Private equity looking to turn Kazakhstan into a global breadbasket

A Eurasianet Q & A with Didar Karimsakov, the head of the Qazaqstan Investment Corporation.

The private equity market in Kazakhstan is starting to gain some traction, helping to spur growth in non-resource areas of the country’s economy. The Qazaqstan Investment Corporation is the leading state entity charged with identifying and nurturing small- and medium-sized entities and projects in the manufacturing, agriculture, green energy, transport and digital technology sectors, able to draw on 20 private equity funds with a target capitalization of $2.8 billion. Since its formation in 2007, QIC has helped fund more than 120 projects, roughly 60 of which are currently in progress. As part of its efforts to develop the private equity market in Kazakhstan, QIC works with regulators to increase market transparency.

On the sidelines of the recent Astana International Forum, Eurasianet had the opportunity to pose questions about private equity’s place in Kazakhstan’s overall investment picture to Didar Karimsakov, QIC’s board chair. Karimsakov’s responses have been edited for brevity and clarity.

Eurasianet: What is a recent success story for QIC, and what projects are you working on right now?

Karimsakov: One of the most important investment projects that QIC is currently engaged in is the expansion and modernization of Almaty International Airport, Kazakhstan’s largest air gateway. As a strategic infrastructure asset, the airport plays a pivotal role in regional connectivity and economic development. QIC is partnering with international investors to enhance capacity, improve operational efficiency, and bring the airport up to the highest global standards. A brand-new international terminal was constructed and opened in 2024, increasing the airport’s annual passenger capacity. Passenger traffic continues to grow steadily, reaching over 11.4 million in 2024 — a 20 percent increase from the previous year’s total of 9.5 million. The airport plays a vital role in enhancing Kazakhstan’s position as a regional transport and tourism hub. Another important project that QIC is working on is the construction of a combined-cycle power plant with a capacity of 160 megawatts (MW) in the Mangistau region in Western Kazakhstan. This project will increase the volume of electricity produced to cover the deficit in the region.

Eurasianet: What sectors of the Kazakh economy are foreign investors and private equity showing the most interest in?

Karimsakov: Foreign investors and private equity firms are increasingly focusing on several sectors that align with Kazakhstan's strategic goals. The sectors in which QIC is most active are:

Agriculture and Food Security: Kazakhstan views agriculture and food security as strategic sectors for economic diversification, social stability, and long-term sustainability. We have over 200 million hectares of agricultural land, including approximately 24 million hectares of arable land. But currently the country uses only a fraction of its land efficiently, leaving significant room for expansion through technological modernization, climate-smart practices, and irrigation development. Kazakhstan already ranks among the top 10 wheat exporters globally, with annual exports reaching about 6-8 million tons, primarily to Central Asia, the Middle East, and China. With appropriate investment, modernization, and international cooperation, Kazakhstan has the potential to produce crops sufficient to feed up to 500 million people worldwide, particularly in water-stressed or import-dependent countries across Eurasia, the Middle East, and parts of Africa.

Renewable Energy: With vast potential for wind and solar power, Kazakhstan is making strides in renewable energy development. The government has implemented policies to attract investment in this sector, including feed-in tariffs and renewable energy auctions, aiming to increase the share of renewables in the national energy mix. According to the Ministry of Energy, as of 2024, Kazakhstan operates 154 renewable energy facilities with a total installed capacity exceeding 3 gigawatts (GW), encompassing wind, solar, hydro, and bio-gas power plants. In 2024, these facilities generated 7.6 billion kilowatt-hours (kWh) of electricity. Nine more facilities with a combined capacity of over 450 megawatt-hours (MWh) are expected to be launched this year. Looking ahead, Kazakhstan plans to commission 93 renewable energy projects with a total capacity of 2.3 GW by 2030. Additionally, auctions for 6.7 GW of renewable capacity have been approved for 2024 to 2027, with more than 3.1 GW already allocated. These initiatives align with Kazakhstan's commitment to achieving carbon neutrality by 2060, as outlined in the national Strategy on Achieving Carbon Neutrality.

