KAZAK

H
INVES
T

Investment
opportunities of Kazakhstan
Niche projects
Introduction

In order to increase investment attractiveness of the

Republic of Kazakhstan and stimulate investments
into the national economy, “National Company"
Kazakh Invest” JSC in collaboration with Deloitte and
PWC has prepared investment proposals for niche
projects in various priority sectors of the national
economy.
Niche projects - are investment projects that allow
restoring different stages of a full production cycle
(gaps in the value-added chain) in production of
goods, and provision of services demanded on the
market. These projects are aimed at modernizing
and diversifying the national economy, as well as at
developing and promoting the country's export
potential.
The choice of niche projects was based on the
strategic documents of the Republic of Kazakhstan
such as the "National Investment Strategy",
"Kazakhstan 2050", the "Strategic Plan for
Development of the Republic of Kazakhstan until
2020“, etc. In selecting projects, quantitative and
qualitative investment attractiveness criteria were
considered.
During the course of this analysis, the following
sectors of the economy were considered as priority
sectors:
• Agriculture-industrial complex;
• Mining and smelting industry;
• Chemical industry;
• Machinery construction and metallurgy;
• Other sectors.
Agriculture-industrial complex
 Expansion of a poultry meat production complex

Project description
Alel Agro is the largest poultry producer in Kazakhstan with a production capacity of 51 thd tonnes of
poultry meat p.a. (26% of the market share in Kazakhstan). It is planned to expand the capacity to 165 thd
tonnes and export the output. There is a substantial export potential in China, UAE and CIS countries with
the total capacity of the market of imported poultry more than 1 million tonnes p.a. At the same time, the
number of exports of poultry meat to Uzbekistan increased from 57 tonnes in 2016 to 172 tonnes in 2017.

Project location Investment highlights

RUSSIA
Upfront investment $329 MM

NPV $107 MM
KAZAKHSTAN

IRR 20%
ALMATY
CHINA
Payback period 8 years

Market analysis Competitive advantage

I. 50% of poultry meat consumed in Kazakhstan is I. Now the business accounts for 26% of the entire
imported. Also, a forecasted growth in consumption inner market. The management of this enterprise
presents a case for safe-haven hinter market. already designed a comprehensive plan and
Poultry meat, 2018E and 2022F (‘000 tonnes) arranged offtake contracts to increase the market
share to 50%.
2018E 398
Net import Poultry meat production capacity of the
46 26% firm in thd tonnes with associated market
2022F 597 Production
shares in Kazakhstan.

II. The potential realization markets - China and

165 40%
UAE - are currently on a growth trend. Also, bulk of
the imports are from the countries with significantly
higher import costs relative to Kazakhstan.
II. Moreover, in Zhambyl Region entrepreneurs
Poultry import in thd tonnes of China and UAE, respectively. plan to construct a brand new and efficient farm,
450 507
which will expand the distribution network to
395 390
Uzbekistan and Kyrgyzstan. The new farm will face
7% 9% no competitors as it will be the only provider of
CAGR CAGR chilled poultry in both neighbour countries. Also,
very close proximity to the end markets minimises
2015 2017 2013 2016 transport costs.
Brazil Argentina Rest Brazil USA Rest
Target Investor Mandate Important notice
Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
• access to external markets Contact Marat Birimzhan, Deputy Chairman
• supply of broiler technologies +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: EU Commission, Statistics Committee of the Ministry for national economy of the RK, Union of Poultry Farmers
of Kazakhstan
 Expansion of a poultry meat production complex

Project description
The current production capacity of 8 thd tonnes p.a. is to be increased to 20 thd tonnes p.a. The existing
company already exports its product to Kyrgyzstan. Thus, the end markets are Kazakhstan (80%) and
Kyrgyzstan (20%). The project owner has a land plot of 536 hectares and the necessary infrastructure. The
initiator expressed willingness to cover part of the required upfront investment.

Project location Investment highlights

Upfront investment $31 MM

RUSSIA

NPV $23 MM

KAZAKHSTAN IRR 21%

Payback period 7 years

ZHAMBYL

Market analysis Competitive advantage

I. Kyrgyzstan imports >60% of poultry meat it Kazakhstan exports poultry meat to Kyrgyzstan in
consumes. Kazakhstan only supplied about 8% of small amounts, but at a lower price than
Kyrgyzstan’s total import. Kyrgyzstan’s main supplier – Russia.
Importers of poultry meat to Kyrgyzstan, thd tonnes Prices by countries exporting to Kyrgyzstan, 2017, thd
30.5 USD/tonnes
0.4 23.7 Kazakhstan
22.0
12.9 1.7 0.6 1.8
4.5 Others Russia 1.20
16.0 0.2
14.0 China
15.5
3.2 5.4 Russia Belarus 1.23 -3%

2015 2016 2017 Kazakhstan 1.17

II. Kazakhstan imports ~50% of poultry meat
consumption. This and the forecasted growth in
consumption present a case for a safe-heaven
hinter market.
Value proposition
Poultry meat, 2018E and 2022F, thd tonnes
This project allows to capitalize on existing trade
2018E 398 relationship with Kyrgyzstan by expanding the
Net import
production volume and provide import
Production
2022F 597 substitution.

Target Investor Mandate Important notice

Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
▪ Supply of broiler technologies Contact Marat Birimzhan, Deputy Chairman
▪ Foreign distributor +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: EU Commission, Statistics Committee of the Ministry for national economy of the RK, Union of Poultry Farmers
of Kazakhstan
 Construction of a broiler poultry farm

Project description
The project consists of a construction of a full-cycle broiler poultry farm with a floor housing and capacity of
20 000 tonnes of poultry meat p.a. At least 50% of the total production will be sold chilled and at least 50%
of the output will be exported to the Eurasian Customs Union, Central Asia and Middle East countries. the
Initiator of the project already owns a well-developed poultry farm with a 120 mln annual eggs production
and a distribution network for poultry products.

Project location Investment highlights

NORTH Upfront investment $34 MM

RUSSIA KAZAKHSTAN

NPV $27 MM

KAZAKHSTAN IRR 27%

Payback period 7 years

Market analysis Competitive advantage

I. Export prices will be notably higher than the Cost of feed takes up 60% of the total production
prices for domestic sale. This and the low export cost of poultry meat. Feed is 50% wheat.
level of poultry meat (about 6 thd tonnes) favour
the case of exporting the end product. Annual average poultry feed
price*, 2017, thd KZT/tonne
Prices by offtaking countries, 2017, thd USD/tonne Other 40%
Project’s
Kyrgyzstan 1.8
location 39
Russia 1.9
China 2.2 -11%
Other
Kazakhstan 1.2 Feed 60%
Kazakhstani 43
regions
II. Kazakhstan imports ~50% of poultry meat
consumption. This and the forecasted growth in *wheat of class 4
consumption present a case for safe-heaven hinter
market.
Poultry meat, 2018E and 2022F , thd.tonnes)
Value proposition
2018E 398 Net import This project allows to capitalize on existing low cost
Production feed compared to the rest of the country, know-how
2022F 597
and provides safe marketing option.

Target Investor Mandate Important notice

Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
▪ Supply of broiler technologies Contact Marat Birimzhan, Deputy Chairman
▪ Long-term growth +7 7172 620620 m.birimzhan@invest.gov.kz
▪ Foreign distributor The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: EU Commission, “Kazakh-Zerno” informational and analytical agency, Statistics Committee of the Ministry for
national economy of the RK, Union of Poultry Farmers of Kazakhstan
 Construction of a broiler poultry farm

The project plan is a construction of a very efficient and brand new full-cycle broiler poultry farm based on
floor housing. The maximum capacity of the production line is 10 thd tonnes of quality and very delicious
poultry meat p.a. Investing in this business is particularly lucrative at the moment and the business is an
unparalled investment vehicle since the initiator of the project has designed the farm using leading edge
technologies. Currently, the company plans to sell its produce to inner market and neighboring countries
including Kyrgyzstan and Uzbekistan.

Upfront investment $22MM

RUSSIA

NPV $10MM

KAZAKHSTAN IRR 18%

Payback period 10 years

TURKISTAN
REGION

Market analysis Competitive advantage

I. Export prices will be notably higher than the Kazakhstan exports poultry meat to Kyrgyzstan in
prices of domestic sales. This and the low export small amounts, but at a lower price than
level of poultry meat (about 6 thd tonnes) favour Kyrgyzstan’s main supplier – Russia.
the case of exporting the end product.
Prices by countries exporting to Kyrgyzstan, 2017 (thd
Prices by offtaking countries, 2017 (thd USD/tonne) USD/tonne)
Kyrgyzstan 1.8
Russia 1.9
China 2.2
Kazakhstan 1.2 60%

II. Kazakhstan imports ~50% of poultry meat

consumption. This and the forecasted growth in
consumption present a case for safe-haven hinter
market.
Poultry meat, 2018E and 2022F (‘000 tonnes) Value proposition
2018E 398
This project allows to capitalize on the existing
Net import
trade relationship with Kyrgyzstan by expanding
Production the production volume and provide import
2022F 597
substitution.

Important notice
Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
▪ Supply of broiler technologies Contact Marat Birimzhan, Deputy Chairman
▪ Long-term supply of capital +7 7172 620620 m.birimzhan@invest.gov.kz
▪ Foreign distributor The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: Statistics Committee of the Ministry for national economy of the RK, Union of Poultry Farmers of Kazakhstan,
International Trade Centre (ITC)
 Production
Production of turkey
of citric acid meat

Project description
The project plans the expansion of turkey meat production to 20 thousand tonnes, creation of a breeding
reproducer and the modernization of the deep processing plant. The current production capacity is 9.5
thousand tonnes of turkey meat in live weight and 7.7 thousand tonnes in slaughter weight. The company
produces more than 85 products from turkey meat in the range: sausage, smoked and other delicacies. There
is a land plot of more than 200 hectares.

Project location Investment highlights

Russia
Upfront investment $38MM

NPV $75MM
Kazakkstan

IRR 29%
China
Payback period 4 years
South
region

Market analysis Competitive advantage

Kazakhstan already exports turkey meat to Russian The only company in Kazakhstan that grows
and Kyrgyzstan. Moreover there came up a need in turkeys and manufactures products from its meat in
substitution of imports for a turkey meat. industrial scale.
Company has long term offtake contracts with 4
KZ export of turkey meat, KZ export price of turkey meat,
tonnes USD/tonne wholesale buyers: 2 in Kazakhstan, 1 in Russia and 1
2 954 2 965 in Kyrgyzstan.
2 549 Kazakhstan has the lowest price on product in
16 23
6 KRG 1 652 Russian import market
2 543 2 938 2 942
Russia import price on turkey meat, 2017
usd/tonne KZ has the
RUS 2 097 cheapest import
China 2 746
2015 2016 2017
2017 price in Russia
Brazil 2 238
Kyrgyzstan Russia among importers
KZ 1 701 of turkey meat
KZ import of turkey meat, KZ import price of turkey meat,
tonnes 894 USD/tonne
France Value proposition
Poland
RUS 1 098 This project allows to capitalize on existing
122 97
82
40
72
25 Russia industrial base and take advantage of
2017 expanding export volumes in CIS countries.
2015 2016 2017
Target Investor Mandate Important notice
Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
• Supply of technologies Contact Marat Birimzhan, Deputy Chairman
• Access to external markets +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Sources: Statistics Committee of the Ministry for national economy of the RK, UN Comtrade
 Construction of a feed yard and a cattle meat
processing plant

Project description
The project plan is to expand existing meat production and processing (steaks, sausages, offals) for export.
The company exports 6 thd heads of sheep to Iran and more than 300 heads of cattle to Uzbekistan p.a. The
company has already 20 ha land plot and estimates to sell 40 thd heads equivalent amount of meat p.a. The
initiator was recognized as one of “100 new persons of Kazakhstan” for his business achievements and
trusted relations with buyers.

Project location Investment highlights

RUSSIA
NORTH Upfront investment $16 MM
KAZAKHSTAN
KOSTANAY AKMOLA PAVLODAR
WEST
EAST
NPV $15 MM
KAZAKHSTAN
ATYRAU KAZAKHSTAN KAZAKHSTAN
AKTOBE

ALMATY IRR 25%

KYZYLORDA JAMBYL
SOUTH
KAZAKHSTAN
CHINA Payback period 7 years
SOUTH
KAZAKHSTAN
UZBEKISTAN

IRAN

Market analysis Competitive advantage

The target markets are Uzbekistan and Iran. I. Quality of meat of company is certified by required
documents, making them ready for export to Iran and Uzbekistan.
Uzbekistan imports less than 1% of its beef, 98%
It has price advantage over major importer to Iran.
of which is from Kazakhstan. Import to Sheep and goat meat import prices of Iran, 2017 (USD/kg)
Uzbekistan is growing rapidly with recent Australia 6,9
softening of trade regulations Kazakhstan 5,6 21%
Bovine meat consumption in Uzbekistan (thd tonnes) II. Uzbekistan’s capital, Tashkent, is 120 km away from project
location, thus logistics price creates favorable conditions to buy
800 mln tonnes
2017 meat from South Kazakhstan region than from Russia, that was
Import: 64 tonnes
another importer in 2017 year.
2018(E) 810 mln tonnes Bovine meat import to
Import: 640 tonnes Uzbekistan (thd USD) 315 Logistics price to Uzbekistan (USD/kg)
5
Total sheep and goat meat consumption and import to Iran in Russia 0,17
2017 year (thd tonnes) 310
38 Kazakhstan 0,04 123%
Kazakhstan
Consumption 256 exported 250 2015 2017

tonnes of meat to
13 Iran and has
Import
potential to
Value proposition
0,25
increase volumes This project allows an investor to take advantage of
after lift of growing export of meat to Iran and Uzbekistan. Price and
sanctions quality are key potential drivers of sales.

Target Investor Mandate Important notice

An investor should: Candidates interested in considering this investment opportunity
must confirm this directly with Kazakh Invest.
▪ Be able to provide an offtake contract Contact Marat Birimzhan, Deputy Chairman
▪ Be a supplier of technologies +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Source: trademap.org, economy.gov.kz, worldbank.org, stat.uz

 Construction of a cattle feedlot

Project description
The business is oriented towards production of quality bovine meat and consecutive realization of produce
to China and Russia assured by offtake contracts. Now the business is an unparalled and profitable
investment vehicle due to management’s firm business plan to expand the livestock to at least 10,000 heads
of pedigree cattle. The firm possesses 2,000 heads of cattle, a slaughterhouse, which is loaded to only 30%,
and 100 000 ha of prolific land including 10,000 ha allocated for the feedlot construction.

