The Loan Agreement was signed by Mr. Kanat Bozumbayev, the Chairman of Management Board of KEGOC JSC, and Mr. Sergei Shatalov, World Bank Country Manager for Kazakhstan, and Guarantee Agreement was signed by Mr. Bolat Zhamishev, Minister of Finance of the Republic of Kazakhstan. At the same time Guarantee Agreement between the Republic of Kazakhstan and the World Bank was signed by Mr. Bolat Zhamishev, Minister of Finance of the Republic of Kazakhstan, and Sergei Shatalov.

This project, in conjunction with construction of the 300 megawatt Moinak Hydroelectric Power Plant MHPP, is a key part of the Government’s strategy to reduce the electricity shortage in the Southern region of Kazakhstan. The project will enhance the capacity and reliability of the power transmission network in Almaty region and increase the share of flexible power sources in the generating facilities network of the Kazakhstan Unified Power System.

“During a decade-long collaboration within Electricity Transmission Rehabilitation Project and North-South Electricity Transmission Project, KEGOC has built a partnership with the World Bank, who has been investing in development of Kazakhstan’s electric power infrastructure. The reputation of a successful borrower allows us, during the current global recession, to receive long-term and low-cost investment for Moinak electricity transmission works. Moreover, by the end of this year, we plan to sign with the World Bank another agreement on Alma Transmission Project,” said Mr. Kanat Bozumbayev, the Chairman of Management Board of KEGOC JSC.

“KEGOC company has been one of the largest partners of the World Bank in Kazakhstan for many years. That is triggered by the vital role of electric power sector in development and modernization of the country economy. Under two Bank-financed transmission operations, Kazakhstan has developed one of the most modern and efficient power systems in the CIS,” said Sergei Shatalov, World Bank Country Manager in Kazakhstan. “Addressing power shortage issue is key for healthy development of small and medium businesses what will allow creating thousands new jobs and improving population living standards in the south of Kazakhstan.”

The Project, with a total cost of over US$68 million, consists of the construction of 220 kilovolt transmission lines from the Moinak Hydroelectric Power Plant to the Shelek and Robot substations, as well as the modernization of the Shelek and Robot substations, and consulting and technical services. Construction works will be completed in 2011. The project activities will be carried out in compliance with international standards and environmental requirements that will allow minimizing impact on the environment. The World Bank loan has a maturity of 25 years with a five-year grace period. The loan is guaranteed by the Republic of Kazakhstan.

KEGOC JSC is the System Operator of the Unified Power System of the Republic of Kazakhstan, and its main task is to maintain steady operation of the System and reliable control of the National Power Grid pursuant to current engineering, economic and ecological requirements within the government policy.

The World Bank’s overall mission in Kazakhstan is to improve people’s lives by promoting diversification and competitiveness of the economy and creating more job opportunities. Since July 1992, the Bank has provided 34 loans to Kazakhstan for the total amount of more than US$4.2 billion.