capacities of 105 MW were commissioned in 2009 including: Zhanazholskaya Gas Turbine Power Plant, SNPS-AktobeMunaiGaz JSC – 33.8 MW (3х11.25 MW); Karatalskaya Hydro Power Plant 3 – 4.4 MW (2х2.2 MW); KazakhMys Corporation GRES Power Plant - 55 MW; Ekibastuzskaya Heat and Power Plant – 12 MW.