KAZAKİSTAN CUMHURİYETİ ANKARA BÜYÜKELÇİLİĞİ

Agroindustrial sector Agro-Industrial Complex Mixed crop-livestock cattle farming complex

About the Project Prerequisites for implementation of the Project Construction and establishment of a cattle breeding farming complex. Rising global demand for beef - OECD forecasts indicate an increase in total global consumption of Objectives & Scope: beef. Compound annual growth rate for 2019- Creating a sustainable, developing bovine 2023 is projected to be at around 1.14%. breeding and fattening enterprise, for further Price differential with neighboring countries - slaughter, processing and sale. The average price of beef Russian Federation’s Grain cultivation will diversify cattle feed supply bordering regions, are 11% higher than in and the Project itself, resulting in a sustainable . The average price in Chinese markets enterprise. amounted to $ 10.56 per kg, which is more than Project location: double of average price of beef in Kazakhstan. Karasu village Amangeldy district Kostanay Increasing export volumes – Kazakhstan’s beef oblast export volumes are growing continuously in recent Principal products: years. The volume of exported Kazakhstani beef beef, wheat, barley, oats, hay increased almost 7 times compared to 2017, mostly due to the start of large shipments to Project’s peak capacity: . More than 10% of all exports are also up to 100 000 heads of breeding livestock by sent to . In 2017, Kazakhstan first exported 2030 beef to the UAE.

Investment attractiveness of the Project Profitability Project 90.000 60% 50% 50% Indicator Results 80.000 49% 44% 50% Investment amount, US$ 70.000 22,804 thous. 60.000 40% Project NPV, US$ thous. 67,542 50.000 30% 40.000 IRR, % 19.8% 30.000 14% 20%

US$ thousands US$ 20.000 EBITDA yield, % 44% 10% 10.000 47.716 67.665 75.396 82.394 Payback period, years 9.8 0 23.129 0% Discounted payback period, Year 5 Year 10 Year 15 Year 20 Year 24 13.0 years Revenue, US$ thous. EBITDA margin, % Project Location: Kostanay oblast Buildings and structures for the Project

Quan- Area, Item Length Width tity m2

Calf barn 10 130 24 ~ 3,120 Doset farming complex Cow barn 40 130 30 ~ 3,900 Hangar for 1 24 ~ 2,400 equipment 100

Grain 1 100 24 ~ 2,400 warehouses

Laboratory 1 24 24 ~576

Slaughterho 1 100 24 ~2,400 use Cattle 1 - - ~1,500 feedlot Total 55 ~196,476

KAZAKH INVEST: July 2019 2 Investment proposal Agro-industrial complex

Organization of a comprehensive cattle breeding farm to expand the production of canned meat

Project overview: Project market assumptions: Organization of a comprehensive cattle breeding Growing demand for canned meat in farm (fattening and slaughter) in order to expand Kazakhstan. According to the statistics committee the existing production of canned meat. of the Republic of Kazakhstan, the consumption of Project goals: finished and canned meat products in 2018 amounted to 112.3 thousand tonnes in Kazakhstan. • Increased workload of the meat processing Growth of demand for beef. According to complex Kublei LLP; forecasts by the OECD and UN FAO, there will be an increase in the overall level of beef consumption in • Creation of a full-cycle production of meat the world. products: from fattening and slaughter of cattle Import substitution. The volume of imports of to the production of freshly frozen and chilled canned meat from lamb and horse meat in 2018 meat, canned food and products derived from amounted to 636 tonnes, which is higher by 148% offal. compared to the previous year, which may indicate Project Initiator: Kublei LLP is one of the largest an increasing import dependence of the country. processing enterprises in Kazakhstan, engaged in Export development. The volume of canned meat the production of freshly chilled meat: horse meat, export from lamb and horse meat in 2018 amounted beef, lamb, as well as the production of canned to 212 tonnes, which is 135.5% higher than the products. previous year. Own raw material base. According to the Commercial products: Beef and offal sent for statistics committee of the Republic of Kazakhstan, further processing to the meat processing complex in 2017, the share of livestock in the West of Kublei LLP. Kazakhstan Oblast of the republican indicator was equal to 6.35%. Key investment indicators Project profitability

