Projects and Activities https://www.priceexpertise.kz ru Wed, 29 Jul 2026 08:12:06 +0300 National Project "Modernization of the Energy and Utilities Sectors" https://www.priceexpertise.kz/tpost/jmc5kdmgz1-national-project-modernization-of-the-en https://www.priceexpertise.kz/tpost/jmc5kdmgz1-national-project-modernization-of-the-en?amp=true Wed, 29 Jul 2026 07:54:00 +0300 Askhat Zhapsarbay The National Project "Modernization of the Energy and Utilities Sectors" aims to reduce infrastructure wear and tear, improve energy efficiency, and introduce digital solutions in the housing and utilities sector.

National Project "Modernization of the Energy and Utilities Sectors"

National Project: "Modernization of the Energy and Utility Sectors"

Implementation Period: 2025–2029
Total Funding Volume: 13,588 billion KZT
Slide Author: Askhat Zhapsarbay

📌 Project Goal

To ensure reliable, high-quality, and energy-efficient utility services in Kazakhstan through deep infrastructure modernization, digitalization, and the investment transformation of the sector.

🔧 Key Measures

  • Infrastructure Renovation: Reconstruction and upgrading of 86,000 km of utility networks.
  • Monopoly Modernization: Modernization of 200 Natural Monopoly Entities (NMEs).
  • Power & Heat Generation: Construction and renovation of 30 CHP (Combined Heat and Power) plants, adding 7,309 MW of new capacity.
  • Heating Networks: Replacement of 1,622 km of heating networks.
  • Wastewater Treatment: Construction of 45 new WWTPs (Wastewater Treatment Plants).
  • Digitalization: Implementation of digital solutions including Smart Grid, Smart Water, and Smart Metering.

💰 Financing Breakdown

  • State Budget: 1,480 billion KZT
  • Private Investments: 13,588 billion KZT
  • Other Sources: International financial institutions, interest rate subsidies

✅ Expected Outcomes

  • Reduction of utility infrastructure wear and tear down to 40%.
  • Growth of investments in the housing and public utilities sector.
  • Improved quality and accessibility of public utility services.
  • Enhancement of the overall environmental situation.
  • Automation and increased transparency in tariff regulation.
  • Boosted energy efficiency and digital transformation across the sector.

⚠️ Key Challenges

  • Timeline Feasibility: Balancing realistic deadlines against a high level of existing infrastructure wear and tear.
  • Tariff Risks: Potential rise in utility tariffs associated with attracting private investment.
  • Financial Control: The need for transparent oversight and monitoring of funds.
  • Digital Readiness: Ensuring digital infrastructure is prepared for large-scale integration.

🔎 Proposed Solutions

  • Oversight: Establishment of an independent supervisory body.
  • Transparency: Implementation of a transparent expenditure monitoring system.
  • Agility: Flexibility in project deadlines and implementation phases.
  • Consumer Protection: Social guarantees to shield consumers from sharp tariff increases.
]]> Methodology for maintaining separate accounting records for natural monopoly entities https://www.priceexpertise.kz/tpost/6ab5rtkga1-methodology-for-maintaining-separate-acc https://www.priceexpertise.kz/tpost/6ab5rtkga1-methodology-for-maintaining-separate-acc?amp=true Wed, 29 Jul 2026 07:58:00 +0300 Askhat Zhapsarbay Overview of the separate accounting methodology for natural monopoly entities. Cost allocation principles, asset classification, and ensuring tariff transparency.

Methodology for maintaining separate accounting records for natural monopoly entities

Separate Accounting Methodology

The developed methodology aims to ensure transparent accounting of revenues, expenses, and engaged assets of Natural Monopoly Entities (NMEs) across regulated and non-regulated types of services. It defines unified approaches to asset classification, cost allocation, and production reporting in compliance with legislative requirements and IFRS (International Financial Reporting Standards) principles.

🔑 Key Elements

  • Direct Allocation Priority: Primary focus on directly attributing expenses and revenues to specific types of services.
  • Causal Allocation: Application of cause-and-effect relationships and standardized cost-driver bases for allocation.
  • Asset Classification: Categorization of assets into direct, indirect, shared, and general-purpose assets.
  • Standardized Tariff Estimates: Unified frameworks for developing tariff estimates.
  • Internal Governance: Robust tools for internal control and auditing.