Project location Investment highlights

Upfront investment $17 MM

KAZAKHSTAN NPV $14 MM

KARAGANDA

IRR 22%

CHINA
Payback period 6 years

Market analysis Competitive advantage

IRAN
I. China is a fast-growing and lucrative market. The price of Kazakhstani bovine meat is compatible
Import volumes of frozen meat in China 2014-2017, thd tonnes with other importers to China and Russia.
700 Bovine meat (frozen) import prices of China, 2017,USD/tonne
580
470 Brazil
Uruguay
300
Australia
Kazakhstan
Bovine meat (fresh and chilled) import prices of Russia, 2017,
2014 2015 2016 2017 thd USD/tonne
Uruguay Australia New Zealand Argentina 16,2
Brazil Rest
Uruguay 9,9
Brazil 9,0
II. Another perspective offtaker of bovine meat is Serbia 4,3
Russia. Colombia
Belarus
4,3
3,6
Bovine meat import in Russia, thd tonnes Kazakhstan 3,5
101.9 103.5
92.1
1,5% 4,7%
87.3 5,3% 92.0
0,2% 7% Value proposition
Kazakhstan This project allows to take advantage of exporting
Other countries to China while having cost competitive
Belarus advantage within China’s importer countries.
2013 2014 2015 2016 2017
Target Investor Mandate Important notice
Candidates interested in considering this investment opportunity
The investor should have:
must confirm this directly with Kazakh Invest.
▪ Long cheap financial resources Contact Marat Birimzhan, Deputy Chairman
▪ Technologies +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Source: trademap.org, economy.gov.kz, Statistics Committee of the Ministry for national economy of the RK, UN Comtrade
 Production of tomato paste

Project description
The project plan is construction of a tomato processing plant, the final product of which will be tomato paste.
The initiator of the project already has a land plot and building. The projected processing capacity is 1.5
thousand tonnes of tomato per day, which would provide 200-250 tonnes of tomato paste.
Besides import phasing, the owners target at exporting the end product to CIS countries, China, and Europe.

Project location Investment highlights

Upfront investment $23MM

NPV $63MM
KAZAKHSTAN

IRR 43%
KYZYLORDA CHINA
Payback period 4 years

Market analysis Competitive advantage

Kazakhstan imports more than half of tomato paste Kazakhstan exports paste to China in limited
consumption. Only 5-8% of production is exported. amounts, but at a lower price than China’s main
The total harvest of tomatoes in Kazakhstan suppliers – USA and Italy.
in 2017 was ~740 thd tonnes. This together
presents a case for safe-heaven hinter market. Import prices of China (USD/kg)
Tomato paste consumption in Kazakhstan’s export unit value United States of America
0.99
Kazakhstan (thd tonnes) (USD/tonne)
1.19 Italy
201 Russia
18.5 13.7 32.2 0.76 Kazakhstan
7 2 000
Tajikistan
685
2016 13.4 10.0 23.4
China Similar situation in volumes potential is observed
2015 13.9 9.6 23.6 Kyrgyzstan
1 111 in Germany, so that Kazakhstan has an opportunity
Net import Production 2015 2016 2017 to engage in exports of tomato paste to Europe.
Tomato paste imports by China Tomato paste imports by Germany,
(thd tonnes) (thd tonnes) 253
7.87 8.02
5.49 Others
51
3.03 0.56 2.22 0.41 53 Spain
Value proposition
Kazakhstan’s
0.96 1.79 This project allows to take advantage of import
share<1% Italy
5.40 149
3.88 3.14 substitution in Kazakhstan and exporting
potential with cost advantage compared to other
2015 2016 2017 2017 importers.
Other countries Italy USA
Target Investor Mandate Important notice
Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
• Supply of production technologies Contact Marat Birimzhan, Deputy Chairman
• Access to external markets +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Sources: Statistics Committee of the Ministry for national economy of the RK, JSC Caspian-Eco-Tour
 Sugar beet plant expansion and automation

Project description

The project plan is to upgrade sugar making equipment in a deep sugar beet processing plant. Capacity will
increase from 150 kt of sugar beet to 700 kt p.a. Products will be sugar (12%) and beet pulp (88%). There is a
5-year agreement with offtakers from China to sell all volumes of beet pulp. Raw sugar beet is planned to be
purchased from peasants of the southern Kazakhstan. The initiator owns about 500 ha.

Project location Investment highlights

RUSSIA
Upfront investment $51 MM

NPV $35 MM
KAZAKHSTAN

IRR 18%
ALMATY
CHINA
Payback period 10 years

Market analysis Competitive advantage

I. Currently the market is concentrated and one large Kazakhstan supplies 22% and 13% of total imports of
player controls 99% of the market, which creates market Uzbekistan and Tajikistan, respectively.
entry for more efficient companies. Prices comparison in 2017, USD/tonne
Sugar producing plants in Kazakhstan, 2017 589 558
Almaty 15 433 467
401 399
South Kazakhstan 9

North Kazakhstan 2

II. Kazakhstan is highly dependent on imports: more

than 50% of its sugar consumption is imported in a RU Brazil Cuba Target TJ UZ
processed or raw form. Import prices to
Import prices to indicated
Sugar in Kazakhstan in 2017, thd tonnes
Kazakhstan countries
Imports 450
Exports 37
Value proposition
Production 380
Internal Demand 793
This project allows to take advantage of a high unmet
domestic demand for sugar and the potential to occupy
III. Sugar beet cultivation is attractive with subsidies share of less efficient suppliers importing to Central Asian
on fertilisers (up to 50%) and water (20-90%). countries.

Target Investor Mandate Important notice

Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
• Supply of production technologies Contact Marat Birimzhan, Deputy Chairman
• Access to external markets +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: Statistics Committee of the Ministry for National Economy of
the Republic of Kazakhstan, zakon.kz, sugar.ru, ITC, AgroBusiness 2020
 Modernization
Production of aacid
of citric starch plant for the
production of citric acid

Project description

The project plan is to modernize facility for deep processing of maize, with final product as citric acid. The
planned capacity of processing citric acid is 10 000 tonnes per year. The company owns a land of 3 000 ha
and currently processes maize to produce starch and molasses. Maize is mainly purchased from agricultural
enterprises in Almaty region. Currently, the company has offtakes on existing product line with main
consumers as Khamle and Rakhat.

Project location Investment highlights

Upfront investment $22 MM

RUSSIA

NPV $33 MM
KAZAKHSTAN

IRR 31%
Almaty
region CHINA
Payback period 6 years

Market analysis Competitive advantage

The share of import of citric acid consumption in Domestic price of citric acid will be 30% cheaper
most CIS countries is ~90%. Raw material for in comparison with import price of China, which
citric acid is maize, which has annual increase in has a status of cheapest exporter of product to CIS
production of ~5% in Kazakhstan. countries.
Import of citric acid, The company already has offtakes with large
thd tonnes 44.6
~90% of citric Kazakhstan confectionary companies.
4.9
acid in CIS
countries is Import price vs domestic price in 2017,
imported from USD/tonne
39.7
China Domestic price
2.0 3.0
0.0 0.4 China 1 046 for citric acid is
2.0 2.6
Others China -30% planned to be
Uzbekistan Kazakhstan Russia
Kazakhstan 732 30% cheaper
in Kazakhstan
Production of maize in Import prices in Kazakhstan
Kazakhstan, thd tonnes in 2017, USD/tonne

785
Value proposition
734 762 China 1 046
664
This project allows to take advantage of import
Germany 1 689
substitution on a market, while having cost
Russia 1 797
competitive advantage.
2014 2015 2016 2017
Target Investor Mandate Important notice
Candidates interested in considering this investment opportunity
An investor should have: must confirm this directly with Kazakh Invest.
• Supply of production technologies Contact Marat Birimzhan, Deputy Chairman
• Access to external markets +7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: Statistics Committee of the Ministry for national
economy of the RK, UN Comtrade
 Production of flax oil

Project description
The project plans is construction of plant for deep processing of flax to extract a flax oil with capacity of
16,000 tonnes p.a.. The company is already engaged in growing cereals, oilseeds and legumes.
The company has its own field where there are about 5 thousand ha of rapeseed and 10 thousand ha flax on
the fields of the local partners.

Project location Investment highlights

NORTH
KAZAKHSTAN Upfront investment $16 MM

NPV $12MM
KAZAKHSTAN

IRR 20%
CHINA
Payback period 8 years

Market analysis Competitive advantage

Kazakhstan exports most produced flax oil to Kazakhstan has a cost advantage among other
China. The amount of arable land is 831 thd ha in countries in exporting product to China.
KZ. There is a potential of exporting product to
Japan. China`s oil import prices (USD/tonne), 2017
Flax oil production
China’s import
Flax oil export (tonnes) in KZ, thd tonnes
volume, (tonnes)
Other countries 33 000 Kazakhstan
China +703% 17 400
KZ 2015 6.0 Turkey
1%
CAGR 53%
2016 24.0
2 400 99% USA
OC
270 7% 100% 47% 2017 35.0
Belgium
93%
2017
2015 2016 2017
Japan import (tonnes) Japan`s oil import prices (USD/t)
1 908
Germany 1 000
OC Value proposition
39% Belgium 1 200
This project allows to take advantage of exporting
USA 2 000
Belgium product having a cost advantage compared to
61% New Zealand 11 700 other importers.

Target Investor Mandate Important notice

Candidates interested in considering this investment opportunity
An investor should have:
must confirm this directly with Kazakh Invest.
▪ Offtake large volumes of oil Contact Marat Birimzhan, Deputy Chairman
▪ Be a supplier of technologies +7 7172 620620 m.birimzhan@invest.gov.kz
▪ Long term investments The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Sources: Statistics Committee of the Ministry for national economy of the RK, UN Comtrade
 Expansion of a greenhouse complex

Project description

The project plan is construction of a greenhouse complex of 8ha, which will grow up to 1 350 tonnes of
cucumbers and 4 000 tonnes of tomatoes. At the moment the company already has a complex of 11,8ha
with capacity of production up to 7 200 tonnes of vegetables located in Almaty city. The greenhouse
complex will be built according to the Dutch technologies of the company “Dalsem”. The company also has
established offtakes and cooperates with companies such as “Magnum”, “Lime Group” and others.

Project location Investment highlights

Upfront investment $26 MM

RUSSIA

NPV $4 MM
KAZAKHSTAN

Almaty IRR 13%

region CHINA

Payback period 10 years

Market analysis Competitive advantage

I. Main exporters of tomatoes to Kazakhstan are Company has long-term offtake contracts for the
Uzbekistan and China, with aggregate volume whole amount of produced vegetables, 50% of
~90% of total import in 2017. which exports to Russia and 50% goes to internal
Tomatoes import to Kazakhstan Average import prices of market of Kazakhstan.
by country, thd tonnes 80 tomatoes, USD/tonne Company possesses greenhouse complex of 5-th
66 10%
7% 54
generation with most developed technologies.
41% China 633
42% 18% Imported tomatoes price in Russia vs prices of
17%
Uzbekistan 772 producer in Kazakhstan, USD/tonne
49% Kazakhstan has
51% 65%
Azerbaijan 988 comparative price
Others Uzbekistan
Kazakhstan 1 004 advantage among
2015 2016 2017 China other importers in
II. Kazakhstan had ~1% of market share of Russian Morocco 1 232
Russian market
import of tomatoes in 2017. During 2015-2017, China 1 244
Tomatoes import to Russia Kazakhstan’s export of
by country, thd tonnes tomatoes to Russia
665 increased more than 30 Value proposition
10% 516 times
462
13% 13%
30% This project allows to capitalize on implementation of
21%
19% 21% Azerbaijan modern greenhouse complex. Also, it allows to
64% 27% 21% China provide import substitution and export
33% 28% vegetables through having competitive export prices.
Morocco
2015 2016 2017 Others
Target Investor Mandate Important notice
• Long cheap financial resources Candidates interested in considering this investment opportunity
must confirm this directly with Kazakh Invest.
Contact Marat Birimzhan, Deputy Chairman
+7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: Statistics Committee of the Ministry for national
economy of the RK, International Trade Centre
 Construction of a trout farm

Project description

The project provides for the organization of the activities of a commercial fish breeding enterprise in the
basins along the Chilik river, Almaty region, as well as in the cages at the Bartogai reservoir. The total
volume of production will be 7 200 tons of trout fish per year. The company is the largest producer of
rainbow trout in the Republic of Kyrgyzstan. The current capacity of production and processing of products
is 600 tons of rainbow trout per year.

Project location Investment highlights

Upfront investment $16 MM

RUSSIA

NPV $37 MM
KAZAKHSTAN

Almaty IRR 41%

region CHINA

Payback period 5 years

Market analysis Competitive advantage

I. Main exporter of trout fish products to The company is the largest producer of rainbow
Kazakhstan is Russia with share ~98%. trout in the Republic of Kyrgyzstan, and it has
Trout fish import and production in Import of trout fish long-term offtake contracts with Russia for the
Kazakhstan, tonnes products to Kazakhstan whole amount of produced trout fish.
496 declined ~2,4 times and
16 Trout fish import prices of Russia vs prices of
production increased
307 ~2,8 times during producer in Kazakhstan, USD / tonne
213 38 2015-2017
480 Kazakhstan has
41 Kazakhstan 4 000
269 comparative price
172 Import
Turkey 4 131 advantage among
Production other importers in
2015 2016 2017 Belarus 4 596
Russian market
II. Main exporters of trout fish products to Russia Armenia 5 721
are Armenia and Turkey with share ~95%. Iran 5 794

Trout fish import to Russia During 2015-2017,

by country, thd tonnes import of trout fish
3.6
3.0 4% products to Russia Value proposition
2.2 6% increased 2,4 times
5% 28% 48% The project has the benefits of location, possibility
25%
Others Turkey of efficient use of water resources for trout
66% 48%
70% Armenia production, and potential for import
substitution and increase export volume.
2015 2016 2017
Target Investor Mandate Important notice
• Long cheap financial resources Candidates interested in considering this investment opportunity
must confirm this directly with Kazakh Invest.
Contact Marat Birimzhan, Deputy Chairman
+7 7172 620620 m.birimzhan@invest.gov.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: Statistics Committee of the Ministry for national
economy of the RK, International Trade Centre
Mining and smelting industry
Mining and smelting industry

Progress gold ore deposit

Project overview: Market prerequisites:

The extraction of gold ores at Progress deposit
gold ore deposit, as well as their further
processing at the enrichment factory
Investment amount: US$ 44,504 thousand
Capacity: 851 kg of gold/year
Product: Cathodic gold
Location:
Karaganda Oblast, Karkaralinsky district
Project implementation period:
8 years (until 2025)
Selling market: Kazzinc, Kazakhmys and Tau-
Ken Altyn state plant refineries purchase Dore
gold and cathode gold
• Growth in world demand – gold is one of
the main materials used in the jewellery
industry and frequently as a main
currency metal.
• Shortage of gold supply in the market -
Industry analysis shows that domestic
gold production does not cover its
primary use in Kazakhstan.
• The cost of production is low due to the
availability of cheap raw materials with
estimated gold reserves of 1,160 tonnes
(1.8% of global reserves) and a metal
content ratio in ore of more than 6.3
grams/tonne.