Indicator Results 12.000 50% 39% 39% 40% 40% 10.000 39% 40% Investment, USD thousands 7,474 40% 8.000 Project NPV, USD thousands 15,731 30% 6.000 . USD . 35.6% 20% IRR, % 4.000 thous EBITDA returns, % 40% 2.000 10% 11.073 5.574 6.276 7.094 7.951 9.918 0 0% Payback period 4.9 Year 3 Year 5 Year 8 Year Year Year Revenue, thous.11 USD 20 24 Discounted payback period 5.7 EBITDA margin, % Project location: Cattle slaughtering process Uralsk, West Kazakhstan Oblast, Kazakhstan Cattle slaughtering

Kublei LLP Antemortem Nur-Sultan inspection Bleeding Skinning

Removal of the internals

Postmortem examination Pre-cooling and storage By-products workshop Deboning and packing line

Meat for sale and By-products for sale canned food

KAZAKH INVEST: October 2019 Investment proposal Agro-Industrial Complex

Organization of an integrated farm for the breeding of small cattle (sheep)

Project description: Prerequisites for implementation of the Organization of an integrated farm for the breeding Project: of small cattle: fattening and slaughter of small Rising global demand for lamb. According to cattle with the subsequent sale of sheep carcasses. forecasts, the world will see an increase in the The parallel cultivation of grain will ensure the overall level of mutton consumption. The average diversification of the business and the feed base of annual growth rate (CAGR) during 2019-2023 will the farm, which in general will enhance the be 2.12%. sustainability of the enterprise. Project implementation location: Price differential with neighboring countries. The average price for lamb in the regions of Russia Karasu village, Amangeldy district of of Kazakhstan bordering Kazakhstan is higher than Central Kazakhstan by 21%. The average price in the Project initiator: Chinese market (US $ 8.5/kg) is more than 2 times Dosset Farm LLP higher than the average price for mutton in the RK. Maximum project capacity: Development of export supplies to foreign Livestock keeping of 400,000 heads of small cattle countries. The volume of mutton exports from Commercial products: Kazakhstan are growing at a fast pace in recent Lamb carcass weighing up to 36 kg years. The volume of exported lamb increased by Production process: almost seven times compared to 2017. This growth is due to the start of large deliveries to , which Fattening of small cattle ~300,000 heads per • has become the main buyer of Kazakhstan lamb. year More than 10% of the total volume of exports are • Meat production ~11,000 tonnes per year also sent to the Russian Federation. In 2018, lamb producers made the first shipment of lamb to Investment attractiveness of the Project Project Profitability Indicator Results 80.000 52% 60% 51% 51% 53% 70.000 Investment amount, US$000 20,000 50% 60.000 40% Project NPV, US$ thousands 86,575 50.000 30% 40.000 IRR, % 25.0% 13% 20% 30.000 10.301 20.000 10% EBITDA yield, % 40% -6%

US$ thousands US$ 0%

10.000 52.913 59.171 65.906 72.024 Payback period, years 7.8 0 21.011 -10% Year 2 Year 5 Year Year Year Year Discounted payback period, years 9.4 10 15 20 24 Revenue, US$ thousands Project Location: EBITDA margin, % Kostanay Oblast Land plots

