Wind power plant project implemented with the support of Kazyna Capital Management continues to demonstrate positive results

Kazakhstan is implementing a number of measures to reduce greenhouse gas emissions on the way to achieving the goal of carbon neutrality by 2060 announced by the Head of State at the UN Summit on Climate Ambitions in December 2020. The new Environmental Code of Kazakhstan is among them; its changes will increase the responsibility of industrial enterprises for environmental pollution and strengthen carbon regulation by increasing the cost of quotas for greenhouse gas emissions and other emissions into the environment. In addition, Kazakhstan intends to reduce greenhouse gas emissions by 15% by 2030 in order to meet Kazakhstan's commitments under the Paris Agreement. Investing in "green" projects directly affects the achievement of Kazakhstan's strategic objectives to improve the climate situation in the region, as well as increases the loyalty of international financial institutions and contributes to the inflow of foreign investment. In its investment activities, Kazyna Capital Management JSC (a subsidiary of Baiterek NMH JSC, hereinafter - KCM) follows the principles of responsible investment, thereby increasing its portfolio of "green" projects. To date, KCM supported 4 projects in the area of "green" energy for a total amount of KZT 12.4 bln. KCM provides support to businesses in non-resource sectors of the economy using equity and mezzanine financing through private equity funds. At that, the success of exit from the project depends on increasing the added value of the enterprise's asset, i.e. its stability and reliability. In many ways, the stability factor is reflected in the ESG (Environment, Social issues, corporate Governance) principles, the disclosure of which is now necessary for investors in the investment analysis of projects. The global responsible investing agenda is setting new trends - investors are increasingly relying on non-financial disclosure. According to Harvard Business School, 71% of LPs will reject a GP investment initiative because of a lack of ESG principles. Moreover, USD 1 invested in companies with a high sustainability score yielded 51% more income than those with a low score. One of KCM's successful infrastructure projects in the area of "green" energy is "Construction of Astana EXPO-2017 wind power plant with a capacity of 100 MW for wind energy conversion", implemented by CAPEC Green Energy LLP with the financial support of KCM, Development Bank of Kazakhstan JSC and Industry Development Fund JSC. The implementation of the project ensured the annual consumption of clean energy for more than 10,000 families. Wind Power Plant (hereinafter - the WPP) saves more than 79,000 tons of fuel equivalent per year, reduces greenhouse gas emissions by 230,000 tons per year, which is equivalent to the emissions of 113,000 cars. During the construction of the facility, more than 300 jobs were created and more than 20 specialists were trained to operate the WPP. The WPP was implemented in two start-up complexes: start-up complex I with a capacity of 50 MW was put into operation on August 26, 2019, and start-up complex II with a similar capacity was put into operation on November 26, 2020. Funds managed by Kazyna Capital Management - DBK Equity Fund C.V. and Baiterek Venture Fund through equity and mezzanine financing instruments in 2018 provided investments in the amount of KZT 3.6 bln. through acquisition by AOM Metal B.V. of the share in the authorized capital of CAPEK Green Energy LLP for implementation of "Construction of the first start-up complex of wind power plant in Akmola region with capacity of 50 MW" project. On October 18, 2019 the amount of financing for implementation of the project on "Construction of the second start-up complex of the wind power plant in Akmola region with capacity of 50 MW" was KZT 1,115 bln. by increasing the share in CAPEK Green Energy LLP. The wind power plant uses a set of new developments and technologies for converting wind energy, adapted to the climatic conditions of Akmola region. In whole, 29 windfarms manufactured by VESTAS, a world leader in wind power generation, were installed. By investing in "green" energy, KCM contributes to combating the effects of climate change. Globally, the principles of responsible investing have proven to be a compass in the pursuit of responsible investment and the long-term health of the financial system. By developing the expertise of its team, KCM will continue to support businesses in the non-resource sectors of the economy by integrating ESG standards at all stages of investment activities.