Key investment indicators Project profitability

57%
50,000 60%
Indicator Result 55%
45,000 50% 49%
47%
Investment amount, US$ 50%
44,504 40,000
thousands 35,000
40%
Project NPV, US$ thousands 12,371 30,000
US$ thousands

25,000 30%
IRR 22% 20,000
20%
15,000
EBITDA margin 52% 10,000
34,505

35,131

34,868

43,653

30,200

10%
5,000
Payback period, years 5.1 0 0%
Year 2 Year 3 Year 4 Year 6 Year 8

Discounted payback period, years 6.3 Revenue, US$ thousands EBITDA margin, %

Project location: Karaganda Oblast,

Karkaralinsky district Progress deposit reserves

Unit of Inventory balance

measure
Cat. С1 Cat. С2
thous.
Ore 274.8 7.3
mt

kg 1,523.6 14.6
Au, average
content
g/mt 5.54 2.0

mt 0.6 0.1
Ag, average
conent
g/mt 2.1 13.7

KAZAKH INVEST:
January 2018 53
Investment proposal
Mining and smelting industry

Kokbulak iron ore deposit

Project overview: Market prerequisites:

Development of Kokbulak iron ore deposit and • Large iron ore reserves – Kazakhstan
build concentrate enrichment plant ranks 11th in the world in terms of iron
Investment amount: US$ 418,986 thousand ore reserves with a 2% share of global
reserves.
Capacity: 8-million tonne/year
• High demand - Iron ore demand is, first
Product: of all, conditioned by the demand for
Concentrate with an iron content of at least steel, which, in turn, directly reflects
60% to produce steel global economic development trends.
Location: • Export potential – Since the volume of
Aktobe Oblast, Aktobe-Steel Production LLP iron ore produced in Kazakhstan meets
domestic demand in full, the bulk of
Project implementation period: pellets and concentrate produced is
24 years, including construction period exported, predominantly to Russia and
Selling market: China (90-99%).
Domestic market, Russia and China

Key investment indicators Project profitability

Indicator Result 1,000,000 23% 25%

900,000 21%
20%
Investment amount, US$ thousands 418,986 800,000 18% 20%
700,000
Project NPV, US$ thousands 36,668
600,000 15%
US$ thousands

12%
500,000
IRR 14.9%
400,000 10%
5%
300,000
EBITDA margin 24%
276,913

471,748

626,980

640,858

654,925

906,006

200,000 5%
100,000
Payback period, years 9.4
0 0%
Year 4 Year 5 Year 6 Year 7 Year 8 Year 24
Discounted payback period, years 16.3 Revenue, US$ thousands EBITDA margin, %

Project location: Kokbulak deposit reserves

Aktobe Oblast, Shalkar district Reserves,
Sulphur,
Class million Fe, % P 2O 5, %
%
tonnes

Central zone

B 163.1 41.3 1.67 0.06

C1 198.1 37.8 1.48 0.09
Total: 361.2 39.4 1.57 0.08
North zone
C1 561.9 42.1 1.46 0.06
C2 49.3 37.9 1.36 0.06
Total: 611.2 38.1 1.39 0.06
South zone
C2 295.9 35.2 1.38 0.09
Total: 295.9 35.2 1.38 0.09
Off-balance
C1 410.7 26.6 0.99 0.11
C2 238.1 28.3 1.09 0.1
Total: 648.8 27.2 1.03 0.11

KAZAKH INVEST:
January 2018 54
Investment proposal
 Mining and metallurgical complex

Development of Batalinskoye and

Krasnoarmeyskoye copper ore deposits

Project description: Market conditions:

The Project involves construction of copper ore
beneficiation industrial plant at Batalinskoye and
Krasnoarmeyskoye deposits that are located in
Kostanay Oblast.
Product: copper concentrate (incl. subsequent
processing at Kazzinc LLP’s plant in Ust-
Kamenogorsk Oblast, which will then be sold to end
customers).
Initiator: Mystau LLP.
Location: Denisovsky district, Kostanay Oblast.
Potential markets: non-ferrous metal processing
plants in CIS, China and Europe.
Large copper reserves. Kazakhstan holds the 6th
place in the world for its copper reserves of 36,6
million tonnes, which accounts for 4,7% of global
reserves.
High demand. It is expected that refined copper
demand will have a constant growth for the
following years because copper is the major factor in
economic activity and modern technological society.
The expected demand growth for the refined copper
will reach 2.99% in 2018 and 2.15% in 2019.
Price growth. Global market prices for refined
copper demonstrate increasing dynamics related to
increased demand for that product as a result of
global economic stabilization. According to the
forecasts, a moderate increase in copper prices is
expected during the following years: 2020 – US$
6833, 2021 – US$ 6849 per tonne.
Export potential. The trade deficit in products such
as copper sheets, strips and tapes indicates the
import substitution potential. Also, Kazakhstan has
an opportunity to increase its exports to China and
neighbor countries.

Key investment indicators of the Project Project profitability

400,000 60%
Indicator Results 50%
350,000 43% 44% 45%
Project implementation period, years 17 50%
41%
US$ thousands

300,000 39%
incl. investment stage, years 2 40%
250,000
operational stage, years 15 29%
200,000 30%
Investment amount, US$ thousands 298,600
56,758

150,000
21,756

20%
110,705

253,937

329,443

300,074

Project NPV, US$ thousands 136,091 100,000 368,432

IRR, % 21.2% 10%
50,000
EBITDA margin, % 45% - 0%
Payback period, years 8.2 Year 3 Year 4 Year 5 Year 7 Year 9 Year Year
10 17
Discounted payback period, years 10.9 Revenue, US$ thousands EBITDA margin, %

Project location:
Denisovsky district, Kostanay Oblast
Deposit reserves
Balance
Batalinskoe and
Indicator Unit reserves by
Krasnoarmeyskoe deposits
С2 category
Astana Batalinskoye
Copper thous. Tonnes 561.7

Ore thous. Tonnes 130,899.7

Content % 0.43-0.45
Krasnoarmeyskoye
Copper thous. Tonnes 203.9
Almaty
Ore thous. tonnes 85,050.20
Content % 0.24

KAZAKH INVEST:
August 2018. 1
Investment proposal
 Mining and metallurgical complex

Construction of hydrometallurgical
plant for cathode copper production

Project description: Market conditions:

The Project considers the construction of copper ore
processing industrial plant which will be targeted
towards cathode copper production with a capacity
of 5000 tonnes per year.
Product: cathode copper (pure copper of no less
than 99,99%).
Capacity: 5000 tonnes of cathode copper per year.
Production process:
extraction – open-pit and underground; processing
– flotation and heap leaching.
Initiator: AK Minerals LLP – the owner of the
exclusive copper processing right at Ai-Karaaul.
Location: East-Kazakhstan Oblast. The Plant will be
located in Urjar District, 40 km. away from Ayagoz
town, and relatively close to the Ai-Karaaul deposit.
Potential markets: Kazakhstan, Russia and China.
Large copper reserves. Kazakhstan holds the 6th
place in the world for its copper reserves of 36,6
million tonnes, which accounts for 4,7% of global
reserves.
High demand. It is expected that refined copper
demand will have a constant growth for the
following years because copper is the major factor in
economic activity and modern technological society.
The expected demand growth for the refined copper
will reach 2.99% in 2018 and 2.15% in 2019.
Price growth. Global market prices for refined
copper demonstrate increasing dynamics related to
increased demand for that product as a result of
global economic stabilization. According to the
forecasts, a moderate increase in copper prices is
expected during the following years: 2020 – US$
6833, 2021 – US$ 6849 per tonne.
Export potential. The trade deficit in products such
as copper sheets, strips and tapes indicates the
import substitution potential. Also, Kazakhstan has
an opportunity to increase its exports to China and
neighbor countries.

Key investment indicators of the Project Project profitability

Indicator Results 50,000 54% 60%
Project implementation period, years 11 45,000 49%
40,000 50%
Incl. Investment stage, years 1
US$ thousands

35,000 36% 38% 33% 40%

Operational stage, years 10 30,000 31%
Investment, US$ thousands 25,192 25,000 30%
20,000
Project NPV, US$ thousands 28,455 20%
15,000
16,388

34,438

35,287

40,665

42,130

43,480
IRR, % 50.3 % 10,000 10%
EBITDA returns, % 41% 5,000
- 0%
Payback period, years 3.9
Year 2 Year 4 Year 6 Year 9 Year 10 Year 11
Discounted payback period, years 4.3 Revenue, US$ thousands EBITDA margin, %

Project location: Ai-Karaaul deposit reserves

East-Kazakhstan Oblast
Open-pit Underground
Indicator

Oxidized Sulfide Sulfide

Astana
Copper,
Ai-Karaaul 30,1 25,6 12,7
thousand tonnes
copper-ore Copper content,
1,56 1,39 1,43
district %
Silver, tonnes - 13,0 5,3
Almaty
Silver content,
- 7,0 5,9
g/tonne

KAZAKH INVEST:
August 2018. 1
Investment proposal
 Mining and metallurgical complex

Production and processing of gold and

silver ores at Kumysti deposits area

Project description: Market assumptions:

Extraction and processing of gold and silver ores at
Kumysti filed (the "Project")
Commercial products: gold and silver
concentrates
Output capacity:
640 kg of gold and 3.9 tonnes of silver per annum
Project implementation period: 11 years
Initiator: Central Asia Mining Co LLP. The company
explores alluvial gold in Kumysti area.
Project implementation location: Тurkestan
Oblast, Suzaksky district
Potential markets: The concentrate will be
processed at production facilities of KazTsink LLP
and Tau-Ken Altyn LLP with subsequent sale of the
final product to these companies or to other
consumers.
Raw materials availability – Low COGS is
achieved due to the availability of own cheap raw
materials base. Kazakhstan holds the 6th place in
the world for the amount of its explored gold
reserves. Silver reserves in Kazakhstan are
discovered in more than 100 ore fieds.
Export potential – Taking into account the fact
that 24% of the global demand for gold comes from
China, Kazakhstan has a huge export potential.
Kazakhstan has exported 4,500 tonnes of gold-
bearing ore to China in 2017. Also, one of the other
main importers of Kazakhstan gold is Russia, which
has imported 7,349 tonnes of gold-bearing ore in
2017.
In addition, China and Russia are among the top 10
silver importing countries as of 2017.

Key investment indicators Project profitability

Index Results 35,000 80%
68% 67% 67% 68%
Project implementation period, years 11 30,000 70%
US$ thousands

51% 60%
incl. investment stage, years 1 25,000
operational stage, years 10 50%
20,000
Investment, US$ thousands 41,775 26% 40%
15,000
30%
Project NPV, US$ thousands 34,852 10,000
32,156
29,358

29,305

30,076

13,780

20%
8,546

IRR, % 41.7% 5,000 10%

EBITDA returns, % 60.1% 0 0%
Payback period, years 3.6 Year 2 Year 3 Year 4 Year 6 Year Year
10 11
Discounted payback period, years 4.2 Revenue, US$ thousands EBITDA margin, %

Project location: Kumysti field reserves

Turkestan Oblast, Suzaksky district Gold
Name of the deposit Silver
reserves, Category
(ore occurrence) reserves, kg.
kg.
Mynshukur (aaluvial) 309.8 619.6 C1
Altyntau (hard-rock) 320 960 P1
Astana
Terbakty (hard-rock) 770 2,310 P2
Aktobe (hard-rock) 2,000 6,000 P2
Shovan (hard-rock) 359 2,154 С1+С2

Zholbarysty (hard-rock) 835 5,010 С1+С2

Almaty
Kumysti field Kelinshektau (hard-
2,205 13,230 С1+С2
rock)
Verhne-Kumysti (hard-
879.4 5,276.4 С1+С2
rock)
Nizhne-Kumysti (hard-
875.3 5,251.8 С1+С2
rock)

KAZAKH INVEST:
August 2018
Investment Proposal
 Mining and metallurgical complex

Development of gold and lead deposits

at the Mayatas field in Karaganda Oblast

Project overview: Market assumptions:

The project considers additional exploration and
construction of an industrial plant for extraction and
beneficiation of gold and polymetallic ores at
Mayatas ore field in Kostanay Oblast.
Commercial products and average annual
output:
Processing of 700 thousand tonnes of ore per year
(containing gold and lead). Concentrates are
planned to be processed at the production facilities
of Kazzinc LLP (and at other plants) with subsequent
sale of the final product in the domestic and foreign
markets.
Initiator: Mayatas LLP (100% subsidiary
organization of КazLead LLP).
Project implementation location: Arkalyk district,
Kostanay region
High and stable demand. Global gold consumption
level remains stable and high. It is widely used in
various technologies and jewelry, and it is used as a
currency back-up. Also, according to industry
forecasts, global lead consumption will exceed
production volumes by 10,000 tonnes in 2019
because of constant supply cuts.
Import substitution. Industry analysis shows that
the production capacity in Kazakhstan does not
cover the domestic demand for gold. Average
annual growth in imports of gold ore in the period
from 2010 to 2014 was equal to 93%. Also, despite
the observed stable growth in the volumes of lead
and lead ore production over the past few years in
Kazakhstan, the level of market demand covered by
domestic production was only equal to 46%.
Export potential. Today, China is the main
importer of lead ores and concentrates from
Kazakhstan. In 2016, China has imported a record
amount of metal from Kazakhstan – 51,595 tonnes.