🎯 Purpose & Impact

This methodology was developed to enhance the accuracy of tariff calculations and prevent cross-subsidization, as well as to facilitate efficient preparation for public reporting and oversight by regulatory authorities.
]]> Tariff Indexation Rules https://www.priceexpertise.kz/tpost/36a117jr61-tariff-indexation-rules https://www.priceexpertise.kz/tpost/36a117jr61-tariff-indexation-rules?amp=true Wed, 29 Jul 2026 08:02:00 +0300 Askhat Zhapsarbay The indexing method is an annual tariff adjustment that takes into account inflation, production costs, the level of service quality, and the existence of investment programs.

Tariff Indexation Rules

Transparent Tariff Indexation Mechanism for Small-Scale Natural Monopoly Entities

Under conditions of limited resources, aging infrastructure, and growing demand for high-quality public utility services, establishing a fair and balanced approach to tariff regulation is particularly vital. Tariff indexation serves as one of the most flexible yet controlled instruments available.

💡 What is the Indexation Method?

The indexation method is an annual tariff adjustment that accounts for inflation, operational expenses, service quality levels, and the presence of investment programs. Unlike the cost-plus method, indexation allows small-scale entities to update tariffs without undergoing a full review of their entire tariff estimate. This significantly reduces administrative burden and ensures predictability for consumers.

⚙️ Why is it Important?

For small enterprises operating in heat supply, water supply, or local power grids—particularly in rural areas—the indexation method:
  • Simplifies Access: Streamlines the process of updating tariffs.
  • Reflects Reality: Accurately accommodates actual operational costs.
  • Incentivizes Efficiency: Maintains strong incentives to improve operational efficiency.
  • Encourages Investment: Lowers barriers to attracting investment.

👥 Transparency and Consumer Engagement

A mandatory condition for applying this methodology is conducting public hearings and providing advance notice to consumers regarding upcoming tariff changes. This ensures a high level of trust and prevents social tension.

📈 Outlook

The tariff indexation mechanism has already proven its effectiveness internationally and is gaining wider adoption in Kazakhstan, particularly among small-scale entities. This approach not only supports the financial sustainability of utility enterprises but also directs critical resources toward infrastructure modernization and service quality improvements.
]]> Tariff Approval Procedure: A Step-by-Step Guide for Natural Monopoly Entities https://www.priceexpertise.kz/tpost/43lh6dr8e1-tariff-approval-procedure-a-step-by-step https://www.priceexpertise.kz/tpost/43lh6dr8e1-tariff-approval-procedure-a-step-by-step?amp=true Wed, 29 Jul 2026 08:03:00 +0300 Doszhan Ismailov A step-by-step procedure for approving tariffs for natural monopoly entities, taking into account legislative requirements, timeframes, and tariff-setting methods.

Tariff Approval Procedure: A Step-by-Step Guide for Natural Monopoly Entities

Complete Tariff Approval Process for Natural Monopoly Entities

The tariff approval procedure for Natural Monopoly Entities (NMEs) is a structured, step-by-step framework designed to ensure transparency, economic justification, and predictability in tariff policy. This methodology covers the entire cycle—from initial application submission to the official order issued by the regulatory body.

📋 Phase-by-Phase Process

[1. Application & Submission]
│
▼
[2. Preliminary Review (7 Days)]
│
▼
[3. Expert Evaluation (Up to 90 Days / 30 Days Simplified)]
│
▼
[4. Public Hearings (≥30 Days Before Implementation)]
│
▼
[5. Final Order & Publication (30 Days Advance Notice)]

1. Preparation and Submission

  • Documentation: The entity prepares the tariff estimate, investment program, and financial and production reports.
  • Submission Portal: All documents must be submitted via the electronic system "Monopolist Database" (Baza Monopolist) at least 90 working days prior to the proposed effective date.
  • Authentication: Signing with a qualified Electronic Digital Signature (EDS) is mandatory.

2. Preliminary Completeness Review

  • The Committee for Regulation of Natural Monopolies (CREM) conducts a initial completeness check of the application within 7 working days.
  • Upon positive review, information regarding the application is published on CREM's official website, initiating the formal evaluation phase.

