Kazakhstan Investment Conference San Diego, California 9 September 2005 Dale W. Perry Vice President, AES Corporation Regional Director Kazakhstan, Russia and Central Asia Investing for Kazakhstan’s Future Power Needs: The AES Corporation Experience
Growth Prospects GDP Growth: –8 – 10% last few years –Stated goal to double GDP by 2008 – 2010 –Equates to 5% per annum growth in Electric Power Demand (500 MW) Impact to AES: –Winter 2005 AES Ekibastuz ran at level last seen in 1994
AES in Kazakhstan
Re-Industrialization of Kazakhstan
Emerson
Filling the Demand Gap
The AES Announcement (November 2004): Increase of 15% per annum in Price
How Does the AES Price Compare to the Alternatives? In 2004 prices World Bank REEPS Report
Comparative Tariff Structures (2004) Argentina El Salvador Brasil USA Ukraine Dominican Republic Venezuela Kazakhstan Cameroun Kazakhstan’s Comparative Advantage…
1.GoK investments in power sector and contract issues 2.Ministry of Energy electricity industry reform issues 3.Ministry of Ecology regulations of air pollution and ecological permit issues 4.Agency of Natural Monopoly Regulation electricity distribution, power transportation, rail road tariffs issues 5.Ministry of Industry competition issues 6.Ministry of Finance tax issues 7.Committee of State Property contract issues 8.Ministry of Transportation rail road issues 9.KEGOK power regulations and transportation 10.KOREM centralized power sales 11.Parliament new legislations 12.Others Local and Regional Government Agencies… a surmountable challenge
World Bank REEPS (February 2005) This is exactly what AES does in KZ, with Generation and Distribution
Steps AES is Taking… Addressing the Predictable, Future Power Shortfalls Working with Government of Kazakhstan to Solve the Sector Disincentives Cultivating Regional, Cooperative Opportunities Through: –Public Private Partnerships with Governments and IFIs –Russia-Kazakhstan Regional Market Working Group Harmonizing Rules and Regulations Removing Barriers to Market Entry –Regional Market Development, through new businesses in: Tadjikistan Kirghistan Interacting with New Market Entrants –China –US…?