The Kazakhstan government has approved a complex privatization plan for 2021-2025 (Resolution of the Government No. 908 dated December 29, 2020; this became effective on January 1 this year). 

According to the plan, quasi-state entities with a balance sheet exceeding 2.5 million monthly calculation indices (around KZT7.3 billion or US$17.3 million) will be transferred into a competitive environment on a priority basis.

New entities, namely two large hydroelectric power plants in Ust-Kamenogorsk and Shulbinsk, have recently been included into the list of major state organizations subject to privatization.

According to the Kazakhstan Ministry of Finance, the previous privatization plan for 2016-2020 was fulfilled by more than 90%. At the same time, we note that the previous plan remained substantially outstanding as far as the Sovereign Wealth Fund “Samruk-Kazyna” JSC is concerned; its assets were meant to be transferred into a competitive environment. The apparent reason for this delay was the unfavorable economic situation, which hampered the offering of shares of the relevant enterprises on the securities market.

According to Samruk-Kazyna, the privatization timeline for its major assets was adjusted as follows: Kazpost and Samruk Energo – in 2021, KazMunayGas, Air Astana, Tau-Ken Samruk and Qazaq Air – in 2022, and Kazakhstan Temir Zholy – in 2023.

At the same time, the following organizations were added to the list of major subsidiaries and affiliates of national management holdings:

• SSAP LLP (subsidiary of United Chemical Company LLP);
• Steel manufacturing LLP (subsidiary of National Company “Kazakhstan Engineering” JSC); and
• Investment Fund of Kazakhstan JSC (subsidiary of National Management Holding “Baiterek” JSC).

As with the previous privatization plan, the new plan does not have a specific timeframe for the sale of the assets listed therein.  This is not surprising, since timing of the sale of assets is always influenced by specific market conditions.

We will keep you posted on any material news related to the privatization program.