Area, ha Soil Type / Nur-Sultan Drawn up Purpose Current Total for rent

Arable land 4,000 4,000

Pastures 40,000 150,000 190,000

Almaty Hayfields 2,000 50,000 52,000

Construction 178 178 bases

Total 46,178 200,000 246,178

KAZAKH INVEST: July 2019 4 Investment proposal Agro-Industrial Complex

Small cattle mixed farming in

Description of the project: Prerequisites for implementation of the Project Organization of a cattle breeding farm: fattening and Growing global demand for lamb. According to slaughtering of small cattle with subsequent sale of forecasts by the OECD and the UN FAO, there will be sheep products. an increase in the global level of consumption of Aims of the project: mutton. The average annual growth rate in 2019- Creation of a steadily developing enterprise for the 2023. will be 2.12%. breeding of small cattle, which, as a matter of priority, develops the production of lamb with Price differential with neighboring countries. further development and deepening of processing. The average price of mutton in the regions of the Providing the farm with its own feed base will allow Russian Federation bordering with the Republic of supporting the production process regardless of Kazakhstan is 21% higher than the average price fluctuations in the feed market and, in general, Kazakhstan prices. The average price in the PRC will increase the sustainability of the enterprise. market (8.5 USD / kg) exceeds the average price of Initiator: SalurbeyGroup LLP mutton in the Kazakhstan by more than 2 times. Maximum capacity: 90,000 heads of breeding Development of export to foreign countries. stock Volumes of mutton export from Kazakhstan have Output: lamb, milk, skin, wool. It is planned to been growing at a dynamic pace in recent years (7 build a cannery, a workshop for the production of times since 2017). This is due to the beginning of meat and bone meal and fat. large deliveries to Iran, which is the main buyer of mutton from Kazakhstan. Over 10% of all exports go to the Russian Federation. In 2018, lamb producers made their first shipment to China.

Investment attractiveness of the Project Project Profitability

30.000 50% 60% Indicator Results 51% 51% 51% 25.000 50% Investment amount, US$ 33 009 thous. 20.000 33% 40%

Project NPV, US$ thous. 22 161 15.000 30%

IRR, % 14,72% 10.000 20% US$ thousands US$ EBITDA yield, % 45,98% 5.000 10% 12.747 20.141 22.621 25.205 27.671 Payback period, years 9,69 0 0% Year 5 Year 10 Year 15 Year 20 Year 24 Discounted payback period, 15,5 years Revenue, US$ thous. EBITDA margin, %

Project Location: Aktobe region Breed • Merino breed - a breed of fine-fleece sheep that are bred to produce high-quality wool and meat. • Romanovskaya breed - coarse breed of sheep of "fur coat" direction. Nur-Sultan

Salurbey farming Stead complex Title Area, ha

Farming complex area 100 Almaty

Shymkent herbs 4 950

Cereal 4 950

Total 10 000

KAZAKH INVEST: October 2019 Investment proposal Agroindustrial complex Production of potato starch

Project description: Market prerequisites Construction of an integrated agro-industrial Export potential complex consisting of a potato starch production Growing imports of potato starch by neighboring plant and a cattle fattening site for slaughter. countries offers an opportunity to occupy a niche in Planned production capacity: the China, Russia and Uzbekistan markets. The total • Main: potato starch - up to 14 tonnes a year; potato starch imported by these countries in 2018 amounted to about 74 thousand tonnes and has a • Secondary: beef; potato juice, potato squash, tendency to increase. For example, the average cow subproducts. annual growth rate of imports of potato starch by Location: China over the past 5 years was 12.7% in physical Pavlodar oblast, , Kenesskiy rural terms. district. , Novoyamishevo village. No local production and high level of import Project initiator: dependency «Kereku Agro» LLP There is no production of potato starch in the country, despite the fact that in the food, textile, paper industries potato starch is superior to corn starch in terms of quality. The average annual volume of imports of potato starch in Kazakhstan is relatively stable and in recent years has amounted to about 4.2 thousand tons for an amount of about US$ 2.5–3 million.

Key investment indicators Project profitability:

Indicator Results

Investment amount, US$ thous. 44,948

Project NPV, US$ thous. 30,760

IRR, % 28.7

EBITDA margin, % 30-38%

Payback period, years 5.1

Discounted payback period, years 7.1

Key facilities of the Complex: Location of the Project: Pavlodar oblast

Irrigation system Pavlodar oblast Creating an irrigation array with an area of 6000 hectares for Cattle fattening site growing additional raw The one-time capacity of materials and fodder the site is designed for crops (cultivation and 5000 heads. The number processing - through the of cycles per year is two. Initiator) Mainly breeding of Starch plant Kazakh white-headed Production of potato and Hereford breeds. starch with a capacity of 15,000 potatoes per hour and more than 2,000 starch per hour.