3. Expert Evaluation

  • Standard Procedure: Takes up to 90 working days.
  • Simplified Procedure: Takes up to 30 working days.
  • Focus Areas: CREM assesses cost justification, the accuracy of methodologies used, performance metrics, and funding sources for investments.
  • Deliverable: An official expert evaluation report that serves as the basis for further action.

4. Public Hearings & Stakeholder Engagement

  • Public hearings are organized at least 30 calendar days before the new tariff takes effect (10 days under the simplified procedure).
  • The entity must notify consumers in advance and provide open access to application materials for public discussion.

5. Approval, Registration, and Effective Date

  • CREM issues an official order approving the tariff.
  • The order is subject to state registration and official publication.
  • Consumers must be notified at least 30 calendar days before the new tariff officially comes into force.

⚙️ Adjustments, Compensations, and Tariff Regimes

  • Annual Adjustments: Conducted based on actual reporting data.
  • Indexation: Streamlined for small-scale natural monopoly entities.
  • Unscheduled Revisions: Initiated by the regulator or triggered by force majeure events.
  • Temporary Mechanisms: Application of temporary compensatory or reduced tariffs when required.

📊 Regulatory Approaches Supported

The methodology accommodates multiple tariff-setting frameworks based on industry characteristics, entity size, and investment intensity:
  • Cost-Plus (Cost-based method)
  • Incentive-Based / RAB (Regulatory Asset Base)
  • Indexation Method
  • Concession Agreement Framework
Key Takeaway: This structured workflow provides a unified, transparent regulatory framework that balances consumer protection with the operational sustainability and financial viability of natural monopoly entities.
]]> Development of net consumption and small-scale renewable energy production in Kazakhstan https://www.priceexpertise.kz/tpost/g34jznlea1-development-of-net-consumption-and-small https://www.priceexpertise.kz/tpost/g34jznlea1-development-of-net-consumption-and-small?amp=true Wed, 29 Jul 2026 08:05:00 +0300 Doszhan Ismailov The development of net consumption and small-scale renewable energy production in Kazakhstan is viewed as one of the key areas of sustainable energy.

Development of net consumption and small-scale renewable energy production in Kazakhstan

Development of Net Metering and Small-Scale RES Generation in Kazakhstan: Potential, Barriers, and Steps Forward

The transition to sustainable energy requires not only large-scale renewable energy source (RES) projects, but also the development of decentralized energy generation—specifically, net metering and small-scale generation. Possessing immense solar and wind energy potential, Kazakhstan is taking its first steps in this direction; however, it faces several structural barriers and challenges that require systemic solutions.

💡 What is Net Metering and Why Does It Matter?

Net metering is a mechanism that allows consumers who install solar panels or other RES equipment on their premises to feed surplus energy back into the central grid and receive financial compensation.
This approach:
  • Reduces grid load: Alleviates pressure on centralized power infrastructure during peak hours.
  • Enhances energy security: Increases self-reliance and energy security for individual households.
  • Drives private investment: Encourages small-scale private investment in green energy.
  • Lowers carbon footprint: Contributes directly to national decarbonization goals.
In Kazakhstan, net metering is formally referenced in Paragraph 5, Article 6 of the Law "On Supporting the Use of Renewable Energy Sources"; however, its practical implementation remains hindered by key regulatory and technical bottlenecks.

⚠️ Key Development Barriers

Based on current analysis, the growth of small-scale generation in Kazakhstan is held back by four main factors:
  1. Lack of a Clear Regulatory Framework: While the concept is recognized by law, detailed and transparent rules covering compensation calculations, metering procedures, and grid connection standards are missing.
  2. Weak Economic Incentives: The absence of market-based buyback rates for surplus power—combined with uncertain payback periods—reduces financial motivation for households and small businesses.
  3. Restricted Grid Access: Not all regional grid operator companies are technically or organizationally equipped to receive surplus energy from decentralized micro-generators.
  4. Absence of Long-Term Support Programs: There is a lack of targeted financial incentives, such as equipment subsidies, tax relief, or low-interest "green loans" for residential RES installations.