Key investment indicators Project economics

Index Results 50,000 80%
68% 67%
Project implementation period, years 13 70%
40,000 58%
US$ thousands

incl. the investment stage, years 5 51% 60%

47% 44% 50%
operational stage, years 8 30,000
40%
Investment, US$ thousands 21,581 20,000 30%
28,153

31,949

45,358

Project NPV, US$ thousands 66,103 20%

19,676
2,269

9,329
10,000
IRR, % 215.8% 10%
56% 0 0%
EBITDA returns, %
Year 2 Year 3 Year 4 Year 5 Year Year
Payback period, years 2.6 10 13
Discounted payback period, years 2.7 Revenue, US$ thousands EBITDA margin, %

Project location: Arkalyk district, Kostanay Mayatas field reserves

region
Metal
Fields Ore Content
quantity
Gold
Uvalnoye
Astanа 6,800
Yuzhnoye 1.18
thousand 8,024 kg.
Mayatas ore field Daykovskoyе g./tonne
tonnes
Other
Lead
5,426
97,770
Zarechnoye thousand 1.8%
Almaty tonnes
tonnes

KAZAKH INVEST:
August 2018 1
Investment Proposal
 Mining and metallurgical complex
Expansion of mining and processing of
copper-nickel ores at Maksut deposit

Project description Market assumptions:

Expansion of mining and processing of copper-nickel
ores at Maksut deposit in East Kazakhstan Oblast
(«Project»).
Project goal
An increase in mining and processing of copper-
nickel ores at Maksut beneficiation plant from
400,000 tons to 1.4 million tons of ore per year
Project initiator
BAST JSC mining company (developer of Maksut
copper-nickel deposit).
Production and average annual output:
• 21% copper concentrate – 24,3 thousand tonnes
• 4% nickel concentrate – 57,8 thousand tonnes
Output capacity:
1,4 million tonnes of ore per year
Project location:
Abay district, East-Kazakhstan Oblast
Availability of raw materials base– Kazakhstan
holds the 6th place in the world for its copper
reserves of 36,6 million tonnes, which accounts for
4,7% of global reserves. Nickel reserves in
Kazakhstan are measured at 1,5 million tonnes,
which is 2% of the world’s nickel reserves.
Growing demand– The demand for refined copper
is expected to increase by 2,99% in 2018 and by
2,15% in 2019. In 2017, according to the Bureau of
world statistics of metals, the deficit of refined nickel
on the world market amounted to around 96
thousand tonnes.
Rising metal prices– According to forecasts from
the world bank, a moderate growth in copper prices
is expected : 2018 – US$ 6800, 2021 − US$ 6849
per tonne. Over the period of 2018– 2022, the price
of nickel will rise by 3% on average.
Export potential– Given the geographical
advantage, Kazakhstan has potential to export
products to China.

Key investment indicators Project Profitability

Indicator Results
60,000 27% 30%
Project implementation period, years 20
22%
50,000 25%
US$ thousands

incl. investment stage, years 2 15%

18%
operational stage, years 20 40,000 20%
Investment, US$ thousands 24,979
30,000 15%
Project NPV, US$ thousands 20,870 9% 7%
20,000 10%
47,551
36,812

54,447

42,083
IRR, % 26.6%
11,071
10,905

EBITDA returns, % 20.6% 10,000 5%

Payback period, years 5.7 0 0%
Discounted payback period, years 8.0 Year 1 Year 2 Year 3 Year Year Year
10 15 20
Revenue EBITDA margin, %

Project Location: The Mineral Resource Report of the Maksut

Abay district, East Kazakhstan Oblast deposit in accordance with the JORC Code for
July, 2017

Astana Resource Avg. content Avg. Content

Tonnage
Category of Cu, % of Ni, %
Maksut
deposit

Measured 26.8 mil 0.44 0.35

Almaty
Inferred 16.7 mil 0.38 0.28

Total 43.5 mil 0.41 0.33

KAZAKH INVEST:
August 2018 1
Investment proposal
 Mining and metallurgical complex

Steel production at the Velikhovskoye deposit

in Aktobe Oblast

Project Description: Market assumptions:

The project provides for the construction of a
complex for the production of steel, through the
beneficiation and processing of iron-bearing ores at
the Velikhovskoye Yuzhnoye deposit in the Aktobe
region.
Raw materials:
Low alloy construction steel, carbon construction
steel, quality carbon construction steel
Initiator: “DP “Aktobe-Temir-VS” JSC
Location: Kargalinsky district, Aktobe oblast
Potential markets: Kazakhstan, Russia, China
Steady demand for steel. High rates of historical
production growth and the strategic importance of
further development of industries using steel as raw
materials create a stable demand for the products
that the project is going to produce.
Further growth in demand for steel. According
to the forecasts of the International Steel
Association, the global volume of demand for steel
and steel products will increase by 1.8% and 0.7%
in 2018 and 2019 respectively.
Potential for import substitution and export of
steel. The existence of the trade deficit over the
past few years shows a good potential for import
substitution and the availability of stable demand for
steel on the domestic market of Kazakhstan. Also,
due to the geographical proximity of large world
steel consumers such as Russia and China, there is
good export potential for the supply of products to
these countries.

Key investment indicators Project Profitability

Index Results 900 39% 40%
800 38% 39%
Investment, US$ thousands 550,727 700 38% 38% 39%
37%
600 38%
US$ millions

Project NPV, US$ thousands 421,198

500 37% 38%
37%
IRR, % 25,9% 400 37%
300 37%
EBITDA returns, % 38% 200 36%
306

471

596

625

622

611

821

100 36%
Payback period, years 6.8
0 35%
Discounted payback period, years 8.8 Year 4Year 5Year 6Year 7Year 8 Year Year
14 23
Revenue, US$ mln EBITDA margin, %

Project location: Kargalinsky district, Aktobe Estimation of resources according to JORC

Oblast
Average
Cut-off
Type Category tonnage Content
grade
Fe (%)

Magnetite
resources, Measured 16 112,851,680.80 20.91
Velikhovskoye South ore body – I
Deposit Astana Martite resources
Measured 16 4,455,263.52 20.86
<30% Fe
Magnetite
resources, Inferred 16 344,762,786.56 20.02
ore body – I
Magnetite
resources, Inferred 16 9,829,786.72 20.18
ore body – II
Martite resources
Inferred 16 17,570,097.36 19.59
<30% Fe
Martite resources
Almaty >30% Fe
Inferred 20 4,991,815.92 41.00

Total - - 494,461,430.88 20.43

Report on the Mineral Resources of the Velikhovskoye South deposit

in accordance with the JORC Code for February 2, 2012
KAZAKH INVEST:
September 2018 1
Investment proposal
 Mining and metallurgical complex

Development of the Berkarinskoye deposit

in the East Kazakhstan Oblast

Project description: Market prerequisites

This investment project (the "Project") involves
development of the Berkarinskoye field in East
Kazakhstan Oblast, which includes additional
exploration, extraction, and processing of ore
containing copper and silver.
Product: Refined copper, refined silver
Project initiator: Nouvelle Mining LLP
Location: The Berkara site is located on the
territory, which is a part of Semey city
administration in East Kazakhstan Oblast
Consumer market:
Copper - plants processing non-ferrous metals in
CIS, China and Europe.
Silver - refining plants of Kazakhstan, Russia and
China
High demand. The expected demand growth for
the refined copper will reach 2.99% in 2018 and
2.15% in 2019.
According to data by the Silver Institute, over the
last five years, there was a worldwide silver deficit
(in 2017, the deficit was 35 million ounces [810
tonnes]). At the same time, annual metal production
is declining (a decrease of 4% in 2017).
Price growth. According to forecasts, a moderate
increase in copper prices is expected in medium-
term time perspective.
Export potential. The trade deficit in products such
as copper sheets, strips and tapes indicates the
import substitution potential. Also, Kazakhstan has
an opportunity to increase its exports to China and
neighbor countries.
Also, there is a potential for exporting silver to China
and to Russia. According to the results of 2017,
these countries are among the top 10 largest world
silver importers.

Key investment indicators Project profitability

Indicator Result 90,000 69% 70% 70% 80%
Project implementation period, years 10 80,000 63% 70%
58% 56% 55%
70,000
US$ thousands

incl. investment stage, years 3 60%

60,000
Operating stage, years 7 50%
50,000
Investment amount, US$ thous. 25,258 40%
40,000
Project NPV, US$ thous. 59,040 30%
30,000
64,511
37,666

36,887

38,595

46,699

73,473

76,872

20,000 20%
IRR, % 63.2%
10,000 10%
EBITDA margin, % 63%
0 0%
Payback period, years 4.5
Year Year Year Year Year Year Year
Discounted payback period, years 4.9 4 5 6 7 8 9 10
Revenue, US$ thousands EBITDA margin, %

Location: The Berkara site is located on the Proprietary calculation of Eastern Berkara
territory, which is a part of Semey city reserves, 2018
administration in East Kazakhstan Oblast
Cut-off Copper Silver
Ore,
Ore type grade, content, content,
tonnes
% % g/tonne
Astana Oxidized
0.5 1,896,900 1.29 -
ores
Berkara field
Mixed ores 0.5 1,384,801 2.03 19.3

The presented data is the result of preliminary estimates of

reserves for East Berkara site, performed in Micromine based on the
Almaty
drilling results of 2016-2017.

KAZAKH INVEST:
August 2018 1
Investment proposal
 Mining and metallurgical complex

Extraction and processing of gold-bearing

ores at Shokpar and Gagarin deposits

Project overview: Market assumptions:

Extraction and processing of gold-bearing ores of
the Shokpar and Gagarin deposits (the "Project")
Commercial product: bulk concentrates of gold
and silver.
Output capacity: 17,531 kg of gold and 90,764 kg
of silver over the whole project operating period.
Production process: Mining – open-pit and
underground; Processing – direct collective flotation
Project implementation period: 14 years, incl.
the development of deposits in the meantime.
Initiator:
Tau-Ken Samruk National Mining Company LLP –
national operator of mining assets in Kazakhstan,
which has a priority right to acquire a license for
exploration and extraction of mineral resources.
Project implementation location: Zhambyl Oblast
Potential markets: Kazakhstan
Raw materials availability – Low COGS is
achieved due to the availability of own cheap raw
materials base. Kazakhstan holds the 6th place in
the world for the amount of its explored gold
reserves. Silver reserves in Kazakhstan are
discovered in more than 100 ore fieds.
Export potential – Taking into account the fact
that 24% of the global demand for gold comes from
China, Kazakhstan has a huge export potential.
Kazakhstan has exported 4,500 tonnes of gold-
bearing ore to China in 2017. Also, one of the other
main importers of Kazakhstan gold is Russia, which
has imported 7,349 tonnes of gold-bearing ore in
2017.
In addition, China and Russia are among the top 10
silver importing countries as of 2017.

Key investment data Project profitability

Index Results 80,000 44% 50%
42% 44% 45%
Project implementation period, years 14 70,000 36% 37%
40%
60,000
US$ thousands

incl. investment stage, years 2 32% 35%

operational stage, years 12 50,000 30%
40,000 25%
Investment amount, US$ thousands 63,346
30,000 20%
Project NPV, US$ thousands 37,391 15%
41,655

63,121

68,921

70,870

41,340

18,473
20,000
IRR, % 21.1% 10%
10,000 5%
EBITDA margin, % 42% - 0%
Payback period, years 6.1 Year 4 Year 5 Year 9 Year Year Year
12 13 14
Discounted payback period, years 7.6
Revenue EBITDA margin, %
Project location: Shokpar field reserves and resources
Zhambyl Oblast
Reserves Resources
С2 P1
Ore 2,105 thous. tonnes 2,121.8 thous. tonnes
Astanа 15,151.8 kg (7.2 15,600 kg (7.4
Gold
g/tonne) g/tonne)
89.7 tonnes (42.6 78.6 tonnes (37
Silver
g/tonne) g/tonne)
Gagarin field reserves and resources
Shokpar and Reserves
Gagarin deposits Almaty
С2
Ore 1,659.6 thous. tonnes
Gold 9,430.3 kg (5.7 g/tonne)
Silver 85.4 tonnes (51.5 g/tonne)
KAZAKH INVEST:
August 2018 1
Investment Proposal
 Mining and smelting industry

Development of Zhezdybassay
copper deposits in Mangistau Oblast

Project overview: Market assumptions:

This investment project (the "Project") involves
construction of an industrial complex for the
extraction and beneficiation of copper ores at
Zhezdybassay deposit and at nearby located
deposits in the Mangystau region. Copper
concentrate is planned to be processed into cathode
copper at the copper plant KazZink, with its
subsequent sale as a final product.
Commercial product: cathode copper (in sheets)
Project initiator: Tekhnogran Aktobe LLP
Project implementation location: Mangistau
district, Mangistau Oblast
Potential market: Non-ferrous metals processing
plants of neighbouring countries, China and Europe
Large copper reserves. Kazakhstan is ranked 6th
in the world for copper reserves, which is 4.7% of
world reserves or 36.6 million tonnes in volume
terms.
High demand. Demand for the refined copper is
forecasted to increase by 2.99% and 2.15% in 2018
and 2019, respectively.
Rise in prices. According to the World Bank’s
forecast, the moderate rise in prices for copper is
expected.
Export potential. Trade deficit in considered
copper products indicates potential for import
substitution. Moreover, Kazakhstan has the
opportunity to boost export to the People’s Republic
of China and neighbouring countries.

Key investment data Project economics

Index Results 45,0 70%
60%
17 40,0 57% 59%
Project implementation period, years 54% 60%
including the investment stage, years 4 35,0 45%
40% 50%
30,0
Operational stage, years 13
mln US$

25,0 40%

%
Investment, US$ thousands 23,000 20,0 30%
12,5

Project NPV, US$ thousands 29,435 15,0

8,9

20%
IRR, % 29.5% 10,0
32,9

36,0

38,6

35,4

5,0 10%
EBITDA returns, % 39-61%
- 0%
Payback period, years 7.4
Year 3Year 6Year 8 Year Year Year
Discounted payback period, years 8.7 10 12 17
Revenue, US$ mln EBITDA margin, %

Project implementation location: Mangistau Reserves of Project’s deposits

district, Mangistau Oblast Amount
Deposits/ Reserves, Ore, Copper of
Mineral resources mln grade, copper,
occurrences category tons % thous.
tonnes
Zhezdybassay С2+Р1 6.7 0.58 39.2
Astana Dolnapinskoye С2+Р1 1.8 0.6 10.8
Sarshasaiskoye Р1 2.4 0.6 14.0
East- Shairskoye Р1 1.1 0.8 8.8
Kyzyltanskoye С2+Р1 0.8 0.6 4.8
Zhezdybassi and other Shaniyazskoye Р1 0.09 1.1 1.0
Aktau deposits Koktas Р1 0.36 0.4 0.9
Other
Almaty occurrences and Р1 2.1 0.5 10.5
areas
Total: С2+Р1 15.3 90.0

KAZAKH INVEST:
August 2018 1
Investment Proposal
 Mining and metallurgical complex
Production and processing of rare-
metal ore at the Drozhilov field

Project overview: Market assumptions:

Produce and process rare-metal ore at the Drozhilov
field in Kostanai Oblast
Commercial product and production output for
the entire Project period:
• lithium concentrate – 2,490 thousand tonnes
(lithium – 149 thousand tonnes)
• molybdenum trioxide – 176.6 thousand tonnes
(molybdenum – 118.3 thousand tonnes)
• artificial scheelite – 62.26 thousand tonnes
(tungsten trioxide – 48.6 thousand tonnes)
Initiator: JV Kazakhstan-Russian Ore Company LLP
has a contract in place to explore and produce
molybdenum and tungsten at the Drozhilov field
Project implementation location: Kostanai
Oblast, Denisov District
Potential markets: Russia, China
Growing demand for rare metals. Over the next
decade, global demand for tungsten is predicted to
increase as its use is strongly linked to the
development of the processing industry and vehicle
production. Lithium consumption in battery
production has increased significantly in recent
years as rechargeable lithium batteries are being
used more and more often in portable electronic
devices and electric car batteries.
Rising metal prices. In the last three years, the
lithium oxide price has increased 2.5 times due to
growing demand. Average prices for molybdenum
trioxide grew 20% in the same period. Prices for
tungsten derivatives are currently growing. The lack
of available financing and low metal content in ore
limit supply and act a stimulus for further rare-metal
price rises.
Raw materials base. Kazakhstan has the highest
tungsten reserves in the world (63% of global
reserves). It also has significant molybdenum and
lithium reserves.

