MEUS

MEUS has a comprehensive impact on citizens’ daily lives, delivering both economic and social benefits:

• Reduction of energy and utility costs in the long term through network modernization and loss reduction;
• Increased reliability of heat supply, electricity, water supply, and sewerage services;
• Improved quality of life through comfortable living conditions and higher sanitary standards;
• Stable business operations, stimulating job creation and increasing tax revenues;
• Reduced risks of accidents and interruptions in utility services;
• Enhanced public health and environmental conditions through access to clean water and the implementation of modern technologies.

In the heat supply sector, a Smart Metering system will be implemented; in the electricity sector – Smart Grid; and in water supply and sewerage – Smart Water.

This will enable:

• Minimization of heat, electricity, and water losses, thereby reducing financial expenses;
• Optimization of management processes and improvement of utility service efficiency;
• Increased efficiency of service providers and producers;
• Enhanced accuracy of consumption accounting and better monitoring;
• Prompt response to failures and emergency situations;
• Significant improvement in the reliability and quality of services provided;
• Improved accuracy and timeliness of consumption monitoring and cost accounting."

• Replacement and reconstruction of 1,622 km of worn-out heating networks;
• Construction of new networks for connecting energy facilities and generating electricity and heat.

Expected Outcomes:

• Significantly reduce the level of wear in heating networks;
• Improve the quality of services provided;
• Reduce heat losses during transportation;
• Expand the coverage of district heating across the country;
• Implement modern technologies to increase system efficiency (automatic monitoring and management systems);
• Use new materials for pipeline installation, significantly reducing operating costs.

The cost of delay in heating modernization plans:

• Expensive: Frequent accidents will lead to additional financial expenditures and social dissatisfaction;
• Unreliable: High heat losses will increase fuel consumption, putting additional strain on the energy system;
• Unjust: Rural and remote regions may remain served by outdated networks, resulting in uneven access to and quality of district heating across the country. This will exacerbate social inequality and may cause public discontent;
• Unprestigious: Threatens the achievement of national goals for environmental sustainability, hampers progress toward reducing carbon emissions, and limits improvements in overall energy efficiency.

Comprehensive modernization of water supply networks and facilities will ensure:

• Replacement of old and worn-out water pipelines;
• Reconstruction of water intake and treatment facilities;
• Construction of new water supply facilities in rural and remote areas;
• Implementation of modern water treatment technologies;
• Automation of water supply management processes;
• Use of innovative materials for water supply network construction, significantly reducing leaks and improving operational efficiency;
• Improvement of water quality monitoring systems, allowing rapid response to changes and prevention of environmental and sanitary risks.

The cost of delay in water supply modernization plans:

• Expensive: Water losses will continue to grow, requiring additional costs for treatment and transportation, increasing expenses for both public and private water supply companies;
• Unreliable: Increased incidents of pipe bursts and pump station failures will cause disruptions in water supply and further deterioration of service quality;
• Unjust: Worsening sanitary conditions and the spread of infectious diseases. In remote areas, the risk of insufficient access to clean drinking water will increase, exacerbating social inequality and posing a threat to public health;
• Unprestigious: Long-term lack of access to quality water may hinder the achievement of strategic goals related to improving living standards and the country’s sustainable development.

Infrastructure development is concentrated in major cities (Astana, Almaty, Shymkent) and industrial regions (Karaganda, Pavlodar, East Kazakhstan regions).

Remote, rural, and sparsely populated areas—particularly in the western and southern regions—face a shortage of quality utility infrastructure.

In several regions of the country, some water supply and wastewater facilities are fully owned by private companies. For example, in Shymkent and Pavlodar. Water utility enterprises in regional cities are being established with private-sector participation. In Shymkent, 78% of these enterprises are privately owned; in Karaganda, 49%; and in Pavlodar, 20%.

In cities with populations up to 20,000 and in rural district centers, water supply and wastewater systems are primarily operated by private water utility enterprises. There have been cases where privately owned water utility companies failed to meet their obligations. As a result, the facilities were returned to municipal ownership.

The eastern regions of Kazakhstan border Russia and China, which supports the export of electricity.

Large distances between settlements and cold winters create a high demand for district heating and the modernization of networks.

The region is industrially developed, with a predominance of non-ferrous metallurgy, energy, and mechanical engineering sectors. It is one of the largest electricity consumers (including hydroelectric power plants on the Irtysh River).

Electricity supply: One of the best in the country due to local hydroelectric and thermal power plants, but there are localized outages in rural areas caused by worn-out transmission lines.

Water supply: The Irtysh River plays a central role, providing abundant water resources, although their distribution is uneven.

