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Kazakhstan: Supporting Renewable Technology-Inclusive Heat Supply Legislation

Sovereign (Public) Project | 53341-001 Status: Active

The knowledge and support technical assistance (TA) will support the development of the renewable technology-inclusive heat supply legislation for the Republic of Kazakhstan. This TA was requested by the Ministry of Energy (MOE) of Kazakhstan and is in line with the goals of the country partnership strategy 2017 -2021.

Project Details

Project Officer
Gurgenidze, Nana Central and West Asia Department Request for information
Country
  • Kazakhstan
Sector
  • Energy
 
Project Name Supporting Renewable Technology-Inclusive Heat Supply Legislation
Project Number 53341-001
Country Kazakhstan
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 6564-KAZ: Supporting Renewable Technology-Inclusive Heat Supply Legislation
Republic of Korea e-Asia and Knowledge Partnership Fund US$ 500,000.00
Clean Energy Fund under the Clean Energy Financing Partnership Facility US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming Some gender elements
Description The knowledge and support technical assistance (TA) will support the development of the renewable technology-inclusive heat supply legislation for the Republic of Kazakhstan. This TA was requested by the Ministry of Energy (MOE) of Kazakhstan and is in line with the goals of the country partnership strategy 2017 -2021.
Project Rationale and Linkage to Country/Regional Strategy

In 2013, the Government of Kazakhstan adopted the national Concept for the Transition to a Green Economy until 2050 (Strategy 2050), outlining an ambitious plan to (i) increase the share of renewable and alternative energy in power generation (to 3% by 2020, to 30% by 2030, and to 50% by 2050); and (ii) reduce energy intensity and greenhouse gas emissions. In this respect, the energy and heat sector is the biggest challenge on the government's agenda. According to an OECD report, the energy sector generates about 80% of greenhouse gas emissions in Kazakhstan, 90% of which come from heat generation.

The heat supply sector of Kazakhstan was created in the late 1970s during the Soviet era. The heat supply network consists of 12,300 kilometers of pipes and 2,427 heat producers, of which 45% are combined heat and power (CHP) plants, 35% are large boilers, and 20% are small boilers. About 44% of the heat pipes are above-ground and have inadequate insulation. The district heating plants run mostly on coal, although some use natural gas or black oil (mazut). These outdated, poorly maintained assets cause frequent disruptions in the supply of heat to end users. Heat system loss is estimated to be about 30% (exact data is not available because of an absence of metering). Heat consumption is billed per square meter of space and does not reflect actual usage.

Government of Kazakhstan has kept heating tariffs low for social reasons yet has assumed that tariffs are sufficient to cover the costs and maintenance of the assets. In 2019, Government of Kazakhstan decreased the tariff for heating by 14% compared with 2018. As a result of low tariffs and unmeasured consumption, district heating companies cannot generate capital to upgrade their assets, thus, heat supply systems are facing technical and financial deterioration.

The institutional setup of the district heating sector is complex, involving many public and private stakeholders. Roles and responsibilities of public agencies are unclear and often overlap. Norms regulating heat supply are scattered among various legal acts, increasing ambiguity. There is neither a specific or overarching law on heat supply or district heating nor technical standards and mandatory heat planning.

In March 2019, the MOE of Kazakhstan requested ADB support in drafting a new Law on Heat Supply and the respective legislation. The new legislation is critical for creating a balanced and clear regulatory framework, setting clear targets and an overarching plans on increasing share of renewables and improving energy efficiency standards in the heat sector. The OECD suggests that improving energy efficiency standards in Kazakhstan's heating sector can reduce greenhouse gas emissions by 12.6 13.8 million tons of carbon dioxide (CO2) per year, out of 229.95 million tons of CO2 emitted annually (footnote 9). Integrating renewables into existing fossil-fuel-based heating systems will further reduce CO2 emissions by lowering consumption of fossil fuels (Japan, North America, the People's Republic of China, and Scandinavian countries have had success with this). However, according to the Climate Laws, Institutions and Measures (CLIM) Index, Kazakhstan (61st in the world) faces challenges in the formulation and implementation of relevant policies. Thus, assistance to Kazakhstan in drafting an effective policy and regulatory framework is timely and needed.

Impact CO2 emissions in electricity and heat production reduced by 15% by 2030 (baseline 2013) and the share of alternative energy sources increased to 30% by 2030
Project Outcome
Description of Outcome Heat Supply Law adopted by the Parliament of the Republic of Kazakhstan
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Gap analyses of the heat supply sector conducted

Renewable technology-inclusive heat supply legislation drafted

Public Private Partnership (PPP) framework in heat supply sector developed

International practices for heat supply systems disseminated

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Gurgenidze, Nana
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Ministry of Energy
19 Kabanbai Batry Avenue
Block A, 01000, Esil District, Astana
Kazakhstan
Republic of Kazakhstan
*
Timetable
Concept Clearance 13 Mar 2020
Fact Finding 31 Mar 2020 to 31 Mar 2020
MRM -
Approval 14 Sep 2020
Last Review Mission -
Last PDS Update 14 Sep 2020

TA 6564-KAZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Sep 2020 28 Sep 2020 28 Sep 2020 31 Aug 2022 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 1,500,000.00 50,000.00 0.00 0.00 0.00 1,550,000.00 14 Sep 2020 0.00

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

Tender Title Type Status Posting Date Deadline
Technical and Legal Consultancy Firm - Consulting Closed 18 Feb 2020 17 Mar 2020

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Policy and Advisory Technical Assistance 6564 28 Sep 2020 VPC GmbH(GERMANY) in association with Suntrace GmbH(GERMANY) Kraftwerkstrasse 22 Vetschau, Brandenburg D-03226 Germany Ministry of Energy 1,498,589.00

Procurement Plan

None currently available.