Key investment data Project economics

Index Results
Project implementation period, years 26 610,000 50%
41%
including the investment stage, years 1 510,000 37%
40%

550,063
US$ thousands

operational stage, years 25 410,000

450,777

23% 24% 30%

Investment, US$ thousands 97.495
310,000
Project NPV, US$ thousands 337,379 13% 20%
302,916

210,000
IRR, % 44.0% 76,662 10%
110,000
EBITDA returns, % 31% 11,630
10,000 0%
Payback period, years 6.9 Year 2 Year 5 Year 7 Year 20 Year 26
Discounted payback period, years 7.4 Revenue EBITDA margin, %

Project location: Kostanai Oblast Drozhilov field reserves

Metals, thousand
Content, %
Reser- tonnes
ves,
Astana mln
tonnes
Drozhilov field Mo W Li Mo W Li

Pro-
140 263 64.3 0.19 0.05
Almaty ven

Calcu-
131 78 88.3 121 0.06 0.03 0.45
lated

Esti-
300 150 150 0.05 0.05
mated

KAZAKH INVEST:
August 2018 1
Investment Proposal
 Chemistry and
petrochemistry
 Chemical and petrochemical industry

Construction of a motor fuel and

petrochemicals production plant

Project overview: Project involves building a Market assumptions:

“Standard Petroleum” oil refinery for producing
motor fuel and petrochemicals in Turkestan Oblast.
Refining capacity: 1.85 million tonnes per year.
Raw materials used: oil, gas condensate and
their mixtures from the Kenlyk field.
Product: 1) eco-class 5 Ai-95 gasoline; 2) eco-
class 5 winter and arctic diesel; 3) gas-motor
propane-butane fuel (LPG); 4) oil coke
(preliminary stage – М150 fuel oil); 5)
petrochemicals: a mixture of aromatic compounds
(benzol, toluene and xylene - BTX), isopropyl
alcohol, naphthalene, polymers and carbamide; 6)
electricity
Initiator: Standard Petroleum & Co LLP (a part of
a major integrated holding company, which
includes a hydrocarbon exploration, drilling,
production, and trading operations).
Location: Turkestan Oblast.
Sales market: Kazakhstan, China and Russia.
Availability of raw materials. Total recoverable
hydrocarbon resources in Kazakhstan are
estimated to amount to 15 bi llion tonnes.
Proven reserves amount to 5.5 billion tonnes.
Kazakhstan is a global leader in terms of proven
oil reserves.
Import substitution. As of now, Kazakhstan oil
refineries only meet 70% of domestic demand for
motor fuel. Demand for light petroleum products is
met through imports from Russia. In Russia and
China, there is a growing demand for
petrochemicals, specifically for polymers,
naphthalene and benzol.
Growing polymer demand. According to АS
Marketing and METI, polymer demand has grown
on average by nearly 20% over the last five years.
Packaging industry development is the key driver
of the growing global demand for polymers.

Key investment indicators Project profitability

Index Results 1,400,000 30%
25% 25% 25%
Project implementation period, years 24 1,200,000 25%
US$ thousdands

1,197,637
1,000,000

1,121,941
incl. investment phase, years 2 18% 20%
17%
operating phase, years 22 800,000
188,141

902,633

15%
Investment amount, US$ thousands 300,000 600,000
652,750

10%
428,236

Project NPV, US$ thousands 460,711 400,000

3% 5%
IRR, % 31.2% 200,000

EBITDA margin, % 22.8% 0 0%

Year 3 Year 4 Year 6 Year 7 Year Year
Payback period, years 5.9 20 24
Discounted payback period, years 7.2 Revenue EBITDA margin, %

Project location: Turkestan Oblast Maximum plant output (on the final
commissioning phase), thous. tonnes per year
Product Volume
Vehicle fuel 430 - 440
Astana Diesel 280 - 290
Low pressure polyethylene 172 - 180
Naphthalene 160 - 180
BTX 152 - 160
Kenlyk field Oil coke 88 - 92
Standard Almaty Polypropylene 65 - 70
Petroleum Isopropyl alcohol 60 – 76
Plant Carbamide 60 – 65
LPG 36 - 40
Electricity up to 80 MW/hour
KAZAKH INVEST:
August 2018 1
Investment proposal
 Chemical and petrochemical industry

Construction of a liquefied natural gas

producing plant

Project overview: Market assumptions:

The project involves construction of a plant for the
production of liquefied natural gas (LNG) in Zhambyl
Oblast.
Output capacity: 52,560 tonnes of LNG per year.
Commercial product: Liquefied natural gas
Initiator: Astana-Trans-Oil LLP
Project implementation location: Sholdala
village, suburbs of the city of Taraz, Zhambyl Oblast
Main consumers:
1) Household consumers. Gasification of inhabited
areas (Akmola, North Kazakhstan, Pavlodar,
Karaganda, East-Kazakhstan Oblasts);
2) Vehicles and agricultural machinery;
3) Small energy facilities;
4) Low-mobility and stationary heavy equipment.
5) Enterprises
Availability of resources. Kazakhstan, with its
plentiful natural gas reserves, has a potential to take
a leading position among the CIS countries in the
realm of liquefied gas production.
Low level of gasification in Kazakhstan.
According to Oblast Akimats (local authorities),
gasification level in Kazakhstan was equal to
47.38% by the end of 2017. According to the
General gasification scheme, gasification coverage
of the country will reach 56% by 2030. This
statistics shows a presence of an excellent potential
for the development of the LNG industry in
Kazakhstan.
Other beneficial factors. There is no LNG
production in Kazakhstan at the time of compiling
this analysis. Thus, given the lack of competition,
insufficient level of gasification in Kazakhstan and a
number of advantages of LNG compared to other
types of fuel (cost efficiency, energy efficiency,
environmental benefits, safety), there is a good
potential for the development of LNG industry in
Kazakhstan.

Key investment data Project economics

Index Results 60,000 54%
Investment, US$ thousands 55,638 51% 52% 52% 52%
50,000 51% 52%
Project NPV, US$ thousands 64,561
21.7% 40,000 50%
US$ thous.

IRR, %
EBITDA returns, % 6.5 30,000 48%
Payback period, years 8.9 45%
20,000 46%
Discounted payback period, years 55,638
24,362

34,265

36,564

39,656

56,046
3,035

10,000 44%

0 42%
Год 2 Год 3 Год 4 Год 5 Год 6 Год 24
Revenue, US$ thous. EBITDA margin, %

Project location: Sholdala village, suburb of Product sales provision

Taraz town, Zhambyl Oblast At this moment memorandums on LNG supply have
been signed with the following companies:
• Kokshetau Trans Gas LLP
• MCPS Horgos
• KazTransGas Onimderi JSC
Astana • Shchuchinsko-Borovskaya resort area
• Regionstroy LLP, Astana Oblast
• Arys depot, Arys Kazakhstan railway station

Almaty
Taraz

KAZAKH INVEST:
August 2018 1
Investment Proposal
 Chemical and petrochemical industry
Construction of the base oil
production plant in Turkestan Oblast

Project overview: Market assumptions:

Construction of Group I, II and III base oil Availability of customers and raw materials -
production plant in Turkestan oblast There is a need to supply raw materials to HILL
Raw materials: Corporation’s operating plant for compounding
Straight-run fuel oil from “PetroKazakhstan Oil lubricating oils. Straight-run fuel oil is the main raw
Products” (PKOP) oil refinery. material for the Project, which will be supplied by
Commercial products: PetroKazakhstan Oil Products LLP (“PKOP”), an oil
high-quality base oils of Group I (1200SN), Group II refinery in Shymkent located 350 m from the future
(60N, 150N, 350N), and Group III (650N) plant.
Output capacity: Import substitution and export potential –
255 thousand tonnes of base oils per annum Kazakhstan doesn’t produce base oils, which are
used by local enterprises as a basis for creating
Initiator:
lubricants and motor oils. The foreign market
HILL Corporation Group, the only major producer of (China) is attractive for exporting due to the
lubricating oils in Kazakhstan. existence of high demand. Preliminary agreements
Project location: for selling products in Kazakhstan and in China have
Turkestan Oblast, Shymkent city industrial zone already been concluded. Volume of oil exports is
Consumer markets: expected to reach 183 thousand tonnes per year.
Kazakhstan, China

Key investment data Project profitability

Index Results 800,000 66% 68%
65%
Project implementation period, years 24 700,000 65% 66%
US$ thousands

65%
incl. the investment stage, years 4 600,000 64%
500,000 62%
operational stage, years 20
400,000 57% 60%
Investment, US$ thousands 713,004
300,000 58%
481,443

593,640

656,470

713,267
243,962

Project NPV, US$ thousands 770,807

200,000 56%
IRR, % 26.3% 100,000 54%
EBITDA returns, % 65% 0 52%
Payback period, years 6.5 Year 4 Year 5 Year 15 Year 20 Year 24

Discounted payback period, years 8.5 Revenue EBITDA margin, %

Project location: Turkestan Oblast, Shymkent Planned output capacity

city industrial zone
Product Volume, tonnes Share
Base oils 254,738 100%
Base oil 60N 20,000 8%

Astana Base oil 350N 36,044 14%

Base oil SN1200 40,470 16%
Base oil 650N 60,950 24%
Base oil 150N 97,274 38%
Secondary products 240,000 100%
PKOP oil Drilling fluid 18,000 8%
refinery Almaty Naphtha 50,542 21%
HILL Plant
Deasphaltizate 75,074 31%
Diesel fuel 96,026 40%
KAZAKH INVEST:
August 2018 1
Investment Proposal
 Chemical and petrochemical industry
Expansion of dry cyanide sodium production
in Zhambyl Oblast
t
Project overview: expansion of production
capacity of the dry sodium cyanide plant up to
30 thousand tonnes per year
Production output for the entire Project period:
30 thousand tonnes of sodium cyanide
Raw materials: ammonia, caustic soda, natural
gas and air
Commerical products: basic product - sodium
cyanide, by-product - ammonium sulfate
Initiator: Talas Investment Company LLP, which is
a part of Ontustik Financial, Trade and Industrial
Corporation Group
Project implementation Location: Industrial zone
of Karatau, Zhambyl Oblast
Potential markets: Kazakhstan, Russia, China,
other near-abroad countries
Market assumptions:
Growing demand – 85 tonnes of gold produced in
2017 by domestic gold mining companies required
more than 40 thousand tonnes of reagents, which is
3 times higher than production output of sodium
cyanide in Kazakhstan.
Import substitution and export – Kazakhstan’s
domestic need for sodium cyanide is mainly met by
imports from Russia and China. About 90% of
sodium cyanide in the world is used to process gold.
Imports of sodium cyanide to Russia and China
increased in 2014-2017 amid the increasing gold
production as their domestic enterprises couldn’t
fully meet demand for this reagent. Neighbouring
countries Kyrgyzstan and Tajikistan are completely
dependent on imports of sodium cyanide.

Key investment data Project economics

Index Results 70,000 33% 35%
32% 31%
30% 31%
Project implementation period, years 24 60,000 27% 30%

including the investment stage, years 3 50,000 25%

US$ thousands

Operational stage, years 21 40,000 20%

%
18,893

Investment, US$ thousands 21,051

30,000 15%
Project NPV, US$ thousands 41,013
20,000 10%
IRR, % 36%
36,883

43,247

60,232
27,442

49,179

10,000 5%
EBITDA returns, % 22-33%
- 0%
Payback period, years 5.1
2020 2021 2022 2023 2031 2041
Discounted payback period, years 5.9
Revenue, US$ thousands EBITDA margin, %

Project location: industrial zone of Karatau, Planned capacity of the plant

Zhambyl Oblast
2018F-
Index 2017 2020F 2021F 2022F
2019F*

50-
Load, % 100% 100% 70-80% 100%
Astana 60%

Capacity, 15,00 7,500- 10,500- 13,500-

15,000
tonnes 0 9,000 12,000 15,000

Current capacity +Future capacity

Almaty
Talas Investment Company LLP

KAZAKH INVEST:
August 2018 1
Investment Proposal
Public-private partnerships
Public-private partnership

Multi-profile Hospital in Almaty

Project overview: Market prerequisites:

Construction of a modern multi-profile
hospital to provide a full range of medical
services, as well as clinical training for
medical students and doctor retraining
Investment amount: US$ 125,717 thousand
Capacity: a hospital for 300 beds and an out-
patient clinic with a capacity of 150 visits per
shift (2 shifts, 300 visits per day)
Location: Almaty, S D Asfendiyarov Kazakh
National Medical University (“KazNMU”)
Project implementation period:
15.3 years, including 3,3 years of construction
PPP model: Concession (infrastructure
model)
Suppliers: manufacturers of medical
equipment and medicines
Clients: Almaty residents, non-residents,
foreigners, corporate clients, insurance
companies
• High demand for medical services. Almaty
and Almaty Oblast report high statistics of
hospitalizations, visits to out-patient
clinics and overload of hospital beds.
According to 2016 results, the need for
in-patient care per 100 thousand
residents in Almaty amounts to 398
hospital beds.
• Proximity to southern regions. The
majority of country population live in
southern regions, with high population
density. However, the availability of
hospital beds in these regions is poor.
• Highly demanded medical profiles are
absent among medical services rendered
by KazNMU clinics. Moreover, the
majority of KazNMU policlinics, including
the building of the university, were built
between 1932-1982, which does not
meet the modern standards of training
and retraining of medical personnel.
Overall, 71% of hospital infrastructure in
Almaty are worn out.

Key investment indicators Revenue forecast

93%
Indicator Result 35,000 93%
92%
30,000
Investment amount, US$ ths 125,717 91%
25,000 90%
89%
US$ thousands

89% 90%
NPV, US$ ths 13,140 89%
20,000 89%
87%
IRR 16% 15,000 88%
87%
EBITDA margin 10,000
85-93% 86%
29,795

29,402

27,958

27,049

23,985

17,766

5,000
85%
Payback period, years 8.2
0 84%
Discounted payback period, 2024 2025 2026 2027 2028 2035
11.4
years
Revenue, US$ thousands EBITDA margin, %

Quality indicators

Project participants Clinic structure

Private partner income • Day-stay center;
• Private partner
• Compensation of investment and • Diagnostic department;
• State partner (Kazakhstan
Ministry of Health) operating costs; • Family Health Center.
• Management fee; Hospital structure
• The operator of medical services
• Additional income • Medical rehabilitation;
• (S D Asfendiyarov Kazakh
(pharmacy, waste utilization, • Surgical departments;
National Medical University)
canteen) • Therapeutic departments.