Features of Northern Regions of Kazakhstan (North Kazakhstan, Kostanay, Akmola, Pavlodar regions)

The northern regions are characterized by long winters with temperatures down to -30 °C and below, as well as population decline, particularly in small and rural settlements. In villages, this affects the prioritization of infrastructure development.

Electricity Supply: Well-developed networks due to proximity to coal-fired POWER PLANTs (e.g., Ekibastuz POWER PLANT). Centralized electricity supply is often used, even in remote settlements.

District Heating: Urban residents receive heat from centralized systems (Heating Electrical Stations). In rural areas, heating is mainly individual (stove or coal-based).

Water Supply: Cities are served by centralized systems, but water quality does not always meet sanitary standards. In villages, water comes from standpipes, wells, and in some locations, delivered water.

Wastewater (Sewerage): Centralized sewer systems operate only in major cities.

Southern Regions of Kazakhstan (Almaty Region, Zhetysu, Turkestan, Shymkent) are characterized by mild winters. Consequently, the climate places lower demand on district heating, but there is a shortage of drinking water, particularly in Turkestan Region and Zhetysu.

High seismic activity limits centralized infrastructure development.

Agriculture is the predominant sector in the region, resulting in higher water consumption compared to other regions of Kazakhstan.

The region is known for high birth rates, population density, and a high level of urbanization in Shymkent and Almaty Region, alongside a large number of rural settlements.

Electricity supply coverage is high. However, the region is energy-dependent on the central and northern parts of the country, leading to occasional outages during peak hours.

Electricity Supply

Coverage: High — nearly 100% of the population.

Issues: Worn-out networks, especially in rural areas; power outages in remote villages; energy isolation in the southern and western regions of the country.

Heat supply

Cities (Astana, Almaty, etc.): Mainly centralized heating through Heating Electrical Stations.

Rural areas: Mostly individual heating (coal, firewood, gas).

Issues: Aging infrastructure, inefficient heating systems, high heat losses.

Water Supply

Major cities: Centralized, relatively stable water supply.

Rural regions: Wells, boreholes, delivered water.

Issues: Irregular water supply, source contamination, shortage of drinking water in southern and western regions.

Wastewater (Sewerage)

Cities: Centralized sewer systems (often outdated).

Villages: Cesspools, septic tanks.

Coverage: Less than 50% of the population nationwide, particularly low in rural areas.

Service Coverage:

• Electricity supply: ~100%
• District heating: ~70% (in cities)
• Water supply: ~90% (in cities), ~60% (in villages)
• Wastewater (sewerage): ~70% (in cities), ~15–20% (in villages)

Western Regions of Kazakhstan (Atyrau, Mangistau, West Kazakhstan, Aktobe regions)

The climate is arid, semi-desert, and desert. The region is rich in oil and gas, but infrastructure development is uneven. The main issue is a shortage of freshwater, despite high resource revenues.

District Heating: Mostly autonomous; few centralized Heating Electrical Stations.

Electricity Supply: High coverage, but rapid industrial development causes frequent outages in remote areas.

Water Supply: One of the most pressing issues is the acute shortage of freshwater, primarily sourced from the Ural River. Delivered water is also used.

Replacement of worn-out components with more modern ones;

• Increasing the capacity of networks and transitioning consumers to higher voltage levels;
• Upgrading power plants;
• Improving the efficiency of existing capacities;
• Addressing reactive power issues. Compensation of reactive power using compensating devices will help reduce losses in distribution networks and improve the efficiency of the entire energy system;
• Upgrading substations to improve electricity quality and reduce the load on network sections with high wear;
• Converting parts of the network to 10 kV overhead power lines, reducing electricity losses and improving reliability.

The cost of delay in electricity supply modernization plans:

• Expensive: Reactive power issues will lead to reduced electricity quality, increased losses, and higher operating costs;
• Unreliable: Increased accidents and technological disruptions may affect the stability of electricity supply, especially in winter;
• Unjust: Network overloads, frequent outages, and instability across the energy system may cause social unrest;
• Unprestigious: Failure to implement the project will hinder the achievement of national goals related to sustainable development and improved energy efficiency.

The average wear of electricity supply networks is 76%, while the wear of main equipment at power plants has reached 56.8%. Over one-third of power plants have equipment wear in the range of 70–90%.

The highest level of wear is observed at thermal power plants and large-scale power plants. At 14 power plants, wear exceeds 80%, and at 21 plants, wear ranges from 60–80%. Most accidents occur at plants with wear above 80%.

The situation in regional electric grid companies remains challenging. Six electric grid companies have a critical level of wear (85–97%), and another six companies have a high level of wear (65–85%), increasing the risk of accidents and disruptions in power supply. 