Technology and Innovation: Kazakhstan is emerging as a regional hub for venture capital, with investments in AI, fintech, and edtech startups.

Eurasianet: What are the main challenges to attracting private equity investors for projects in Kazakhstan? Is trade uncertainty, in particular uncertainty relating to tariffs, making the investment climate more difficult?

Karimsakov: Of course, there are some challenges in attracting private equity investors for projects. Briefly, they are relatively shallow domestic capital markets, an underdeveloped ecosystem for private equity, and limited exit opportunities. Just a decade ago, these barriers could have been called significant. But over the past, let’s say 10 years, a lot of work has been done.

Ongoing efforts to diversify the economy, strengthen legal protections for investors, and integrate more closely with global financial institutions are promising signs. One important development is the Astana International Financial Center, which was launched in 2018. The Center offers capital market and asset management, and enjoys a special legal regime that enables it to offer incentives to companies, including exemption from corporate income tax and personal income tax for 50 years, a visa-free regime for citizens of dozens of countries and a simplified employment regime. The AIFC is regulated by English common law principles. In addition, Kazakhstani institutions, in particular the Kazakhstan Stock Exchange (KASE) and Astana International Exchange (AIX), provide opportunities for trading stocks, bonds, currencies, futures and other instruments. 

I can share some numbers from a new venture capital VC report which we presented this year. Since 2018, the VC market had a 6.6-fold growth, which confirms its dynamic development, and Kazakhstan occupies a stable leading position in it. In 2024, Kazakhstan continues to hold the lead in the region with a volume of $71 million. For comparison: Uzbekistan – $17.5 million, Kyrgyzstan – $1.7 million, Tajikistan – $4.6 million.

It's also worth noting, QIC analyzes conditions to make it easier for investors to navigate within Kazakhstan’s private equity market. And I think the numbers I've given show that the efforts are paying off. We are an emerging market today but actively doing our homework and are ready to achieve rapid growth.

Eurasianet: Desertification is becoming an issue for Kazakhstan. Is QIC involved in/or planning projects to promote efficient management of water resources to help improve agricultural productivity?

Karimsakov: Desertification is indeed a concern for Kazakhstan. However, the country is actively adopting resource-efficient technologies and sustainable land management practices to mitigate this trend and enhance agricultural productivity. 

Efforts are centered on scaling precision farming, smart irrigation, and soil regeneration technologies to ensure more output with less environmental impact. Support mechanisms are also expanding for innovations that reduce water usage, enhance crop quality, and restore degraded land.

QIC is exploring and supporting investment initiatives aimed at improving the resilience and sustainability of Kazakhstan’s agri-food system. This includes backing private equity funds and project structures that target modern irrigation technologies, sustainable land use practices, and climate-resilient agricultural solutions. One such initiative is called “Smart Agro”. The project involves the reconstruction and construction of a closed irrigation network designed to bring 667 hectares of fertile land back into agricultural use. The system’s closed-loop design minimizes water losses through evaporation and seepage, ensuring more efficient water use in a water-stressed region. This infrastructure is critical for climate adaptation, helping to prevent further soil degradation and desertification. The project also includes the acquisition of modern agricultural machinery to support timely planting and harvesting operations, thereby enhancing overall farm productivity.

In addition, QIC intends to establish a Green Fund to focus on financing environmentally friendly projects in the manufacturing, energy, agriculture, forestry and fisheries sectors. QIC is also considering projects aligned with the UN Sustainable Development Goals, particularly those focused on climate action, sustainable agriculture, and responsible water use. Through its partnerships with local and international investment firms, development finance institutions, and quasi-state bodies, QIC helps facilitate blended finance models that can de-risk investments in innovative water-saving infrastructure and agri-tech applications. Such approaches are essential in regions suffering from water scarcity and declining soil fertility.

Source: https://eurasianet.org/private-equity-looking-to-turn-kazakhstan-into-a-global-breadbasket