Amendments to the Rules for Organizing Renewable Energy Auctions in Kazakhstan

A recent order by the Acting Minister of Energy of the Republic of Kazakhstan made amendments to the rules for organizing and conducting auctions for renewable energy source projects. The order will go into effect on February 16, 2025.

QUALIFICATION REQUIREMENTS

Qualification requirements for auction participants will now be divided into two categories: (1) for participants in auctions for construction of renewable energy source (RES) projects with installed capacity up to 499 megawatts (MW) (inclusive) and (2) for participants in auctions for construction of RES projects with installed capacity over 499 MW.

The current list of qualification requirements remains unchanged and will continue to apply only to participants in auctions for RES projects with installed capacity up to 499 MW. The qualification requirements for projects with installed capacity over 499 MW have been amended. So, while the participants of such auctions (over 499 MW) are no longer required to submit certain documents (e.g., copies of technical conditions for grid connection, copies of title documents for the land plot), such participants are now required to provide a number of documents confirming the below credentials.

EXPERIENCE & EQUITY OWNERSHIP

• Documents confirming experience in investment, construction, and commissioning of RES projects of the relevant type with a total installed capacity of at least 100 MW in the Republic of Kazakhstan, which is evidenced by holding at least 25% of shares (participatory interest in the authorised capital) of a legal entity registered in the Republic of Kazakhstan that was (or is) the owner of the said RES project as of the date of its commissioning. Such evidence can confirm experience of either the auction participant and/or its shareholders (participants), including ultimate owners controlling at least 51% of shares (participatory interest in the authorised capital) of the legal entity that was (or is) the owner of the said RES project as of the date of its commissioning.
• Ownership structure with disclosure up to the ultimate beneficiary as of the date not earlier than the beginning of the period of acceptance of bids with supporting documents, where shares (participatory interest in the authorised capital) of ultimate owners—citizens of the Republic of Kazakhstan and/or legal entities of the Republic of Kazakhstan without foreign participation—is not less than 51%. This effectively means that Kazakhstan residents must control the auction participant.

POWER STORAGE SYSTEM

The winner of the auction for construction of RES projects with installed capacity over 499 MW shall ensure simultaneous construction and commissioning of the power storage system with capacity (1) of at least 30% of the installed capacity of the RES project and (2) sufficient to deliver two-hour power supply, which shall be maintained during the entire term of the power purchase agreement (PPA).

OTHER REQUIREMENTS

Winners of the auctions for construction of RES projects with installed capacity over 499 MW must acknowledge that no assignment of rights and obligations under the PPA is allowed.

The amount of financial security to support the application for participation in the action for construction of RES projects with installed capacity over 499 MW (without documentation – the only available option) is equal to KZT 5,000 (approximately $9.50) per 1 kilowatt of installed capacity.

The Order comes into effect from February 16, 2025.