The efficiency of power grids is further reduced by asynchronous electric motors and transformers, which consume reactive power.

As of early 2023, the total length of district heating networks in cities is 12.1 thousand km, of which 6.7 thousand km require replacement, with an average wear level of 55%. The required investment volume is approximately 2.2 trillion tenge.

According to the Local Administrations data, 83 natural monopoly entities (NMEs) provide heating services in 74 cities. Of these: 61 municipal enterprises manage 10.2 thousand km of networks (wear – 52%); 22 private entities manage 1.9 thousand km of networks (wear – 70%).

Breakdown by degree of network wear:

Wear less than 50%: 45 cities, total length 4.3 thousand km, 1.4 thousand km require replacement; serviced by 52 NMEs (39 state, 13 private).

Wear 50–70%: 19 cities, total length 5.9 thousand km, 3.7 thousand km require replacement; managed by 20 NMEs (15 state, 5 private).

Wear over 70%: 7 cities, total length 1.9 thousand km, 1.6 thousand km require replacement; managed by 7 entities (4 state, 3 private).

In four entities (Vodokanal State-Owned Utility Enterprise Based on the Right of Economic Management of Ridder Local Administration, Shemonaikha Su Arnasy LLP, Arkalyk Fuel & Energy Complex State-Owned Utility Enterprise, Ryabinina Ye.F. Individual Entrepreneur) in Ridder, Shemonaikha, and Arkalyk, networks totaling 52 km have exceeded their normative service life (over 25 years).

Wastewater infrastructure extent of wear across Kazakhstan exceeds 60%, and in some cities it surpasses 90%. In major cities, many sewage systems were constructed in the 1950s–1970s. Consequently, their operational efficiency is extremely low, and the technologies and equipment in use are long outdated.

Comprehensive renovation and modernization of sewage treatment facilities (STFs) include the following:

• Replacement of old pipelines;
• Reconstruction of existing treatment facilities using modern technologies;
• Expansion of capacities to ensure the required level of wastewater treatment;
• Construction of new wastewater and treatment facilities in areas where existing capacities cannot handle the increased load, particularly in rapidly growing cities and metropolitan areas;
• Adoption of modern wastewater treatment technologies to significantly improve process efficiency, reduce negative environmental impact, and enhance sanitary conditions;
• Integration of innovative solutions, including automation of STF management processes, implementation of environmentally friendly technologies, and enhanced monitoring of wastewater quality at all stages of treatment. This will improve the reliability and safety of wastewater infrastructure while reducing operating and maintenance costs.

The cost of delay in wastewater management plans:

• Expensive: Untreated or insufficiently treated wastewater may enter natural water bodies, increasing the risk of contamination of drinking water and the spread of infectious diseases. Pollution of rivers, lakes, and other natural resources will incur significant remediation costs;
• Unreliable: Continued operation of worn-out and outdated sewage systems will lead to more frequent emergencies, such as pipe bursts and overflow of treatment facilities. Low STF efficiency will continue to worsen the country’s environmental situation;
• Unjust: Declining biodiversity and deterioration in the quality of life will further increase social tensions in regions where infrastructure fails to meet modern standards. This is particularly relevant for large cities and industrial centers with high concentrations of wastewater;
• Unprestigious: Problems with wastewater treatment and sewage management directly affect environmental quality and public health, impacting the country’s image, especially in interactions with neighboring states.

The average wear and tear level in water supply infrastructure is 40%. Many water supply networks are over 30 years old. In some regions, the wear and tear of water supply networks and facilities exceeds 50%.

Access to water supply services is 98.9% in cities and 96.6% in rural areas.

Out of 89 urban settlements, the population of 65 cities is fully supplied with centralized water. Out of 6,256 villages, 5,130 have access to water supply services. Urban populations in 9 regions enjoy 100% access to water supply services.

Due to the high wear and tear of Nura group water pipeline in Akmola Region, a local state of emergency was declared in 2023.

Effects of worn-out water supply networks:

• Cause leaks and water losses;
• Reduce the quality of services provided;
• Contribute to violations of sanitary standards;
• Worsen environmental conditions, especially in regions with high population density and industrial zones;
• Lead to shortages of drinking water;
• Pose risks of non-compliance with chemical and biological standards, directly affecting public health.

The National Project covers all the Kazakhstani regions. It encompasses the following sectors:

• Power supply;
• Heat supply;
• Water supply;
• Sewerage.

In the power supply networks, the average level of depreciation is 76%. At power plants, the wear of main equipment has reached 56.8%, with more than one-third of the stations operating with depreciation levels ranging from 70% to 90%.

The heat supply sector, from heat generation to consumption, is characterized by a low efficiency rate (an average of 75% for boilers and 52% for the overall system), high emissions, and significant heat losses (18–42% during the transportation and distribution stages).

