WASHINGTON, November 16, 2010 – The World Bank Board of Directors today approved a US$78 million loan for the Kazakhstan Alma Electricity Transmission Project to the Republic of Kazakhstan to improve the reliability and quality of electricity supply to consumers in the Almaty region. The Project will expand the capacity of the Almaty Oblast transmission network in an environmentally responsible and financially sustainable manner.
The Bank will finance two components of the project: (a) construction of a 500 kV overhead transmission line (OHTL) from the YuKGRES substation to the Alma substation, and (b) procurement and project management consulting services for the construction of 500 kV OHTL from the YuKGRES substation to the Alma substation.
“A reliable and cost-effective electricity supply is fundamental to both social and economic development of the country,” said Imtiaz Hizkil, the World Bank Project Team Leader. “The primary objective of the Alma Electricity Transmission Project for Kazakhstan is to improve the reliability and quality of the electricity supply to consumers in the Almaty region, in an environmentally responsible and financially sustainable manner.”
Strong economic growth, with an average real GDP growth of 10 percent between 2000 and 2007, and rising incomes fuelled increasing demand for electricity in Kazakhstan. Growth in electricity consumption averaged over 5 percent per year during this period.
The major portion of the growth in demand and more than half of total electricity consumption was in the booming Southern regions. In the Almaty Oblast in southern Kazakhstan growth in electricity consumption exceeded 7 percent per year from 2000 to 2007.
With the recent deepening of the world economic crisis, GDP growth, and in turn consumption growth, are likely to remain at lower levels.
However, the impact on growth in electricity demand in southern Kazakhstan will not be as significant, as the region has faced severe supply constraints in the past three years. Once the country recovers from the current economic slowdown, electricity demand in southern Kazakhstan is expected to increase vigorously.
The Kazakhstan Alma Electricity Transmission Project will enhance the well-being of the population in South Kazakhstan by providing relatively low-cost and higher quality energy; removing a binding energy supply constraint to continued economic growth in the region; and increasing the region’s competitiveness in industrial and commercial development with related employment and income benefits.
The Project consists of three main components that will support:
I. Construction of transmission lines, in particular:
- 500 kV OHTL from YuKGRES substation to Alma substation;
- 500 kV OHTL from Alma substation to Almaty substation;
- 220 kV OHTL from Alma to Kensai substation;
- incoming cross connection lines of the 220 kV OHTL from Almaty CHP-3 (combined heat and power) to Shelek substation for connection with Alma; and
- incoming cross connection lines of the 220 kV OHTL from Almaty CHP-3 to Robot substation for connection with Alma.
II. Construction, extension, and modernization of substations:
- construction of a new 500 kV Alma substation;
- extension and modernization of the 500 kV Almaty substation; and
- extension and modernization of 500 kV YuKGRES substation;
III. Consulting and technical services:
- procurement and project management consulting services for the construction of 500 kV OHTL from YuKGRES substation to Alma substation; and
- technical services for the selection of the OHTL route, surveys, and supervision of the construction contracts and sites.
Total financing of the project is US$ 200.9 million, of which the Government of Kazakhstan will finance US$ 122.9 million from its own resources. The World Bank loan of US$ 78 million will have a maturity of 25 years with a 5 year grace period.
The World Bank’s overall mission in Kazakhstan is to help the Government in achieving diversified and sustainable economic growth and improving the living standards of the population. To date, the Bank has provided 36 loans to Kazakhstan for the amount of more than US$ 5.2 billion since July 1992.