KAZAKH INVEST:
January 2018 Investment proposal 1
 Public-private partnership
Public health

Construction and operation

of a university hospital
in Shymkent city

Project description: Market background:

This Project involves the construction and operation Morbidity growth. South Kazakhstan region
of a multi-profile university hospital under the reports an annual increase in the morbidity levels
Kazakh Innovation University in Shymkent city. The and a high number of hospital admissions. In the
hospital will consist of a 1,000-bed inpatient facility period from 2013 to 2017, the morbidity rate
and an outpatient diagnostic and treatment center increased from 40.7 thousand to 49.7 thousand
with a capacity of 700 visits per shift. cases per 100 thousand people.
Location: Reduction in hospital bed supply. During the
Shymkent city, Bozaryk microdistrict period from 2013 to 2017, the hospital bed capacity
in South Kazakhstan Oblast decreased from
Capacity: 1,000 hospital beds and 700 visits of 14.4 thousand to 12.7 thousand beds, while the
outpatient facility per shift population grew from 2.62 million to 2.89 million
Partnership terms: people.
Project implementation under a public-private Hospital bed shortage. Based on the health
partnership scheme. (“PPP”) indicators of SKO residents, demand for inpatient
treatment in the region is estimated at 23,075
hospital beds, indicating a deficit of 10,316 beds.

Key investment variables Qualitative indicators

Index Value
Project implementation period, years 16
including investment period, years 4
operation period, years 12
Private partner
Investment amount, US$ thousands 252,777 Project shareholders incomes
Project NPV, US$ thousands 70,371 • Private partner • Compensation of
IRR, % 21 • State partner investment and
(Ministry of Health) operating costs
EBITDA return, % 91-94%
• Operator • Dividends
Payback period, years 7.1
(Kazakh Innovation • Other activity: lease
Discounted payback period, years 8.8 University) of premises, disposal
of medical wastes

Project revenue
90,000 95%

94%
80,000
94%
70,000
93%
93%
60,000
US$ thousands

92% Inpatient facility structure

50,000
91% • Surgical center
%

40,000 91% • Therapeutic center

91% 91%
• Maternity and childhood center (consisting of
30,000 obstetric-gynecological unit and pediatric unit)
90% Outpatient facility structure
20,000
• Day patient facility
74,362

62,882
79,236

56,828

46,670

89% • Diagnostic unit

10,000
• Center for family health
- 88%
2024 2027 2030 2033 2035

Revenue, US$ thousands EBITDA margin, %

KAZAKH INVEST:
August 2018 1
Investment Proposal
 Expansion of services in the premier
regional clinic of Mangystau

Project description
The project plan is for an increase in capacity of the successful multidisciplinary private clinic from
current 25 k to 35-40 k patients p.a. through addition of new clinical units (cardiology, cardiosurgery,
rehabilitation, interventional service and maternity obstetric service). The clinic has already established
status of a premier medical institution due to the implementation of advanced hygiene technologies and
retain of highly qualified staff. The owner is a renowned business person of Mangystau region.

Project location Investment highlights

RUSSIA
NORTH
KAZAKHSTAN
KOSTANAY AKMOLA PAVLODAR
Upfront investment $45 MM
WEST
KAZAKHSTAN EAST
KAZAKHSTAN
ATYRAU AKTOBE
KAZAKHSTAN
NPV $32 MM
ALMATY
KYZYLORDA JAMBYL
MANGYSTAU SOUTH IRR 21 %
KAZAKHSTAN
CHINA
Payback period 7 years

Market analysis Competitive advantage

There is an unsatisfied demand for the services that Efficiency. 30% faster service than in other
clinic will provide in cardiac and obstetric services. clinics in region due to technological advances and
Number of patients with cardiac Fertility rate in Aktau, management systems.
diseases in Aktau, 2017 year 2017 year (people) Variety. One stop shopping with services
(people) unique for the region: hepatobiliary surgery,
Served 500 Served 3000
Unserved 1100 Unserved 2600
oncosurgery, arthroplasty, vertebrology, spinal
1600 5600 disc herniation operations and others.
Total Total
Market share growth since opening(%)
These two factors 19%
Potential market Potential market
for SofieMedGroup for SofieMedGroup influenced a 16%
confident market 12%
Growing expat population in West Kazakhstan due to share growth since its
large oil&gas and logistics projects. SofieMedGroup establishment 4 years
0%
serves 500 people, that is 24% of expats in ago. 2015 2016 2017 2018
Mangystau, other expats are a potential market for
the clinic
Value proposition
Number of expats in West Kazakhstan in 2017 yea (people)
This project allows an investor to take advantage of unmet
Sofie Med Group 500 demand for high-quality medical services and build
upon existing know-how of an already large medical
Expats in West 11600 business.
Kazakhstan

Target Investor Mandate Important notice

An investor should have: Candidates interested in considering this investment opportunity
must confirm this directly with Kazakh Invest.
▪ Long cheap financial resources Contact FirstName LastName, Project Manager
▪ Be a supplier of technology in cardio-, pediatry +7 7172 917070 lastname@kazakhinvest.kz
and ophthalmology The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
1
 Expansion
Expansionof
ofproduct
productline
lineof
of a major pharma
acompany
major pharma company

Project description
The project plan is to expand a product line to satisfy demand for generic medicines. The company plans to
address diabetes, cardiovascular diseases, oncotic and nervous system disorders and produce 136 mln pills
p.a. with a cash flow of 29 mln USD p.a. Company has completed construction of the office, production
facility, maintenance and distribution hub along major highway in South Kazakhstan on 5,8 thd m2 size
territory. Company has agreements with the suppliers of technology to produce equipment tailored for
company needs.
Project location Investment highlights
RUSSIA
NORTH Upfront investment $36 MM
KAZAKHSTAN
KOSTANAY AKMOLA PAVLODAR
WEST
KAZAKHSTAN EAST NPV $64 MM
ATYRAU
KAZAKHSTAN KAZAKHSTAN
AKTOBE

KYZYLORDA
ALMATY IRR 33%
JAMBYL
SOUTH
KAZAKHSTAN
SOUTH CHINA Payback period 4 years
KAZAKHSTAN

TAJIKISTAN

Market analysis Competitive advantage

Company targets unmet demand and aligns production The average cost of pharmaceuticals will be 15% less
with the largest buyer of drugs, state company “SK- than market average due to advanced manufacturing
Phamacy” LLP, which covers more than 70% of national technologies
demand in Kazakhstan Average price of drugs produced by company in comparison
Medicaments of company in comparison with current market with average market prices in Kazakhstan, USD
production volumes, mln USD 6,7
95,6
Cardiovascular 8,2 Cardiovascular
5,6
Oncotic 107
22
1700
Oncotic
Total production in Expected production by
Kazakhstan company 1435
Potential market for pharmaceuticals produced in
company is EAEU countries (Russia, Kazakhstan, Average cost in Kazakhstan Average cost of firm
Belarus, Kyrgyzstan, Armenia). There is a growing
trend of the medicine trade among these markets after
recent changes in regulations in 2015 Value proposition
Pharmaceuticals trade in EAEU, mln USD This project allows to take advantage of import substitution
5,7 of growing market that has support from government of
1,3 Kazakhstan. Export potential to neighboring markets has
fresh opportunities with recent changes in EAEU regulations on
trade.
2016 2017
Target Investor Mandate Important notice
An investor should: Candidates interested in considering this investment opportunity
• Be a supplier of technologies must confirm this directly with Kazakh Invest.
Contact FirstName LastName, Project Manager
• Have access to external markets +7 7172 917070 lastname@kazakhinvest.kz
The content of this document is property of Kazakh Invest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.
Sources: Statistics Committee of the Ministry for national economy of the RK, trademap.com, UN Department of Economic
and Social Affairs
Other promising sectors
 Construction of a hydroelectric power plant

Project description
The project plan is to build a hydroelectric power plant on the Koksu river in the Almaty oblast. The design
capacity is 42 MW. The area of the plant on the Koksu riverfront amounts to 100 hectares that meets the
requirements for the sufficient power generation. The government has already approved the blueprints for
the construction of the power plant. The initiator of the project has a Power Purchasing Agreement with
Financial settlement centre of renewable energy for 15 years.

Project location Investment highlights

RUSSIA
Upfront investment $50 MM

NPV $2 MM
KAZAKHSTAN

IRR 13%
ALMATY
CHINA
Payback period 10 years

Market analysis Competitive advantage

I. There is a 15-year offtake contract for 100% of Currently 35% of electricity consumed in the
energy generation. oblast is purchased outside of the oblast.
II. The law On support of the usage of RES set Oblast’s economy is forecasted to grow at a CAGR
fixed tariffs for renewable energy adjusted yearly of 6% till 2022 which will drive the demand for
for inflation and foreign currency exchange rate. energy.
The tariff is 70% indexed by CPI and 30% by
exchange rate. 1,1
RES energy tariff change from 2015 to 2017
2
Tariff
3,1 (tenge/kWh)

The initiator is also negotiating with Chinese CPI

offtakers.
Prices of electrical energy by exporting
China`s imports of
country (USD/MWh)
electrical energy
(mln MWh)

Value proposition
This project allows to take advantage of electrical
energy supply shortage in Almaty region.

Target Investor Mandate Important notice

An investor should: Candidates interested in considering this investment opportunity
must confirm this directly with KazakhInvest.
• Be a supplier of technologies Contact Marat Birimzhan, Deputy Chairman
• Have an access to external markets m.birimzhan@invest.gov.kz
The content of this document is property of KazakhInvest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document
Sources: Statistics Committee of the Ministry for national economy of the RK, UN Comtrade, Official internet-resource of
Almaty city
 Energy sector

Expansion of gas turbine power station

GTES-200 Uralsk

Project description: Market prerequisites:

Expansion of the existing gas turbine power station
(GTES-200 Uralsk) by modifying it into a combined-
cycle system (operated through gas and steam).
Power capacity: 300 MW
Location: Kazakhstan, West-Kazakhstan Oblast,
Zelenovsky District, Beles village
Project initiator: Batys Power LLP
Existing debt obligations of the Initiator:
about US$ 100 million (the possibility of refinancing
a foreign currency loan into KZT (tenge)
denominated loan is being considered)
Key investment indicators
Indicator
Project implementation period, years
incl. investment stage, years
operating stage, years
Investment amount, US$ thous.
Project NPV, US$ thous.
IRR, %
EBITDA margin, %
Payback period, years
Discounted payback period, years
High electricity prices in the region
The Western energy zone is isolated from the
country's energy system and does not have an
access to cheap electricity from the Northern Energy
Zone. Electricity prices for industrial enterprises
(main consumers) in Atyrau Oblast are the highest
in the country, while in West Kazakhstan Oblast -
they rank among the highest across the country.
Increase in energy consumption Almost the
entire oil and gas industry is concentrated in Atyrau
Oblast and West Kazakhstan Oblast. These regions
house enterprises that are carrying out or have
already completed major modernization projects
(e.g. enterprises such as Atyrau Refinery,
Karachaganak Petroleum Operating, Tengiz, CPC),
which leads to an increase in electricity
consumption.
Proximity to raw material resources GTES-200
Uralsk has an underwater pipeline connected to the
major pipeline "Soyuz", which ensures provision of
Results an uninterrupted supply of natural gas. In addition,
West-Kazakhstan Oblast is one of the leading
24 oblasts in the Republic of Kazakhstan in terms of
gas reserves and gas production. This ensures
6
stability and diversification potential for supplying
18 gas for the operation of the power plant.
340,000 Establishing electricity exports The creation of a
unified electricity market within the framework of
217,018 the Eurasian Economic Union will enable the Project
to set up exports of electricity to Russia and Belarus,
17.5%
where electricity prices will be set by market
47-60% conditions. GTES-200 Uralsk is connected to the
power system of Russia through the Stepnaya
11.4 electrical substation and has sufficient transmission
15.5
capacities for large-scale export deliveries.

Project scheme Project profitability

250,000 70%
Existing power station (100 MW) 59% 59% 59%
• GE MS 9001E gas turbine 60%
200,000
Expansion (300 MW) 47%
44% 50%
US$ thousands

• 2 GE MS 9001E gas turbines 150,000

40%
• Expansion of an operational cycle of gas turbines
%
68,914

by modifying it into a combined-cycle system, 30%

100,000
through addition of:
20%
- Waste heat recovery units
157,542

167,837

201,543
114,803

50,000
- К-60-7,4 type steam turbine 10%

All of the infrastructure required for the - 0%

expansion of the power plant has already been 2021 2024 2025 2035 2040
built
Revenue, US$ thousands EBITDA margin, %

KAZAKH INVEST:
August 2018 1
Investment proposal
 Construction of the “Tengri Village” resort area

Project description
Creating a multi-purpose international diversified business resort, offering a unique environment for
recreation, conferences and various events, commercial activities, outlet as well as for a permanent or
secondary residence - Kazakhstani analogue of Davos in Switzerland.

Project location Investment highlights

RUSSIA
Upfront investment $ 48MM

NPV $ 18MM
KAZAKHSTAN

IRR 15 %
ALMATY
CHINA
Payback period 9 years

Market analysis Competitive advantage

Tourism in Kazakhstan is expected to grow further • location in Talgar region in close proximity to Almaty
through influx of investments into the field and city and a number of other attractions and amenities
governmental support in the form of increasing number • multifunctional resort with a price per room that is
of available flight routes and weakening entry barriers. lower than the average price on the market
Total tourist arrivals in Kazakhstan (thousand people) Prices for Tengri Village and average market price for 4-star
15 100 resorts in Almaty and locations nearby in 2018, KZT
13 362
11 802
10 403
9 122
6 829
5 171 5 168 5 723
Tengri Village 28 000

2014 2015 2016 2017 2018 2019 2020 2021 2022 4* resorts 30 347
(п) (п) (п) (п) (п)
Almaty city and Almaty region will traditionally remain one
of the center-points with such advantages as developed
infrastructure and number of beautiful natural attractions.