🌐 International Experience & Lessons

Global benchmarks (e.g., Germany, Denmark, the United States, and Australia) demonstrate that robust net-metering mechanisms can transform local energy landscapes. Successful international frameworks typically incorporate:
  • Feed-in Tariffs (FiTs): Guaranteed, fixed buyback rates for surplus energy fed back into the grid.
  • Tax Relief: Tax incentives and exemptions on the purchase of renewable energy equipment.
  • Simplified Interconnection: Standardized, streamlined connection procedures for small generation units.
  • Co-financing Schemes: Municipal and local government programs providing grants or co-funding for RES adoption.
Example: Germany's widespread adoption of net metering stabilized grid supply while fostering a thriving domestic market for solar technology and installation services.

🚀 Key Recommendations for Kazakhstan

To accelerate decentralized RES adoption, Kazakhstan should consider the following actionable steps:
[1. Update Regulations] ──► [2. Set Fair Tariffs] ──► [3. Deploy Smart Meters] ──► [4. Financial Support]
  • Update the Regulatory Framework: Adopt specific secondary legislation outlining clear net-metering protocols—including exact calculation methodologies, step-by-step connection workflows, and accounting procedures.
  • Establish Fair Buyback Tariffs: Set economically justified and stable feed-in rates that incentivize private participation while remaining sustainable for grid operators.
  • Digitalize Energy Metering: Roll out smart metering systems to automatically track bi-directional power generation and consumption.
  • Introduce Financial Support Mechanisms: Formulate tax credits, subsidies, or low-interest green loans for households and small businesses installing RES capacity.
  • Upgrade Regional Infrastructure: Ensure regional distribution network operators adapt their technical facilities to receive and manage decentralized energy flows.

📌 Conclusion

Developing net metering and small-scale RES generation is essential for decentralization, energy resilience, and active citizen participation in the green energy transition. By establishing a comprehensive, long-term framework that combines technical readiness with financial incentives, Kazakhstan can reduce grid strain while opening a dynamic new segment in its domestic energy market.
]]> Procurement by natural monopoly entities https://www.priceexpertise.kz/tpost/6u2vn0ydk1-procurement-by-natural-monopoly-entities https://www.priceexpertise.kz/tpost/6u2vn0ydk1-procurement-by-natural-monopoly-entities?amp=true Wed, 29 Jul 2026 08:07:00 +0300 Doszhan Ismailov Analysis of procurement by natural monopoly entities

Procurement by natural monopoly entities

1. Introduction

Procurement by Natural Monopoly Entities (NMEs) is not merely an administrative procedure; it is a vital component of state economic policy. These processes must be as transparent as possible to ensure the efficient utilization of resources.
Natural monopoly entities play a pivotal role in the country’s economy, as their operations touch every sphere of society and business. Consequently, they are subject to strict state regulation.
The procurement of goods, works, and services by NMEs represents one of the most critical operational processes within such organizations. It is an essential element in maximizing financial efficiency while guaranteeing the availability, accessibility, and high quality of services provided to citizens and businesses alike.
The regulatory framework governing these procurements plays a key role in maintaining service stability, supporting domestic producers, and ensuring overall purchasing transparency.

2. Core Provisions of Order No. 73

Order No. 73, issued by the Minister of National Economy of the Republic of Kazakhstan on August 13, 2019, establishes the official rules regulating the procurement process for natural monopoly entities. These rules encompass several core aspects designed to ensure effective and transparent fund allocation while mitigating corruption risks.

📌 Fundamental Procurement Principles

1. Openness and Transparency

The procurement process must be completely accessible to the public and all interested stakeholders:
  • Information Publication: Details regarding procurement notices, eligibility conditions, and evaluation results must be published on official platforms (e.g., dedicated state or specialized procurement portals).
  • Stage-by-Stage Visibility: Every phase of the procurement process—application submission, review, and winner selection—must remain transparent and trackable for all participants.
  • Dispute & Appeal Mechanisms: Bidders must have the right to appeal procurement decisions, reinforcing openness and preventing collusion or administrative error.
This open approach helps prevent corruption by keeping all actions visible to the public and regulatory authorities.

2. Equal Opportunity for All Potential Suppliers

Every supplier meeting the established requirements must have an equal opportunity to participate:
  • Non-Discrimination: Participation must not be restricted to large or well-known enterprises. Small and medium-sized enterprises (SMEs) have equal rights to compete if they meet the criteria.
  • Uniform Conditions: Terms and conditions for bid submissions must be clear, standardized, and identical for all applicants to prevent favoritism or artificial barriers.
  • Information Accessibility: All prospective suppliers must receive identical, simultaneous access to procurement documentation and requirements.

