VI. KAZENERGY Eurasian Forum Wind energy development in the emerging markets including Kazakhstan Andreas Thomas, Senior Vice President Business Development October 2011

Wind energy developments in Kazakhstan2 Wind energy developments in emerging markets Factors for market development 1.Wind as natural and renewable resource 2.Political commitment and support to start the development of wind energy market 3.Legal framework with laws, incentive systems and procedures 4.Technical conditions – national grid system 5.Partners and conditions for financing projects and related businesses

Wind energy developments in Kazakhstan3 Wind as renewable resource Conditions in Kazakhstan Wind potential Estimated with1820 bn kWh p.a. Acc. Results of UNDP wind energy program wind speeds between 5.9 and 9.7 m/s Vestas’ site hunt in general and for several projects verifies similar picture Excellent conditions to develop wind energy in Kazakhstan

Wind energy developments in Kazakhstan4 Political commitment Leading position in Central Asia in focus Political target to be the leading nation in energy and RES in Central Asia “Electric power industry development program” – 1% or 1 bn kWh of generated power by RES in 2014 possible Political support and finance of the UNDP program to develop the wind energy market

Wind energy developments in Kazakhstan5 Legal framework as basis for market implementation Legal law, incentive system and procedures Legal law “Promotion of Utilization of Renewable energies of Republic of Kazakhstan” from October 2009 with the target of 5% of RES in 2024 Incentive system Application for project related tariff with TEO Advice from several international organization for fixed feed-in tariff acc. experiences in countries like Germany, UK, Italy Procedures Regulations available but lack of experiences at implementation Clarification on administrative, legal procedures and permitting guidelines Improvements at tariff system and regulations would support wind energy development

Wind energy developments in Kazakhstan6 Technical conditions National Grid System Best grid conditions National and unified grid system Clear system at ownerships at high, medium and low voltage level Adequate capacity in whole grid system and regions with good wind conditions Close grid connection points Updated technical equipment to avoid energy losses and inefficiency Grid situation in Kazakhstan National Unified system with three independent systems, but lack of link Large remote areas with good wind conditions Line losses of 25-50% due to very large distances Aging transmission infrastructure Program to improve National Grid System started

Wind energy developments in Kazakhstan7 Strong partners for financing of market development National and International partners Financing for wind energy projects 1.Understanding Capital Supply of Financial Institutions International banks – available National, local banks Multilaterals available and interested ECAs from Western Europe 2.Understanding Customers Capital Demand - equity and export financing 3.Matching Capital Supply and Capital Demand Financing of market development projects Grid development Infrastructure (transport, logistics) Production facilities Multilaterals, e.g. EBRD, IFC available and interested

Wind energy developments in Kazakhstan8 Conclusions Wind as natural and renewable resource  excellent conditions Political commitment and support to start the development of wind energy market  RES on the political agenda Legal framework with laws, incentive systems and procedures  good conditions with improvement Technical conditions – national grid system  Program to start improvements Partners and conditions for financing projects and related businesses  International and National partners Excellent conditions to develop wind energy market in Kazakhstan

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