KAZAKH INVEST: July 2019 6 Investment proposal Agroindustrial complex Organization and development of the production of vegetable oils

Description of the Project: Market background: Organization and development of the production of Growing demand for vegetable oil and oilcake vegetable oils. Sales of finished products will be in the domestic and global markets. There is an realized on the markets of CIS countries, China, increased demand for vegetable oils. Also, oilcake is , and Iran. used in preparation of feed for livestock, which generally contributes to the realization of the Project goals: project. Compound annual growth rate (CAGR) of Completion of the plant construction in the industrial oilseed consumption is projected to be 1.95% by zone of Taldykorgan and further development of 2023. Global vegetable oil consumption reached 188 modern production of high-quality vegetable oils. million tonnes in 2018. Release and effective promotion of finished products Rich raw materials base. Accessible in the on the market, profit making. country raw materials base corresponds to the creation of highly efficient plants for the production Products and production capacity: of vegetable oils. Recently, there has been a trend • Hydrated vegetable oil (sunflower and rapeseed)– of intensive growth of sown oilseeds in Kazakhstan. 26.8 thousand tonnes; Sunflower dominates (36.9%, or 849 thousand • Oilcake (sunflower and rapeseed) – 35.8 thousand hectares) among other oil seed crops produced in tonnes. the country. In the structure of world production of Initiator: vegetable oils, rapeseed oil occupies the third position among all types of oil, with a share of «ZhetysuMazhiko» agricultural complex - project 15.0%. company specializing in the production of vegetable oils Project profitability

Key investment indicators 40.000 20% 35.000 Indicator Results 14% 30.000 12% 12% 12% Investment, USD thousands 12,304 25.000 11% 11%

Project NPV, USD thousands 10,268 20.000 10% 15.000 IRR, % 22.0%

US$ thous. US$ 10.000 EBITDA returns, % 12% 5.000 Payback period, number of years from the 24.109 24.959 26.459 28.138 33.389 36.195 start of production 5.8 0 0% Year 3 Year 5 Year 8 Year Year Year Discounted payback period, 11 20 24 number of years from the start of 8.2 production Revenue, US$ thous. EBITDA margin, % Location of the Project: Oil production diagram: 20B, Shevchenko St., Industrial zone, Taldykorgan, Seed cleaning Almaty Oblast, Kazakhstan. Storage, Air preparation of raw conditioning materials for oil by Nur-Sultan recovery humidity Recycling preparation Vegetable oils Taldykorgan production Cooking Press oilcake complex Processing of raw materials, Multi-step Press oil oil recovery pressing Commodity UV-hydration hydrated oil

KAZAKH INVEST: September 2019 Investment proposal Agricultural sector Construction of a soybean processing plant

Project description: Prerequisites for Project implementation Creation of a modern production complex for Export potential processing of self-grown soybeans. The current difficult trade relations between China Initiator: KEA LLP and the , a major supplier of soy and its derivatives to China, create a unique opportunity Targets: for Kazakhstan to occupy a certain share in this • Creation of an effective integrated Kazakhstan market. Also, the presence of the Kazakhstan port business for growing and supplying non-GMO soy in China and the remoteness of the main suppliers and its derivatives to the domestic and of soybean meal from it’s main importers create neighboring markets; favorable conditions for the development of export • Obtaining high-quality, export-oriented, of soybean meal. competitive products using advanced proven Potential for improved fertility technologies for production, supply and The soil and climatic conditions of northern distribution. Kazakhstan allow the cultivation of early and ultra- Processing method: Mechanical method ripening soybean varieties with a vegetation period (pressing). of 85 to 100 days. Commercial products: Soybean oil, soybean meal Own raw material base Production capacity: Processing 100 thousand The initiator's extensive own raw material base will tons of soybeans per year, reduce raw material costs. The presence of our own raw materials base will also allow us to directly control the stability of supplies and the quality of raw materials used in processing. Key investment indicators of the Project Project profitability

120.000 25% 26% Indicator Results 25% 23% 25% 100.000 25% Investment amount, thous. USD 32,620 25% 80.000 24% Project NPV, thous. USD 69,373 23% 60.000 24% 23% IRR, % 28.3% 40.000 US$ thous. US$ 23% EBITDA margin, % 23.8% 20.000 22% 56,964 60,755 74,603 85,067 103,751 Payback period, years 5.1 0 22% Year 3 Year 5 Year 10Year 15Year 24 Discounted payback period, years 6.4 Revenue, US$ thous. EBITDA margin, %