3. Fair Competition

Bidders must compete strictly on the merit of their proposals and pricing rather than unethical practices:
  • Integrity: Participants are prohibited from using illegal or unethical tactics, such as price manipulation, bid-rigging, or corrupt schemes.
  • Objective Evaluation Criteria: Winners are determined based on tangible merits, including price, quality, delivery terms, and reliability.
  • Fostering Innovation and Quality: Fair competition encourages suppliers to offer superior technical solutions, driving overall quality improvements in goods and services.

4. Support for Domestic Goods and Service Providers

This principle aims to bolster local manufacturers and service providers within global and regional market contexts:
  • Preference for Local Producers: Procurement mechanisms may incorporate support for domestic companies to strengthen the local economy and reduce reliance on foreign imports.
  • Compliance with International Obligations: Support for domestic suppliers must align with Kazakhstan's international treaties and commitments (e.g., WTO agreements and bilateral trade treaties).
  • Stimulating Local Production: Supporting local suppliers generates employment, drives technology transfer, and boosts domestic market competitiveness.

3. Key Stages of the Procurement Process

[1. Planning & Listing] ──► [2. Method Selection] ──► [3. Tender & Evaluation] ──► [4. Contract Execution]

🗓️ 1. Procurement Planning

By December 31 of each year, the NME must compile a detailed annual procurement plan outlining required goods or services, estimated volumes, and projected costs. This list must be submitted to the authorized body for information purposes and published on the official procurement portal.
  • Amendments: Any subsequent changes or additions to the approved plan must be submitted to the authorized regulatory body (or its territorial department) within 10 working days of adoption.

⚙️ 2. Selection of Procurement Method

Depending on the volume and monetary threshold of the goods or services required, the entity selects an appropriate procurement method—such as Open Tender, Request for Price Proposals (Quotations), or Single-Source Procurement—in accordance with statutory regulations and internal procedures.

🏆 3. Tendering and Selection of Winner

The evaluation commission must organize the bidding process to eliminate bias and maximize competition.
  • Comprehensive Evaluation: Bidders are evaluated not only on price, but also on product quality, delivery schedules, track record, and financial stability. This minimizes operational risk for the NME and ensures high service standards.

✍️ 4. Contract Award and Execution

Upon selecting the winning supplier, a formal contract is executed outlining clear terms, performance timelines, and quality requirements. Strict oversight of contract fulfillment is maintained throughout the contract lifecycle.

🇰🇿 Support for Domestic Manufacturers

When procuring items that have functional Kazakhstani-made equivalents, preference must be given to domestic producers under equal conditions—provided that the price, quality, and delivery terms of local goods fully meet tender specifications.

4. Oversight and Regulatory Control

Oversight conducted by the Committee for Regulation of Natural Monopolies (CREM) under the Ministry of National Economy of the Republic of Kazakhstan is a cornerstone of maintaining market competition, legality, transparency, and economic justification.
  • Monitoring & Audits: CREM and its regional departments actively monitor procurement activities to detect potential regulatory violations (e.g., improper selection of procurement methods or misapplication of statutory rules).
  • Enforcement Measures: Where non-compliance is identified, the regulatory authority possesses the power to:
  1. Issue binding administrative orders to rectify violations.
  2. Impose financial penalties/fines on the NME.
  3. Initiate the termination of non-compliant contracts with suppliers.

5. Social and Economic Impact

Strict adherence to procurement regulations generates substantial benefits across both the economic and social landscapes:
  • Economic Efficiency: Increased transparency and healthy competition lower purchasing costs and drive up quality, allowing NMEs to optimize resource utilization.
  • Public Trust and Social Stability: Because NMEs provide essential public utilities, transparent purchasing processes enhance public confidence in utility operations and contribute directly to social stability.

6. Conclusion

Procurement by Natural Monopoly Entities forms a core pillar of state economic regulation. It is designed to ensure efficient spending, reduce unnecessary operational costs, and secure high-quality services for the public.
By enforcing the rules established under Order No. 73, Kazakhstan ensures a fair, transparent, and competitive procurement system. Strict timelines, local producer support, and robust consumer safeguards collectively foster sustainable economic development and build public and business trust in utility operators nationwide.
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