Investment activities 

Company investment program for 2013  

Basic directions of investment activities of the Company are modification, reconstruction and construction of new generating facilities, taking into account modern technology solutions that meet international ecology standards, modernization and reconstruction of power transportation networks, as well as implementation of efficient technology to produce coal.  

Investment activities of the Company are directed to ensure reliable supply of power and satisfaction of needs of population in electric and thermal energy.  

In 2013 the Company completed a number of investment projects: 

• Solar power plant of 2 MW in Kapshagay city has been put into operation with use of renewable energy sources;  
• Almaty CHP-2, phase 3 have been reconstructed and expanded. Heater-water converter plant of 350 Gcal/h.  
• Electric precipitators of blocks # 3, 7 of Ekibastuz SDPS -1 have been set-up and put into operations in order to reduce particulate emissions;  
• Novaya # 16 substation in Almaty city to supply power for Park of Information Technologies Special Economic Zone facilities has been put into operation.  
• Construction of Power Line Loop — 220 kV in Almaty was finished and connected under voltage of Besagash and Mamyr substations.  

The Company’s investment activity is a capital intensive direction. Financing of projects is carried out and planned in the future on account of both – the own money of the Company, subsidiaries and affiliates, the republican budget funds and the National Fund, and on account of funds borrowed from Kazakhstani and international finance institutes. Due to large amounts of capital expenditures, and extended terms of projects implementation, the Kazakhstani and foreign banks pay special attention to project economics indices and compliance with environmental requirements.  

Investment projects portfolio consists of 13 investment projects. Execution of these projects will allow covering Kazakhstan’ deficit in power and electrical capacities by means of increasing of set capacities of existing stations and creation of new capacities. Four projects, out of the portfolio, are executed within the framework of SPFIID (State Program of Accelerated Industrial and Innovative Development); four projects – within the framework of Map of Industrial Development. Below, the list of Samruk-Energy Group of Companies’ basic projects, being implemented, is given:      

Project of construction of Balkhash TPP  

In September 2012 construction of the first module of Balkhash TPP of 1,320 MW capacity was started in the presence of Republic of Kazakhstan’ and Republic of Korea’ Heads of States (the project has been included into SPFIID and Map of Industrial Development). Execution of the project will allow generating more than 10 bln kWh a year and covering of Kazakhstan’ deficit in power and electrical capacity.  

It is planned to finish the construction of the plant in 2018.  

Project of Modification of Shardarinsk HPP  

Modification of Shardarinsk HPP (the project has been included into SPFIID and Map of Industrial Development) plans replacement of morally and physically obsolete equipment in order to increase performance and safety of the plant operation, what will allow increasing of the set capacity up to 116 MW and generate extra 57 mln kWh a year. 

It is planned to finish the modification in 2016.   

Project of Modification and Expansion of Ekibastuz SDPS-1 capacity 

Project of Modification and expansion of Ekibastuz SDPS-1 capacity (the project has been included into SPFIID and Map of Industrial Development) plans restoring of blocks # 8, #2, #1 and increase of existing capacity of the plant by 1,500 mW respectively. 

Restoration of block # 8 was finished in 2012. Restoration of block # 2 is planned to be finished in 2014, block # 1 – in 2016. 

Project of Modification and Expansion of Ekibastuz SDPS-2 with installation of power block # 3

Project of Modification and Expansion of Ekibastuz SDPS-2 with installation of power block # 3  (the project has been included into SPFIID and  Map of Industrial Development)  is conducted to increase the set capacity of the plant by 636 mW, what will lead to generation of about 4.8 billion kWh of extra power a year. 

It is planned to finish the construction of the power block in 2017.  

Projects of construction of substations in Almaty city

In period from 2010 thru 2013 in Almaty and Almaty region the Company has implemented projects of construction of substations servicing Asian games (Medeu, Shymbulack, KazGU, Yermensay), Metropolitan and SEZ PIT (Otrar, Novaya # 16, Toplivnaya and Alatau), as well as, housing and community amenities (Mamyr, Novaya #3A). The substations’ equipment is set under voltage. Commissioning of new transformer capacity made 1,372 MVA.   

Besagash Substation of 500 MVA is under working voltage; construction of Yermensay power transmission line substation – Besagash Substation, Besagash Substation – TPP – 3 Substation has been finished.  

AZC JSC continues construction of Altay Substation of 80 MVA transformer capacity to supply power for housing and community amenities. It is planned to finish the construction in June 2014.   

Projects on reconstruction of combined ash-handling and slag removal system and boiler unit of st. # 8 at Almaty TPP-2, construction of compensating Kerbulackskay HPP, construction of Yereimentau WPP of 45 MW capacity, transition to auto-conveying cyclic-stream technology of coal production in Bogatyr section and construction of gas turbine power plant on the basis of Pridorozhnaya gas field are being implemented. 

Reconstruction and modification of Aktobe CHP Project  

In this project it is planned to replace turbo set at station # 3 since the existing equipment has used its reserves. Implementation of the project allows increasing the set capacity up to 117 MW. Term of completion is – Year 2014.  

