Kazakhstan – Rising Star for Public-Private Partnerships (PPPs) Shaimerden Chikanayev London International PPP Finance Summit 2018 4 July 2018

WHY KAZAKHSTAN? Kazakhstan’s oil, gas, coal and uranium and others commodities reserves are among the ten biggest in the world Strategic geographical location (e.g. China’s Belt and Road initiative, a door to the Eurasian Economic Union, a single market of 183 million people) Good legal framework (special PPP Law and Concession Law) Strong political will to support PPPs (KPIs for regions – 5 projects per year as a minimum) Kazakhstan’s climbed the World Bank’s Ease of Doing Business index and is now ranked 36th Strong support of Kazakhstan by MDBs (EBRD, ADB, IFC, IDB, EABR, AIIB) attracting private and international financial investment

WHAT IS LEGAL FRAMEWORK FOR PPPs? Please refer to general overview of the legal framework of PPPs in Kazakhstan: http://www.gratanet.com/up_files/PPP_Kazakhsta n.pdf Please refer to unofficial translation of the PPP Law: http://www.gratanet.com/up_files/PPP_Law_Kaza khstan.pdf

Concession Law v PPP Law Bankability Requirement Concession Law PPP Law Legislative certainty - limited service BTO   Legislative certainty – full service BTO Access to tax concessions Clear right to terminate International arbitration by Kazakh SPV Protection against currency exchange risk Direct negotiations (no tender required) Ability to select foreign governing law

What to expect in 2018? Light Rail transit in Almaty - $ 300 mln Almaty railway bypass - $ 297 mln Asfendiyarov Medical university project in Almaty - $ 115 mln Shymkent bypass toll road - $ 300 mln Karaganda Medical University project - $ 100 mln

#1 - Light Rail transit in Almaty Contractual structure – 22.9 km light rail transit to be implemented under the PPP Law as a DBFOT. 50%/50% cofinancing by public and private partners. Population served – 2 million. Tentative timeline: July 2018 – the first phase of the tender; December 2018 – the second phase of the tender; May 2019 – signing of the agreement; 2022 – commissioning of the LRT line; 23 years – operation of the LRT line. Public partner – Akimat (mayor) of Almaty. Technical Assistance - EBRD Potential private partner - Itochu, Alstom, Siemens, Bombardier. Potential lenders – IFC, ADB, AIIB, ECAs.

#2 - Almaty railway bypass Contractual structure – 74.7 km railway to be implemented under the PPP Law as a BTO. Current status of the project – correction of the feasibility study (ТЭО) has been completed and positive approval of the Gosexpertise has been procured for it. Tentative timeline: November 2018 – tender announcement; Construction period – 2 years. Operation period – 27 years. Public partner – Ministry of Investments and Development (“MID”). Potential private partners –Turkish and other construction companies. Potential lenders – EBRD, IFC, ADB, AIIB, ECAs etc.

#3 - Asfendiyarov Medical university project in Almaty Contractual structure – 300 bed hospital to be implemented under the Concession Law as a Build- Transfer- Maintain. Tentative timeline: 2019 – tender; 2020 – start of construction; 2023 – commissioning of the hospital; 2023-2035 – operation. Public partner– Ministry of Healthcare. Potential private partners – construction companies. Potential lenders – IFC, ADB, AIIB, ECAs etc. Technical assistance – EBRD, KPPF.

#4 - Shymkent bypass toll road Contractual structure – 48 km length two road bypasses around Saryagash and Shymkent to be implemented as BTMO. Tentative timeline: VI quarter 2018 – tender; 2019-2023 – construction period; 2022-2039 – operation period. Public partner– Ministry of investments and development. Technical Assistance – ADB. Potential private partners – construction companies. Potential lenders – EBRD, IFC, AIIB, ECAs etc.

#5 - Karaganda Medical University project Subject of the project – construction, equipment and technical operation of the hospital under the Concession Law. Tentative timeline: 2019 – tender; 25 years – operation period. Sources of cost recovery and income generation – availability payment (compensation of operational costs, compensation of investment costs, remuneration for operation). Public partner– Ministry of Healthcare. Technical assistance – Asian Development Bank.

Shaimerden Chikanayev Partner, GRATA Law Firm Almaty, Kazakhstan E-mail: schikanayev@gratanet.com Mobile: +77017878020 17.01.2019