Project location: North-Kazakhstan Oblast, Production technology Akmola Oblast

Soybean Recycling cultivation preparation

Nur-Sultan Peeling / Extrusion Crushing

Pressing Post processing Almaty

KAZAKH INVEST: November 2019 8 Investment proposal Food industry

Construction of a plant for the production of non-alcoholic products, concentrates and puree

Project overview: Market assumptions This investment project provides for the Growing demand for non-alcoholic drinks construction of a plant for the production of non- According to Mordor Intelligence forecasts, there is alcoholic products in assortment, as well as the an increase in the total level of consumption of non- production of concentrates and purees from fresh alcoholic drinks in the world. Average annual growth fruits and berries according to the European rate (CAGR) for 2019-2024 will be equal to 4.7%. In standards BSI, DIN, EN and ISO EU. Kazakhstan, the average annual growth rate of Project location: consumption will be equal to 8.3%. Shymkent, Republic of Kazakhstan. Growing demand for fruit concentrate According to Mordor Intelligence forecasts, there is Project Initiator: an increase in the global consumption of nectar, ANM group LLP fruit and vegetable juices. Average annual growth Production technology: rate (CAGR) in 2019-2024 will be equal to 3.2%. The production of non-alcoholic drinks is planned to Import substitution be made using BRFC technology (Blowing Rinsing The volume of imports over the past 5 years equals Filing Capping). to 105.5 thousand tonnes, which is 3.5 times higher than in 2014, given that domestic production in the Maximum Project capacity: country is 1.6 times less than the consumption of • Bottled water – 80 mln bottles/year; non-alcoholic drinks. • Natural and juice drinks – 30 mln bottles/year; • Iced teas – 33 mln bottles/year; Project profitability for the production of non- • Iced coffee drinks – 11 mln cans/year; alcoholic products 120.000 21% • Carbonated soft drinks – 40 mln bottles/year; 21% 21% • Apple concentrate – 60,000 tonnes/year; 100.000 20% • Apple puree – 15,000 tonnes/year; 19% 20% 80.000 • Other fruits – 38,000 tonnes/year; 19% 18% 60.000 19% • Concentrate of berries – 25,000 tonnes/year. 18% 18% 18% 18% US$ US$ thous. 40.000 Commercial products: 18% Bottled drinking water, natural juices and juice 17%

drinks, iced teas and coffee drinks, carbonated soft 20.000 4.940 63.484 77.066 88.078 98.285 drinks. Concentrates and purees. 109.842 17% 0 16% Year 3 Year 5 Year 10 Year 15 Year 20 Year 24

Key investment indicators Revenue, US$ thous. EBITDA margin, % Project profitability for the production of Results: non- Results: concentrates and puree Indicator alcoholic concentrates 300.000 12% products and puree 10% 250.000 10% 8% Investment, US$ thousands 27,667 38,178 8% 200.000 7% 7% 8% 7% Project NPV, US$ 30,495 26,198 thousands 150.000 6%

IRR, % 28% 26% US$ thous. 100.000 4% EBITDA returns, % 18.1% 7.6%

50.000 12.550 2% Payback period, amount of years from the start of 6 7 161.269 195.770 223.745 249.672 279.032 production 0 0% Discounted payback period, Year 3 Year 5 Year 10Year 15Year 20Year 24 amount of years from the 7.8 9.2 start of production Revenue, US$ thous. EBITDA margin, %

