Utility Sector Modernization to Bring Annual Rate Increases with Subsidy Measures

As part of the national project to modernize Kazakhstan’s energy and utility sectors, utility rates are expected to increase annually by an average of 20–30%, Orda.kz reports.

Timur Kosymbayev, Chair of the Committee for Regulation of Natural Monopolies, announced this at a government briefing on Thursday.

He explained that the national project includes mechanisms to subsidize these rate increases. Loan funds — including both principal and interest — will be incorporated into the utility rates.

However, subsidies from the national budget will partially cover the interest rate to reduce the financial burden on consumers.

Ten percent of the interest will be included in the rate, and anything above that will be subsidized by the state. This way, we offset a sharp rise in rates,
 Kosymbayev explained.

He stated that next year’s planned increase will be within the 20–30% range. When asked whether this growth would be annual, he responded, “On average, yes.”

Vlast reports that the committee also previously confirmed in a response to their inquiry that the “Tariff in Exchange for Investment” program would continue under the national project. This includes increasing investment levels, with loan repayment to be guaranteed through the established rates.

To support this, the national project will legally mandate long-term utility rates — five years or more — so that both infrastructure loan servicing and direct investments by asset owners can be included in the rates paid by consumers.

Original Author: Artyom Volkov