Kazakhstan is looking for new funding for water needs as pressure on supplies and ageing infrastructure increases. The Kazakhstan blue finance framework, developed through Partnership for Action on Green Economy (PAGE), could help move more private capital toward water projects. UNDP says the country may face a water deficit of 12–15 billion cubic metres by 2040. It also estimates that Kazakhstan needs US$1–1.5 billion in water-sector investment every year. Therefore, public funding alone may not cover the scale of the challenge. The work will define which investments qualify as “blue,” identify potential projects and prepare conditions for a pilot blue bond. Meanwhile, officials and partners are examining irrigation, wastewater treatment, water efficiency, digital systems, pollution control and ecosystem restoration. The initiative is not a PPP programme by itself. However, it could create a stronger financing base for projects that later use PPP or concession structures, where long-term private capital and operating expertise are needed.
Kazakhstan already has a substantial water infrastructure pipeline that could complement its emerging sustainable finance agenda. Under the national programme for modernization of water and wastewater infrastructure, the government plans to attract around KZT1.9 trillion in investment and modernize about 5,000 kilometres of water-supply networks and 2,800 kilometres of wastewater networks. Separately, Kazakhstan plans 45 projects for the construction and modernization of wastewater treatment facilities. The government has identified several financing routes for these projects, including loans from international financial institutions, bond financing through Baiterek Holding, public-private partnerships and targeted budget transfers. Seven projects are planned with financing from the EBRD and Asian Development Bank, while the wastewater treatment project in Konaev is being implemented through a PPP. Moreover, official data show that average wear at urban wastewater treatment facilities exceeds 65%. Against this background, the Kazakhstan blue finance framework could add another financing layer. However, blue bonds would fund eligible investments rather than replace the contractual, risk-allocation and performance arrangements required under a PPP.
For investors, the central issue is turning priority projects into bankable transactions. Blue finance can help by directing capital toward projects that improve the sustainable use and management of water resources, while blue bonds provide a way to raise debt specifically for eligible water and environmental investments. However, financing alone does not make a project bankable. Investors still need clear revenue arrangements, credible project structures and a workable allocation of risk. In a PPP, these elements usually include construction obligations, operating standards, payment mechanisms and long-term performance requirements. Consequently, blue finance and PPPs can serve different but complementary purposes. The Kazakhstan blue finance framework may help public bodies or utilities mobilize capital for eligible wastewater infrastructure, while PPP structures could provide the contractual framework for delivering some projects. Tariff policy, government support and credit quality will therefore remain important, as will strong feasibility studies and transparent procurement. UNDP’s work matters because it focuses not only on financing tools but also on building an investable project pipeline.
Kazakhstan already has experience with water PPPs. The Kazakhstan PPP Center lists long-term water-supply projects in Zhaisan and Kainar in Almaty Region, where PPP agreements cover the reconstruction and construction of water-supply systems. Both projects run from 2019 to 2039 and include compensation of investment costs as a form of government support. These projects provide domestic precedents for using PPP arrangements in the water sector. As Kazakhstan moves ahead with a wider programme of wastewater modernisation, new projects will require sound technical studies, reliable tariff or payment arrangements and careful lifecycle planning. In addition, the government aims to reduce water-supply network wear to 33% and wastewater network wear to 41% by 2029. If blue finance becomes integrated with this wider reform programme, Kazakhstan could develop a broader financing ecosystem for modern water infrastructure.
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