9.4%
14.9%
Almaty Southern region Value proposition
6.0% Almaty region Eastern region This project proposes to take advantage of a
17.7%
13.3% Astana Other growing tourism demand in one of the regional
Akmola region tourist hotspots
14.5%

Target Investor Mandate Important notice

Candidates interested in considering this investment opportunity
An investor should: must confirm this directly with KazakhInvest.
-have long cheap financial resources Contact Marat Birimzhan, Deputy Chairman
-be an expert in hospitality management m.birimzhan@invest.gov.kz
The content of this document is property of KazakhInvest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Sources: Statistics Committee of the Ministry for national economy of the RK

 Tourism

Development of a resort complex on

Bolshoe Chebachye and Tekekol lakes

Project description: Market prerequisites:

Development of a multifunctional resort complex Growing demand for tourism services The
("Complex") in Burabay resort area, on the shores average annual growth in the number of domestic
of Bolshoye Chebachye and Tekekol lakes, with a tourists in Kazakhstan in 2013-2017 amounted to
year-round operational schedule. 10%, while the number of outbound tourists was
almost left unchanged over the last five years.
Location: Average annual growth in the number of inbound
Akmola region, Burabay resort area, the shores of tourists in 2016-2017 amounted to 18%. In 2017,
Bolshoye Chebachye and Tekekol lakes the number of inbound tourists (mainly from the CIS
Project initiator: countries) amounted to 7.7 million people.
Burabay Damu LLP: subordinate organization of the Increase in attendance of Burabay resort area
Office of the President's Affairs ("OPA"). Burabay resort area is one of the most popular
Governmental support: resorts in Kazakhstan. In 2017, 150,000 people
have stayed at its guest stay facilities. While an
OPA provides a land plot and the government
estimated total attendance of the resort area came
finances construction of engineering infrastructure at around 600,000 people over the same period.
According to expert forecasts, the average annual
growth of the total resort attendance untill the 2030
will be equal to 4.1%.
Low market competition level To date, in
Burabay resort area there are no tourist facilities
providing a similar array of accomodation and
leisure services, and with similar quality standards.
The only complex with a similar scale and versatility
of the provided services is the "8 lakes" Park resort
complex, located near Almaty.
Key investment indicators Capacity projections for the Complex by
2040:
Indicator Results
Project implementation period, years 24
incl. investment stage, years 13 Capacity of the guest stay facilities: accommodating
operating stage, years 11 380 thousand tourists per year;
Investment amount, US$ thous. 190,151 Residential area population: 2000 people;
Project NPV, US$ thous. 53,898 One-off visits to the leisure and entertainment
IRR, % 17.4% facilities of the Complex: 3.3 million per year.
EBITDA margin, % 42%
Payback period, years 10.6
Discounted payback period, years 17.9

Key facilities of the Complex:

Land plot area Leisure and entertainment facilities
233 hectares • Aqua-park and Marina Club;
Guest stay facilities • The ski arena;
• Family hotel; • Center for learning and entertainment;
• Hotel for adults; • Health recreational center;
• Hotel for sports events and meetings; • City center with commercial areas;
• Guest cottage houses and villas. • Sports complex.
Total capacity of the guest stay facilities: 800 rooms Residential area
(1900 beds). • 340 cottage houses;
Hotel categories: 3-4. • 84 villas.
Construction of all of the facilities of the Complex is
divided into 3 phases, with the planned completion of all
construction works in 2030.

KAZAKH INVEST:
October 2018 1
Investment proposal
 Construction of the “Akkol resort” recreation area

Project description
The project plan is to construct a resort close to the capital of Kazakhstan - Astana. The key driver is a
growing population of the most wealthy region of the country and a lack of large resorts near Astana, where
in 2017 the population amounted to 973 thd people. The resort has a logistics advantage in a growing
segment of the market. It is expected that the company will provide 126 rooms, 15 guest houses, 3
conference rooms and offer SPA, sports and restaurant services for guests.

Project location Investment highlights

RUSSIA
Upfront investment $ 36 MM
ASTANA

NPV $ 25 MM
KAZAKHSTAN

IRR 21 %
CHINA
Payback period 7 years

Market analysis Competitive advantage

Expected urbanization in Astana drives demand for
recreational spaces. Expansion of market will boost
necessity for range of variety and number of
services available for recreational purposes
Population growth forecasts in Astana (mln people)
1,5
0,9 1,2
Distance to the area is twice shorter from Astana
than to other large recreational centres in the region
(Borovoe and Zerendy). This factor can attract
citizens of Astana and frequency of tourists is
expected to be higher than of competitors
Distance of largest resort areas from Astana (km)

Zerendy 319
2017 2020 2030

Number of visitors to touristic areas in the region is Borovoe 257

increasing. There is also a steady growth of foreign tourists
in Kazakhstan, who are also expected to be resort visitors
Akkol resort 115
Number of residents in selected Number of foreign tourists
touristic area (thd people) in Kazakhstan (mln people)
1112 3,6
1039 3 Value proposition
927 This project proposes to take advantage of the
growing tourism demand in the most developed
region of country
2015 2016 2017 2016 2017

Target Investor Mandate Important notice

An investor should: Candidates interested in considering this investment opportunity
must confirm this directly with KazakhInvest.
- have long cheap financial resources Contact Marat Birimzhan, Deputy Chairman
m.birimzhan@invest.gov.kz
The content of this document is property of KazakhInvest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Sources: Statistics Committee of the Ministry for national economy of the RK

 Construction of resort town "Kokterek"

Project description
The project plan is to build a new resort town "Kokterek" (in the village "Saryagash") in order to develop
health tourism by providing services with mineral and thermal waters. The project includes a hotel, a
sanatorium, indoor and outdoor swimming pools (thermal water) and spa. The advantage of this project is
its proximity to Uzbekistan, source of current tourists in Kazakhstan. Also, the availability of natural
mineral water Saryagash.

Project location Investment highlights

Upfront investment $154MM

NPV $ 27MM
KAZAKHSTAN

IRR 13%

Payback period 11 years

UZBEKISTAN SOUTH
KAZAHSTAN

Market analysis Competitive advantage

Expected population growth creates demand for I. Share of visitors to resort organizations: the
increase in domestic tourism. largest region in Kazakhstan by the volume of
Forecast of population growth in short-term шт visitors in resort organizations is SKO, - 30% of the
Ыouth-Kazakhstan regions (mln people) market, most of which, ~55% is in the region of
19.6 20.3 20.9 21.6 22.3 22.9 Saryagash.
18.3
3.0 3.4 3.7 4.0 4.4 4.7 5.0 South II. Advantageous geographical location: the resort
Kazakhstan

15.3 16.2 16.6 16.9 17.2 17.6 17.9 Other regions area is near historical places of KZ and in 15 km.
from Uzbekistan, which will additionally provide
2018 2025 2030 2035 2040 2045 2050 growth of foreign tourists.
Growth of visitors in the resort sanatorium of the III. Favorable natural conditions: the project is
South Kazakhstan Region from 2015-2017. located near the unique sources of mineral waters of
increased by 50%. Saryagash, where tourists have been coming from
Number of users served in Share of South Kazakhstan around the world for about 6 years.
sanatoriums Saryagash region, region served n the sanatorium,
thousand peщзду. thousand people

46.7 53.9 288

35.8
5.2 7.4 30% Value proposition
2.0
46.5
33.8 41.5 70% The project provides opportunity to use unique
location in Kazakhstan and develop both internal
2015 2016 2017 2017 and external tourism.
Other places sanatoriums South Kazakhstan Region

Target Investor Mandate Other regions

Important notice
An investor should have: Candidates interested in considering this investment opportunity
must confirm this directly with KazakhInvest.
Contact Marat Birimzhan, Deputy Chairman
•Long cheap financial resources m.birimzhan@invest.gov.kz
•Transfer of advanced technologies The content of this document is property of KazakhInvest and is
only intended for information purposes.
No assurance or guarantees is presented with regard to accuracy
and completeness of the information contained in this document.

Sources: Statistics Committee of the Ministry for national economy of the RK

 Unique investment opportunity in ski resort and
recreation complex in Almaty, Kazakhstan (1/3)

Investment project Oi-Qaragai Lesnaya Skazka

Project overview

• Brief description. Multifunctional recreational complex with total area of 57 ha is

located outside of Almaty (35 km) and surrounded by National Park. The area is
already attractive to tourists and visitors, due to the existing project Lesnaya Skazka
(owned by the same shareholder) and successful launch of the Project’s first stage
Aport ski resort in February 2018, which would complement the future development.
• Attractive Project’s location. The proximity to the city provides an access to 3.8
million of population. The base station of the recreational complex is located at the
elevation of 1,500m. Due to favorable climate, geographical position and snow making
systems, skiers can expect of up to 5 months skiing period at the Project site.
• All-year round activities. The Project offers a wide range of activities, including
various types of skiing trails with over 30 km of slopes, bike trails, trolley and
adventure parks, horse riding and sport activities.
• Commercial property. The Project includes 350 houses and 100 apartments for
sale and rent. Total commercial area comprises c. 60 thousand sqm.
• Nearby existing infrastructure. The Project has most of the required utilities
(electricity and gas systems) and transport accessibility (asphalt road) due to its close
proximity to the existing resort.
• Potential Government subsidy. The Project is potentially qualified to be a priority
project in the development of Kazakhstan, under which the initiators may get subsidy
in terms of tax reliefs and preferential long-term financing on attractive terms.

Project team
The owners along with international companies are actively engaged in preparation and development of the
Project. At this stage, the team has successfully completed the master plan of Aport ski resort and in progress
of planning Ak Tas ski resort.

Master Plan Engineering Financial Modelling EPC - contractor

Austrian
Kazakhstani Global consulting Kazakhstani
company
company TanGif organisation PwC company
MasterConcept

Investment opportunity
The shareholder will consider flexible deal structuring of debt and equity financing (minority share only), with an
option of including the existing business.

Investment highlights

Unique integration of the Favorable climate allowing Potential support from the Active development of the
Project and the existing guests to enjoy 5 months of Government Project
business - hotel-resort ski season
 Unique investment opportunity in ski resort and
recreation complex in Almaty, Kazakhstan (2/3)

Ak Tas elevation
Investment project Oi-Qaragai Lesnaya Skazka
point 2,200m

Project Aport Elevation

point 1,800m
Ak Tas resort

Existing business

Lesnaya Skazka
x250

2
Ak Tas Mountain
Center 2
x350

Family and Kids Area

Commercial village Aport
Lake Valley Aport x280
x330

Almaty (35 km)

10 seat Cable Car to Ak Tas 6 seat chair lifts Parking spaces New lifts Existing lifts

*Preliminary map for illustrative purposes only

Timeline and Capex requirements of the Project

The initiators of the Project have been actively engaged in development of the first stage of the Project. In
February 2018, the first stage was launched with a completed 2,200m slope and 1,410m lifts (bugel and T-bar
lifts) with a total invested capital expenditure of USD 12 mln. In July 2018, the opening of 10 km bike trails took
place. Trails of various levels of difficulty are equipped on the ski slopes, especially for the summer season.
Total planned Capex of the project is estimated at ca. USD 146 mln and planned to be completed within 7 years.

Completed Stage 1 Stage 2 Stage 3 Stage 4

As of 1st half of 2018 2nd half of 2018 2019 2020 2020-2024
USD 12 mln USD 9.8 mln USD 25.6 mln USD 23.4 mln USD 87.7 mln

Already constructed:
 4x Bugel Lifts - 650 m
 T-bar lift – 360 m
 2-seat chairlift – 400 m
 Slopes – 2,200 m
 Restaurants
 Bike trails
 Kids center
New construction:
• 3-seat chair lift – 600 m
• 4-seat chair lift – 851 m
• 4x Bugel Lifts
• 12x Slopes – 5,740 m
• Snow making – 10 ha
• Lakes - 3,200 cbm
• Restaurants – 430 guests
capacity
New construction:
• 8-seat Cable Car – 1,700 m
• 6-seat chair lift – 760 m
• 2x Slopes – 6,357 m
• Horse farm
• Snow making – 17 ha
• Lakes – 26,5 ths cbm
• Restaurants – 1,250 sqm
• Parking – 12,5 ths sqm
New construction:
• 6-seat chairlift – 1,080 m
• 4-seat chairlift – 746 m
• 5x Slopes – 5,482 m
• Snow making stage 2 – 12 ha
• Lakes – 70 ths cbm
• 50 Houses and 18 apartments
for sale - total of 8,760 sqm
New construction:
• 4x 4-seat chairlift -4,209 m
• 3x Slopes – 5,914 m
• Snow making – 110 ha
• 300 houses and 82
apartments for sale - total
of 50,740 sqm

350 houses and 100

5.5 times increase 30 km slopes and lifts
apartments
in skier capacity: with total capacity of
with total area of 60 ths
Current: 1,000 skiers/day 20,000 p/hour are
sqm are planned to be
Phase 4: 5,500 skiers/ day planned by 2024
build for sale and rent
 Unique investment opportunity in ski resort and
recreation complex in Almaty, Kazakhstan (3/3)

Investment project Oi-Qaragai Lesnaya Skazka

Project’s attractive economy

The Project and the current business together will provide The Project comprises high quality real estate
revenue of USD 56 mln with EBITDA margin of 35% by objects, meeting the latest ecological trends and
2028 when it reaches projected capacity that will ensure trends of the developed ski resorts abroad.
high rate of IRR.

Revenue and EBITDA margin of the Project, USD mln

350 houses and
60 80% 100 apartments
50 14
with total capex of
13 13 60% USD 59,5 mln
40 12 12
10
9
30 9 40%
20 40 40 43 47,6 ths sqm –
8 35 35
25
30 32 20% total area for sale
10 7
3 14
- 1 6 0%
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Sale price – up to
USD 3 ths/sqm
Investment project Current business EBITDA margin

Overview of existing business – Lesnaya Skazka

Active rest and leisure:
Lesnaya Skazka is a high class recreational
complex located in Almaty. It is a place for private,  Ski Trail
 Trolley Park
family and corporate leisure at any season of the year.
 Adventure Park
Starting its operations in 2011, the resort welcomed  Rock Climbing Wall
more than 60,000 visitors in 2017. Growing operating  Horse Riding Centre
activity of the complex ensures a customer flow for the
Project.

