ASTANA 2016

1 BENCHMARKING: International experts opinion and recommendations ,700 TWh According to international experts global energy resources demand will grow for 1/3 by 2030, which is 3 times faster than the global population growth ,700 TWh According to international experts energy efficiency increase in buildings is a key factor in global energy conservation 28 % Transport 31 % Industry 41 % Buildings 1 % Decrease = 496,000,000 Oil barrels in a line, that can circumnavigate the Earth 10 times JSC ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE

2 ENERGY INTENSITY GDP GLOBAL COMPARISSON KAZAKHSTAN ENERGY INTENSITY GDP (PPP) Retrieved from Key World Energy Statistics, IEA, 2014 Energy consumption increase due to industrial development growth GDP growth decrease due to oil price decrease Energy Intensity Growth GDP of the Republic of Kazakhstan Kazakhstan TurkmenistanBelarus UkraineAzerbaijan toe / $1000 GDP PPP Energy intensity of RK in comparison with other countries toe./ $ 1 mln. GDP (по курсу) Retrieved from Key World Energy Statistics, IEA, 2014 АО «ИНСТИТУТ РАЗВИТИЯ ЭЛЕКТРОЭНЕРГЕТИКИ И ЭНЕРГОСБЕРЕЖЕНИЯ» JSC ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE Ukraine Uzbekistan Russia Kazakhstan China Canada USA Germany UK Norway

3 STATE POLICY IN THE ENERGY CONSERVATION FIELD IMPLEMENTATION OF THE 59 STEP OF THE NATION PLAN «100 CONCRETE STEPS» STRATEGIC INVESTORS ATTRACTION INTO THE ENERGY CONSERVATION FIELD THROUGHT INTERNATIONALLY ACCEPTED ENERGY SERVICE CONTRACTS MECHANISM Their main objective: stimulating development of private energy service companies for providing complex services in energy conservation field with own expenses reimbursement возмещением and acquisition of financial profit from factual reached energy consumption savings Center of competence in development of energy saving and energy efficiencyпcy on the base of JSC«Electric power and energy saving development institute» 100 STEPS In November 2015 with the acceptance of the «About corrections and additions into some legislative acts or industrial–innovative policy question» Law unprecedented measures supporting development of the energy service mechanism were made. State Energy Registry Energy Audit and Expertise Energy efficiency label determination Events plan Energy Efficiency Map JSC ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE

АО «ИНСТИТУТ РАЗВИТИЯ ЭЛЕКТРОЭНЕРГЕТИКИ И ЭНЕРГОСБЕРЕЖЕНИЯ» PPP SERVICE CONTRACT FOR ENERGY EFFICIENCY PROJECTS PPP SERVICE CONTRACT – PPP contract that includes providing handling services to the public – private partnership objects. PPP OBJECTS – property, property complexes, designing, construction, creating, reconstruction, modernization and exploitation of which is utilized in the framework of PPP project implementation. PPP objects include operations (services) and innovations, which should be included in the framework of PPP project implementation. PPP SERVICE CONTRACT – PPP contract that includes providing handling services to the public – private partnership objects. PPP OBJECTS – property, property complexes, designing, construction, creating, reconstruction, modernization and exploitation of which is utilized in the framework of PPP project implementation. PPP objects include operations (services) and innovations, which should be included in the framework of PPP project implementation. Private Partner (ESCO) PPP Object Public Partner (CEB and LEB) Public Partner (CEB and LEB) PPP Service contract 1) PPP object access; 2) Reimbursement through expenses compensation and income receiving sources; 3) Providing State support (consumption guarantee) 1) PPP object access; 2) Reimbursement through expenses compensation and income receiving sources; 3) Providing State support (consumption guarantee) 1) Investments 2) PPP Object modernization 3) PPP Object maintenance 4) PPP Object access return to the Client 1) Investments 2) PPP Object modernization 3) PPP Object maintenance 4) PPP Object access return to the Client JSC ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE 5

4 National electric power and energy saving development institute Formation and management of the Energy Efficiency Map State Partners (Customer) Projects in the field: Budget sector and и quasi– governmental sector State Partners (Customer) Projects in the field: Budget sector and и quasi– governmental sector Search, selection and financing of the projects Private Partners Energy service companies ESCO, investors Private Partners Energy service companies ESCO, investors Informing, Accompanying, Consulting PPP Contract (ESCO) Energy efficiency map Project expertise, energy audit, calculations, technical consulting, monitoring and evaluation Cooperation with financial institutions in financing and project selection ROLE AND PLACE OF THE NATIONAL ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE Cooperation with NEC RK in development of typical project documentation and PPP contracts, participation in private partners registry work National Entrepreneurs Chamber RK JSC ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE

6 EXAMPLE: INSTITUTIONAL PPP IN ENERGY CONSERVATION FIELD FOR REGIONS PRIVATE PARTNER ESCO (Investors) PRIVATE PARTNER ESCO (Investors) PPP Objects – budget organizations of the region PPP Objects – budget organizations of the region PUBLIC PARTNER (Regional Akimats) PUBLIC PARTNER (Regional Akimats) Transfer through Social-Entrepreneurial Corporations of the rights to control PPP Objects for energy saving projects implementation PPP Project Company (With participation of Public and Private partners) in management of Private partner (ESCO) PPP Project Company (With participation of Public and Private partners) in management of Private partner (ESCO) Governmental Support and Reimbursement Investment and Management Modernization and Services JSC ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE

World Bank Grant 80 Schools 20 Hospitals City lighting in 5 major cities EBRD Energy efficient lighting project, Almaty city EBRD JSC “Kazakhstan Railroads” energy efficiency project Investments – $34 million Energy savings – 34 million kWh Economic Effect – $ 4 million Payback Period – 9 years Period: Period: Energy savings – 120 million kWh Economic Effect – $ 10 million Payback Period – 4 years PILOT PROJECTS Investment – $40 million Period: Investments – $21,7 million JSC ELECTRIC POWER AND ENERGY SAVING DEVELOPMENT INSTITUTE 7 INTERNATIONAL COOPERATION

Daniyar Tanatarov