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Eurasianet

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Eurasianet is an independent news organization that covers news from and about the South Caucasus and Central Asia, providing on-the-ground reporting and critical perspectives on…

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Kazakhstan Considers Nationalizing ‘Problematic’ Power Plants

Kazakhstan’s president has asked his government to consider nationalizing “problematic” power plants after a breakdown left residents of a northern town battling the depths of winter inside their homes.  

The collapse over the weekend of operations at a power plant in Ekibastuz left huge swathes of a city of over 100,000 people without central heating as nighttime temperatures hit -30 degrees Celsius (-22 Fahrenheit).

Pavlodar’s regional governor Abylkair Skakov said he had personally overseen the evacuation of residents of an orphanage after a state of emergency was declared in Ekibastuz on November 27. 

As of November 28, central heating had been restored to most residents, authorities said, with representatives of Kazakhstan’s ruling party Amanat boasting of delivering a thousand electric radiators as part of the humanitarian response. 

In a statement, the Energy Ministry attributed the cause to damage in the piping system that delivers steam throughout the city, which caused a drop in pressure and the shutdown of five boilers in short order. The statement noted that a government commission had in August demanded the plant’s operators speed up work on repairs, particularly the network of pipes, which the ministry described as 70 percent out of date. Like many Soviet-built facilities, the Ekibastuz plant provides the town with both electricity and heat.

Of 37 large power plants in Kazakhstan, 22 are privately owned, according to data held by the Energy Ministry. 

The plant in Ekibastuz dates to 1956, but is now controlled by the Central Asian Electric Power Corporation, a firm majority owned by industrial and financial magnates Alexander Klebanov and Sergei Kan. 

The same company came under fire in March when a smokestack collapsed at its plant in Petropavl, some eight hours north of Ekibastuz, causing a fatal accident and leaving homes without proper heating. 

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The plant’s director was arrested, but Klebanov and Kan, businessmen who made their wealth under former president Nursultan Nazarbayev, were left untouched. 

In a Telegram post late on November 27, President Kassym-Jomart Tokayev’s press service wrote that Tokayev had asked Prime Minister Alikhan Smailov “to consider the issue of returning problematic energy assets in the country's cities to state ownership.” 

The statement blamed accidents and electricity supply problems on “poor quality of management” at the facilities, and said the state would extend material support to Ekibastuz residents. 

Coal-fired power stations generate more than 70 percent of Kazakhstan’s energy mix.

For Tokayev, who has vowed not to extend his presidency beyond the seven-year term that he secured in an opposition-free vote on November 20, a brittle, aging and under-funded energy system has become a pressing problem. 

The head of state had already flagged the dilapidated state of local energy infrastructure in Ekibastuz back in October, during a visit to Pavlodar and Karaganda regions that was understood as the beginning of his election campaign. 

Then, just two weeks before he went to the polls, more than 20,000 residents of Ridder, a mining town in the northeast of the country, were left without proper heating and hot water for several days after an accident at the power plant there – also privately owned. 

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The governor of the Eastern Kazakhstan region Daniyal Akhmetov on November 10 accused the Ridder plant’s management of providing the national grid with misleading reports about the health of the plant’s infrastructure. 

Energy Minister Bolat Akchulakov said “measures” against the company were being considered, without offering details. 

A key problem in the sector is that electricity, and thermal heating in particular, is not a lucrative business in Kazakhstan. Tariffs are low, energy officials complain, while steep hikes are politically unpalatable. 

That makes power plants most valuable to owners who also control other power-hungry businesses.

Klebanov’s search for added value, for instance, saw him named in March alongside Nazarbayev’s brother Bolat Nazarbayev in a Financial Monitoring Agency press release shaming high profile figures who had benefited from illegal cryptocurrency mining operations in northern Kazakhstan.

Neither man was arrested over the transgressions, and the FMA’s statement described the shutdown of their facilities as “voluntary.”

In the meantime, private owners of power plants have little incentive to invest in upgrades – a situation that looks unsustainable in the long run.

By Eurasianet.org

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