Lesnaya Skazka’s revenue, USD mln

5 Major components of
4 3,5 the revenue:
3,3
3,1 Accommodation – 45% Comfortable accommodation: Various cuisine restaurants
3 Food and Beverage – 33% with 460 seat capacity:
 18 standard twin rooms
2 Recreation - 15%
 6 Yurts  National Kazakh cuisine
Other (incl. SPA and Horse
1  7 Cottages with 35 rooms  Georgian cuisine
Center) - 7%
-  4 VIP Chattels  Delicious homemade food
2 015 2 016 2 017  Treehouses with 35 rooms

Contacts

Konstantin Yeliseyev Yevgeniy Kogan

Partner, Eurasia Deals Leader Manager, Corporate Finance
+7 701 745 2005 +7 702 888 0780
konstantin.yeliseyev@pwc.com yevgeniy.kogan@pwc.com

DISCLAIMER
The information used in preparing this profile was obtained from sources to which we have been authorized access. PricewaterhouseCoopers
(“PwC”) has made no independent verification of the information. Accordingly no representation or warranty of any kind (whether express or
implied) is given by PwC, its partners or employees as to the accuracy, completeness or fitness for any purpose of this document. This document
remains confidential and should not be copied or disseminated without the prior authorisation of PwC.
 Tourism
Development of a multifunctional
amusement park in Almaty Oblast

Project Description: Market prerequisites:

Development of a multifunctional amusement park
«HAPPYLAND PARK» in Almaty Oblast («Project»).
Project goal: To provide citizens of Kazakhstan and
Central Asia the opportunity to visit a world-class
amusement park.
Location: 23 km from Almaty city
Project initiator: «HAPPYLON» group of
companies, which belong to an international
network of indoor theme parks and restaurants,
providing services for family holidays.
Governmental support: The project corresponds
to the objectives of the national concept of
development of the tourist industry until 2023,
which includes the creation of a cultural and tourist
cluster “Almaty –free cultural zone of Kazakhstan”
Area of the Park: 193 ha
Key investment indicators
Indicator Result
Construction period, years 6 59%
US$ thousands
Growing demand for tourism services– Average
annual growth in the number of domestic tourists in
Kazakhstan in 2013-2017 was 10%. The average
annual growth in the number of incoming tourists in
2016-2017 was 18% (2017 – 7,7 million people).
The number of visits to parks and recreation areas in
Kazakhstan was more than 27 million in 2017.
Geographical location – The park will be located,
20km from the largest megacity of Kazakhstan with
a population of 1.8 million people alongside the new
highway Almaty – Kapshagai. The target audience of
the project covers 162 million people – Kazakhstan,
Central Asia, border regions of Russia, China and the
Caucasus.
Competence of the initiator– HAPPYLON is the
leading player in the «Indoor amusement parks»
segment on Kazakhstan market, with a share of
more than 70%. The company has 12 years of
experience in creating and managing projects in the
entertainment industry. The number of visitors in
2017 was more than 1 million people.
Project Profitability
100,000 62% 62% 64%
61% 62%
80,000 60%

Investment, US$ thousands 127,131 58%

60,000
56%
Project NPV, US$ thousands 138,975 53% 54%
40,000
52%
13,838

41,602

71,554

86,450

90,619
IRR, % 20.9%
20,000 50%
EBITDA returns, % 60% 48%
0 46%
Payback period, years 7.8 Year 3 Year 5 Year 7 Year 10 Year 13

Discounted payback period, years 9.6 Revenue EBITDA margin, %

Key Project Facilities

Amusement Park, 45 ha: Indoor entertainment center, 5 ha:

• Children’s zone – 20 attractions; • Ethnographic park;
• Family zone – 20 attractions; • Happy City (Professions Park) and Science
• Extreme zone – 10 attractions. Park;
• Starting platforms for large attractions and
karting.
Waterpark, 5 ha:
• Open air – 3 ha, 26 attractions
SPA & Resort Hotel, 15 ha:
• Indoor – 1 ha, 16 attractions.
• Hotel – 200 rooms;
Additional segments: • Cottage house town – 150 rooms;
• Nature park, 20 ha; • Bungalow complex – 100 rooms;
• Golf club, 78 ha. • Spa complex– 0,5 ha.

KAZAKH INVEST:
August 2018 1
Investment amount
 Tourism
Development of a multifunctional
amusement park in Shymkent

Project Description: Market prerequisites:

Development of a multifunctional amusement park
«HAPPYLAND PARK» in Shymkent («Project»).
Project goal: To provide citizens of Kazakhstan and
Central Asia the opportunity to visit a world-class
amusement park.
Location: 20 km from Shymkent city
Project initiator: «HAPPYLON» group of
companies, which belong to an international
network of indoor theme parks and restaurants,
providing services for family holidays.
Governmental support: The project corresponds
to the objectives of the national concept of
development of the tourist industry until 2023
Area of the Park: 152 ha
Growing demand for tourism services– Average
annual growth in the number of domestic tourists in
Kazakhstan in 2013-2017 was 10%. The average
annual growth in the number of incoming tourists in
2016-2017 was 18% (2017 – 7,7 million people).
The number of visits to parks and recreation areas in
Kazakhstan was more than 27 million in 2017.
Geographical location – The park will be located,
20km from the agglomeration of Kazakhstan with a
population of 1.4 million people The target audience
of the project covers 162 million people –
Kazakhstan, Central Asia, border regions of Russia,
China and the Caucasus.
Competence of the initiator– HAPPYLON is the
leading player in the «Indoor amusement parks»
segment on Kazakhstan market, with a share of
more than 70%. The company has 12 years of
experience in creating and managing projects in the
entertainment industry. The number of visitors for
2017 was more than 1 million people.

Key investment indicators Project Profitability

61% 61%
Indicator Result 80,000 62%
70,000 59% 60%
Construction period, years 4
57%
60,000 58%
US$ thousands

Investment, US$ thousands 55,413

50,000 56%
Project NPV, US$ thousands 114,181
40,000 54%
IRR, % 25.9% 30,000 51% 52%
20,000 50%
30,692

42,828

55,518

67,268

EBITDA returns, % 58%

15,745

10,000 48%
Payback period, years 6.5
0 46%
Discounted payback period, years 8.0 Year 3 Year 5 Year 7 Year 10 Year 13
Revenue EBITDA margin, %
Key Project Facilities

Amusement Park, 45 ha:

Indoor entertainment center, 2 ha:
• Children’s zone
• Starting platforms for large attractions and
• Family zone karting.
• Extreme zone. • Large food-court – 0.12 ha
• Recreational areas
Waterpark, 5 ha:
• Open air
SPA & Resort Hotel, 15 ha:
• Hotel & SPA – 200 rooms
Additional segments:
• Cottage house town – 200 rooms
• Nature park, 20 ha;
• Bungalow complex – 160 rooms.
• Golf club, 78 ha.
KAZAKH INVEST:
August 2018 2
Investment amount
Logistics
Transport and
logistics center (TLC)

Project overview: Market prerequisites:

Construction of a modern class A transport and • Demand growth on the domestic market –
logistics center (TLC), which will be a part of a Freight turnover volumes have grown from
single and integrated TLC network, providing a 95 million tons to 118 million tons during the
full range of commercial services for transport period of 2012-2016.
and logistics. • Growth in transit volumes – According to
Investment amount: US$ 76,406 thousand Strategy Partnership experts, transit
Capacity: total area of 59,167 sq. meters and volumes through Kazakhstan's territory are
984 thousand tons of turnover per year expected to reach 36 million tons by 2020.
Location: the city of Aktobe, adjacent territory • Enhancing competitiveness – Implemen-
to the airport of Aktobe tation of the "Silk Road" project and an
increase in the average annual volume of
Project implementation period: transportations between Europe and Asia
24 years, including construction period (which, according to forecasts, should reach
Target markets: Aktobe and nearby oblasts 800 million tons by 2020) increases the flow
Types of products for storing: climatic of cargo through the territory of Kazakhstan.
warehouse: food, vegetables, fruits; dry storage • Growth in trade volumes – Growth in
warehouse: consumer goods, food products, wholesale and retail trade volumes during
household chemicals, household appliances the period of 2013-2016 amounted to 8%
and 3% respectively.

Key investment indicators Project profitability

20,000 90%
Indicator Result 79% 79%
76% 78%
18,000 74% 80%
Investment amount, US$ 16,000
76,406 70%
thousands 14,000
60%
Project NPV, US$ thousands 10,130 12,000
US$ thousands

50%
10,000
IRR 11.5% 8,000
40%

30%
6,000
3,238

EBITDA margin 74-80% 20%

4,000
13,186

17,330
7,901

9,341

10%
Payback period, years 11.4 2,000

0 0%
Year 4 Year 5 Year 6 Year 14 Year 24
Discounted payback period, years 24
Revenue, US$ thousands EBITDA margin, %

Project location: Aktobe Oblast, TLC location advantages

the city of Aktobe
The geographic location of the oblast has
following advantages: 1) bordering with 6
Kazakhstan oblasts (West Kazakhstan
Kostanay
oblast
Oblast, Atyrau Oblast, Mangystau Oblast,
West Kaz. Kyzylorda Oblast, Karaganda Oblast,
Oblast
Kostanay Oblast), as well as with Russia and
Atyrau Aktobe oblast
Uzbekistan; 2) proximity to key
oblast Karaganda oblast transportation channels ("Western Europe -
Western China" highway, Zhezkazgan-
Beineu railway). Thus, the transport and
Mangystau
Kyzylorda
oblast
logistics center in Aktobe city has potential
oblast
to become the main logistics center for
servicing transit and interregional
transportations.

KAZAKH INVEST:
January 2018 63
Investment proposal
 Transportation and logistics
Construction of transportation and
logistics center in Ust-Kamenogorsk

Project description: Market assumptions:

Construction of a modern transportation and Favorable location East Kazakhstan Oblast borders
logistics center (TLC) in the East Kazakhstan Oblast, with China and Russia, which will give UTLC more
in the city of Ust-Kamenogors, which provides a full prospects to develop as the local transportation and
range of commercial services for transportation and logistics hub connecting Western China and the
logistics (Ust-Kamenogorsk TLC, UTLC) Eastern regions of Russia. UTLC has a great chance
Cargo turnover capacity: 1.5 million tonnes of of becoming a transportation and logistics gateway
cargo turnover per year to Siberia.
Project location: East Kazakhstan Oblast, Ust- Increase in foreign trade in East Kazakhstan
Kamenogorsk, along the road connecting Ust- Oblast Over the period of 2015-2017, foreign trade
Kamenogorsk and Almaty turnover of East Kazakhstan Oblast has seen an
Services provided: average annual increase of 6%. Notably, China and
• customs and brokerage services, as well as other Russia were the main trade partners. This suggests
services for registration of all cargo categories the existence of reliable demand for warehousing,
transportation and customs services.
• cargo handling at terminals
Growth in wholesale and retail trading volumes
• provision of railway docks, open storage areas, Annual growth in the volumes of wholesale and
warehouses and office premises retail trade in East Kazakhstan Oblast during the
years of 2016 and 2017 was equal to 19% and 15%
respectively. Considering a positive correlation
between trading volume increases and increases in
the occupancy of warehouses, it is expected that the
Key investment data demand for services of UTLC will be rising.
Index Results Growth in the volume of industrial product
shipments from East Kazakhstan Oblast to
Project implementation period, years 24
other regions of the country There was a 401%
incl. investment stage, years 4 increase in the volume of shipped industrial
operational stage, years 20 products from East Kazakhstan Oblast to other
Investment, US$ thousands 29 674 regions of the country over the 2014-2016 period.
Project NPV, US$ thousands 24 920 This creates an additional demand for distribution,
storage and sorting of goods services.
IRR, % 24,8%
Low level of competition Currently, there are no
EBITDA returns, % 87%
similar enterprises in East Kazakhstan Oblast that
Payback period, years 6,3 provide a full range of high-quality services related
Discounted payback period, years 8,8 to transportation and logistics.

Quality indicators Project profitability

25,000 88% 89% 89% 100%
TLC facilities: 86%
90%
• TLC warehouse with a temporary storage 75% 72%
20,000 80%
zone (dry and climatic)
US$ thousands

70%
• Cargo container terminal: loading and 15,000 60%
unloading platform with a railway, 50%
container platforms, temporary storage
10,000 40%
zone and a container crane
30%
10,469

11,647

14,391

20,040

• Parking lot for cars and trucks

3,985

5,029

5,000 20%
• Admin and accommodation complex 10%
• Repairment workshop with a garage for - 0%
special equipment Year 3 Year 4 Year 5 Year Year Year
TLC area: 10 hectares 10 15 24
Revenue
EBITDA margin, %
KAZAKH INVEST:
August 2018 1
Investment Proposal
 Transportation and Logistics

Creation of a multimodal transportation hub at

the Astana International Airport

Market prerequisites:
Project Description:
Creation of a multimodal transportation hub at the Strategic location Astana Airport has a unique
Astana International Airport which in turn will chance to become a transcontinental air bridge, since
in a 8 hour flight radius there are 2.3 billion people,
become a center of a new Aerotropolis with
which includes populations of China, India and
commercial and residential objects, industrial zone, Russia.
logistical companies, recreational and touristic
Growth of passenger and freight traffic at the
facilities
airport Average annual growth rate of freight traffic
Location: project will be implemented in Astana at the Astana airport amounted to 8% (CARG since
city at the current Astana International Airport. 2013 until 2017), while passenger traffic increased
from 2.6 million to 4.3 million passengers in the same
Services provided: period. According to Lufthansa Consulting Astana
• Service of aircraft, service of passengers, cargo airport will see passenger traffic of 13 million
services and storage, multimodal cargo passengers and freight traffic of 117 thousand tons in
2030.
services; New destinations Due to the beginning of the
• Development of the Aerotropolis: attracting functioning of the Financial Center in the city of
private investors into the industrial and Astana and in accordance with the Nation’s Plan (Step
commercial zones and for construction of 67) new destinations will be launched to New York,
recreational, touristic and residential facilities. Tokyo and Singapore. This will lead to an additional
increase in passenger and freight traffic at the
airport.
Freight traffic from China Located in-between two
major exporters and importers of the world: China
and EU, will allow the multimodal hub to service the
transit of goods between China and Europe.
Ключевые инвестиционные показатели Structure of the multimodal hub and the
Aerotropolis
Показатель Результаты
Project implementation period, years 24
Aerotropolis
incl. investment stage, years 10
operational stage, years 14
Investment, US$ thousands 430,975 Multimodal hub
Project NPV, US$ thousands 967,264
Cargo terminal
IRR, % 21.3% Rail connection and logistics Freight apron
EBITDA returns, % 3-51% center

Payback period, years 9.7

Fueling station Second airstrip
Discounted payback period, years 11.7
Project profitability Industrial zone
47% 48%
700,000 45% 50%
43%
45% Nodal assembly High-tech manufacturing
600,000
37% 40%
500,000 35% Commercial zone
US$ thousands

30%
400,000
204,046

Financial
25% Hotels IT and outsourcing
%

corporations
96,685

300,000
20%
Medical companies
Education Residential quarters
200,000 15% facilities
291,411

404,500

417,068

610,322

10%
100,000 Recreational facilities
8% 5%
- 0% Mall and exhibition
2019 2023 2027 2030 2031 2041 Outlet-centers Amusement parks
centers

Revenue, US$ thousands EBITDA margin, %

KAZAKH INVEST:
Август 2018 г. 1
Инвестиционное предложение