Plans for 2014 provide for the following:

• Completion of construction of Altay substation  to supply power for housing and community amenities of Almaty city of total transformer capacity of 80 MVA;  
• Commissioning of wind power plant of the planned capacity of 45 MW near Ereymentau city;   
• Completion of reconstruction and modification of Aktobe CHP of 117 MW capacity;   
• Completion of restoration of block # 2 at Ekibastuz SDPS-1 of 500 MW capacity.  

At same time the Company actively works on including of new investment projects into the portfolio. It is planned to start implementation of the following investment projects: construction of CHP in Semey city and wind power plant in Shelekski corridor, construction of 7 small HPP, reconstruction and expansion of Almaty CHP-1 with conversion into gas, reconstruction and expansion of ash dump of Almaty CHP-3. 

Sources of financing of investment projects  

In order to attract financing resources, the Company widely uses such instruments as credits and bonds, and borrows monetary funds from the Republican Budget to finance socially significant projects. Herewith, the Company uses both internal sources of financing and external ones, such as Foreign Trade Bank (RF), Public Development Bank (People’s Republic of China), etc. 

In 2013 loan agreement was signed as to financing of project of construction of wind power plant near Ereymentau city.  

On December 21, 2012 the Company placed, at ISE and KASE, five-year euro bonds on amount of 500 mln dollars, coupon rate was determined in amount of 3.75% per annum. Total volume of par value, placed via KASE made 101.5 mln dollars. 

The Company has successfully closed bid book of debut issue of euro-bonds by coupon rate of 3.75% what is historically is the lowest level at initial placement of Kazakhstani emitters on international capital markets. Funds, received from the placement of euro-bonds shall be spent to refinancing of current loans and implementation of investment programs, approved by Samruk-Kazyna NWF and Republic of Kazakhstan Government. 

Infrastructure development, modification

In 2013 construction of solar power plant of 2 MW at Kapshagay city was finished and the plant was put into operation. 

In 2013 EPC-contract on design, delivery and construction of ready-to-operate wind power plant of 45 MW near Ereymentau city was concluded with consortium – a member of Karaganda BI Energy Plus LLP, Furlander Wind Technology OJSC, W2E Wind to Energy GmbH, StroyIndustry LLP. Construction and installation work is in progress. 

In 2013 according to results of two-stage tender the EPC-contract on modification of Shardarinskaya HPP has been signed between Shardarinskya HPP JSC and ANDRITZ Hydro GmbH (Germany). 

AZC JSC

In 2013 construction of Kensay-Yermensay PTL — 220 kV (Power Transmission Line), thus forming of loop of 220 kV around Almaty city has been finished; the loop significantly increases reliability of external power supply circuit of the megacity.  

In 2013 in Almaty city the construction of Mamyr Substation of 110/10 kV and Novaya 3A Substation of 100/10/6 kV with cable lines of 110 kV was finished. In Quarter 1, 2014 it is planned to finish construction of Altay Substation 110/10 kV and start construction of new substation named TurkSib of 110/10-6 kW in the northern part of the city. 

Construction of substations of 110 kV was done with application of modern equipment of leading world manufacturers. On high voltage PTL 110 and 220 kV a cable with cross-linked polyethylene insulation was used. 

MREC JSC 

Mangistau Distribution power grid company JSC completes reconstruction of Severnaya Substation 110/35/6 kV with replacement of CDDofEI – 6 kV (CDDofEI – Complete Distribution Device of External Installation) and reconstruction of OHL – 110 kV (OHL - Overhead Line) at Say-Utes 1,2 with installation of additional supporting poles. 

In 2013:

• at Karamandybas substation 110/6 kV and Termalnaya Substation  110/6 kV a replacement of isolating switch/short circuit  – 110 kV with electric gas cut-off switchers was done;
• at BKNS-2 substation 35/6 kV, BKNS-3 substation 35/6 kV, BKNS-5 substation 35/6 kV and Asar substation 35/6 kV modification of CDDofEI – 6 kV was done;
• Design and estimate documentation for construction of Aktau-Karazhanbas PTL — 220 kV with auto transformer of 1х125 MVA at Karazhanbas substation 220 kV has been developed. 

EK REC JSC (East-Kazakhstan Regional Energy Company)

In order to increase volumes of power transmission and reduce costs for transmittal by the third party grids the following assets were purchased from Distrans LLP in 2013:

• PTL L-151, L-152, L-116, L-123, L-124, L-434, L-435, L-439;
• Substations — 9, substation — 16, Substation — 23,  Levoberezhnaya Substation, ChPTF Substation. 

In all RECs (Regional Energy Company) for automation of power recording a stage-by-stage implementation of ASCAPC (Automatic system for commercial accounting of power consumption) is continued. In distribution mains a reconstruction of OHL 0.4 kV with replacement of naked wire with self-supporting insulated wire (SIW) is carried out. 

In the city networks of Almaty the planned conversion of 6 kV lines into 10 kV voltage lines is carried out.