Information on the amendments to the legislation of RES

At present, in order to improve the investment climate in the field of renewable energy sources in the Republic of Kazakhstan, the following regulatory legal acts are amended:

1. «Rules for the organization and conduct of auction bidding»;
2. «Rules of centralized purchase and sale of electricity FSC»;
3. «PPA agreement contract for the purchase of electricity at an auction price».

Main changes:

1. Simplification of the procedure for providing documents for foreign representatives (translation of documents for choice of state or Russian languages);
2. Revision of terms to bidders in order to improve the effectiveness of auction bidding system Providing investors with the right to choose the size of the investment project when applying in the auction trading system, which will ensure an increase in the effectiveness of bidding and the flexibility to manage the size of the project. For example, when applying for auction bidding at a rate of 50 MW of installed capacity, the investor will be able to specify 40 MW as the minimum profitability threshold for the project. The electronic system will take into account the possibility of implementing the project in the range from 40 to 50 MW;
3. In order to improve the competitive environment and improve the effectiveness of bidding in the auction, it is proposed to ensure competitive conditions in the conduct of auction bidding as follows:
   - The volume of supply is not less than 130% of the demand;
   - Number of participants in auction tenders - 2;
4. Changing the validity period of the financial security of the application for participation in the auction from 90 to 150 days, which is due to the change in the terms for making financial security for the performance of the terms of the contract;
5. Simplification of the financial security of the application for participation in the auction for foreign investors.
   Non-resident banks in the Republic of Kazakhstan, long-term credit rating in foreign currency that are not lower than BBB by Standard & Poor's, BBB by Fitch Baa2 for Moody's Investors Service can issue a bank guarantee or a standby letter of credit without issue of corresponding counter-obligations;
6. Provision of financial security for the fulfillment of the terms of the PPA (contract for the purchase of electricity renewable energy) after signing contract with FSC.
   It is proposed to provide financial security for the fulfillment of conditions after signing contract within 30 days, which will make it easier for investors to obtain a bank guarantee;
7. An extension of the deadline for submission of a document confirming the start of the construction of a renewable energy object.
   The additional period, provided to investors in the amount of six months, will allow to provide necessary documentation for the beginning of construction and installation works without partial involvement of financial security for the performance of the contract’s terms;
8. Preservation of a standard contract for projects that did not have time to put into operation a renewable energy facility when performing construction and installation work in the amount of at least 70%.
   The practice of implementation of renewable energy projects shows that when building renewable energy objects investors apply step-by-step commissioning of power plants. In this situation, if the project is sufficiently developed, it is proposed to provide an opportunity to complete its implementation within one year without losing the contract of purchase. This formulation will reduce the risks of investors and increase the investment attractiveness of the industry. At the same time, the extension of the term goes to the total term of the 15-year contract;
9. It is prohibited for investors, in the implementation of renewable energy projects in Kazakhstan, to use equipments that were in operation earlier.