In the water supply sector, the average level of infrastructure depreciation is 40%. Many water pipelines are over 30 years old. In some regions, the wear and tear of water supply networks and facilities exceed 50%.

The level of deterioration of wastewater treatment facilities across Kazakhstan exceeds 60%, and in some cities, it is over 90%. In major cities, sewerage systems were built back in the 1950s–1970s, resulting in extremely low operational efficiency. The technologies and equipment in use are long outdated.

Thus, modernization will be carried out across all four sectors.

Modernization projects in the energy and utilities sectors are generally characterized by low profitability for private capital and foreign investors. Therefore, it is essential to develop mechanisms for attracting investment, including the following:

Main sources of financing:

• Direct government investments and subsidies (from the national or local budget);
• Public–Private Partnership (PPP): a private investor builds or modernizes a facility and then receives income through service fees or compensation from the state;
• Concessions: long-term transfer of an asset to a private investor for management, with obligations to invest in reconstruction or operation. The concession participant receives income either from the operation of the facility or from the state;
• “Rate-for-Investment” mechanism: funded from the own revenues of natural monopoly entities. Energy or utility enterprises are allowed to increase rates in exchange for specific investment commitments;
• International Financial Institutions (IFIs);
• Bond issuance and borrowed funds;
• Private investments;
• Grants and environmental funds;
• “Green” investment mechanisms, applied in renewable energy, energy efficiency, and emission reduction projects;
• National funds and development institutions.

The application of diverse financing mechanisms contributes to the effective renewal and modernization of the country’s energy and utilities networks.”

• Equipment wear and tear
• Low efficiency of coal-fired thermal power plants
• Electricity transmission losses reaching 12–15% in certain regions
• Centralized and inflexible grid
• Forced electricity exports

The emerging deficit in Kazakhstan is being covered through imports from Russia at high prices. This is due to increased electricity consumption, worn-out infrastructure, and a high incidence of failures in the energy system. As a result, electricity supply to consumers is restricted, causing dissatisfaction among the population and businesses.

According to the Ministry of Energy, in 2025 Kazakhstan is projected to face an electricity deficit of 5.7 billion kWh, which is 72.7% higher than the previous forecast. Electricity consumption is expected to reach 122.8 billion kWh, while production is projected at 117.1 billion kWh.

Types of Social Support for Socially Vulnerable Groups in the Republic of Kazakhstan Include:

• Provision of housing assistance;
• Subsidization of a portion of rent payments;
• Provision of targeted social assistance;
• Provision of social assistance in connection with difficult life circumstances.
• Over the past five years, housing assistance has been provided to 223,400 families.

Since 2024, 6,196 low-income families have been receiving assistance totaling over 140 million tenge.

In December 2023, the Ministry of Industry and Construction established a new expenditure threshold for consumers. Housing assistance is provided if utility costs exceed 10% of the average monthly total family income.

Previously, this threshold ranged from 2% to 20%.

Documents are uploaded automatically from government databases, except for utility bills.

• The Paris Climate Agreement (2015). Kazakhstan has committed to reducing greenhouse gas emissions, developing renewable energy, and improving energy efficiency. The modernization of energy infrastructure is a key instrument for achieving these goals.
• United Nations Sustainable Development Goals (SDGs). The implementation of the global SDG agenda includes ensuring access to clean energy (SDG 7), developing sustainable infrastructure (SDG 9), combating climate change (SDG 13), and improving the quality of utility services.
• Eurasian Economic Union (EAEU) and Regional Initiatives. Within the framework of integration cooperation, member states harmonize technical standards, implement joint projects for the development of energy infrastructure, and promote the introduction of innovative technologies.

The situation in each region is individual. If a rate increase is necessary, the relevant government authorities review detailed calculations submitted by service providers.

Overall, rate policy should be fair, balanced, and incentivizing, ensuring both sustainable sector financing and protection of the interests of the population and businesses.

Main Objectives of Rate Policy:

• Ensuring sector investment attractiveness: Rates should allow service providers to recover invested funds and earn profits for reinvestment;
• Promoting energy efficiency and modernization: The rate structure should encourage enterprises and consumers to reduce losses and transition to more efficient technologies;
• Social equity and protection of vulnerable populations: Achieved through subsidies, targeted assistance, and social consumption norms;
• Transparency and predictability: Consumers and investors should understand how rates are formed and how they will change.

Rate policy should avoid the following: 

• Artificially suppressing rates despite high network wear (which leads to system failures);
• Cross-subsidization (e.g., when households pay less and businesses pay more);
• Absence of a long-term investment component in rates.