KAZAKH INVEST: July 2019 Investment Proposal Agriculture-industrial complex

Construction of greenhouse in Pavlodar oblast

Project description: Market prerequisites Construction of a greenhouse complex for the Dependence of the country on imports of cultivation of tomatoes and cucumbers, domestic tomatoes and cucumbers - Due to the climatic and export sales of products for the purpose of features of most during the import substitution and development of the export potential of country’s vegetable production. off-season, there is a shortage of tomatoes and cucumbers. The deficit is covered by imports, which Initiator: amounted to 65 thousand tons of tomatoes and JSC "Social and Entrepreneurial Corporation" 14.5 thousand tons of cucumbers in 2018. Pavlodar " Price differential with Russian Federation - The Production volume: average price for tomatoes and cucumbers in the 3.7 thous. tons of tomatoes and 3.9 thous. tons of regions of the Russia bordering the country is higher cucumbers for one year than average price in Kazakhstan by 33% and 24%. Project parameters: Development of export supplies to foreign The total area of greenhouse – 8.4 ha; countries - Exports of tomatoes and cucumbers planting area – 7.9 ha from Kazakhstan are growing at a dynamic pace: in Products: 2018 exports of tomatoes amounted to tomatoes and cucumbers 20.7 thousand tons, cucumbers 6.1 tons. Location: Proximity to the Russia, a major importer of Pavlodar oblast, city of tomatoes and cucumbers, provides easy access to Target markets: Pavlodar oblast, northern regions the target market. In 2018 Russia imported of Kazakhstan, neighboring regions of Russia 578 thousand tons of tomatoes and 123 thousand tons of cucumbers. Key investment indicators Project profitability 55% 20.000 54% 60% Indicator Result 18.000 50% 16.000 Investment amount, $US thousands 21,891 33% 32% 34% 40% 14.000 12.000 30% Project NPV, $US thousands 12,769 10.000 20% IRR, % 15.7% 8.000 10% 6.000

US$ thousands US$ 0% EBITDA margin, % 43% 4.000 2.000 -10% 7.289 10.113 16.680 18.641 3.625 Payback period, years 8.0 0 -20% Year 2 Year 5 Year 15 Year 20 Year 24 Discounted payback period, years 14.5 Revenue, US$ thous. EBITDA margin, %

Location of project implementation: Technical process Pavlodar oblast Photo culture (electric illumination) • compensates lack of sunlight • improves yielding capacity and product quality

Greenhouse Nur-Sultan Climate control Climate seedling Almaty dropper Mineral cubes (for seedling)

Ventilation Ventilation circulation and Mineral wool (plate) Watering pipeline

KAZAKH INVEST: July 2019 10 Investment proposal Agriculture-industrial complex

Construction of greenhouse complex in North Kazakhstan oblast

Project description: Market prerequisites Construction of a greenhouse complex for year- Dependence of the country on imports - Due to round tomato and cucumber production and product the climatic features of most regions of RK during the sales on the domestic and foreign markets for the off-season there is a shortage of tomatoes and purpose of import substitution and development of cucumbers. The deficit is covered by imports, which the export potential of country’s vegetable production. amounted to 65 thousand tons of tomatoes and 14.5 thousand tons of cucumbers in 2018. Initiator: Price differential with Russia- The average price Rim-KazAgro LLP for tomatoes and cucumbers in the regions of the Products: Russia bordering the country is higher than average Tomatoes and cucumbers price in Kazakhstan by 33% and 24%. Production volume : Development of export supplies to foreign 1,200 tons of tomatoes and 1,300 tons of countries - Exports of vegetables from RK are cucumbers per year growing at a dynamic pace: in 2018 exports of Seeding: tomatoes amounted to 20.7 thous. tons (2.9 thous. Greenhouse area – 3 ha; planting area– 2 ha with in 2016), of cucumbers – 6.1 tons (2.5 thous. in following expansion up to 10 ha 2016). Target markets: Proximity to the Russia, a major importer of Petropavlovsk and border regions of Russia. tomatoes and cucumbers, provides easy access to Location: the target market. In 2018 Russia imported 578 thous. tons of tomatoes and 123 thous. tons of North Kazakhstan oblast, Petropavlovsk city, Yaroslav Gashek st., 3 cucumbers. Key investment indicators Project profitability 8.000 74% 72% 71% 72% Indicator Result 7.000 72% Investment amount, $US 6.000 70% 17,764 thousands 5.000 68% 67% 68% Project NPV, $US thousands 9,738 4.000 66% 3.000 IRR, % 15.4% 64%

US$ thousands US$ 2.000 62% 70% 1.000

EBITDA margin, % 4.210 5.842 6.518 7.285 4.038 0 60% Payback period, years 9.5 Year 4 Year 5 Year 15 Year 20 Year 24 Discounted payback period, 14.7 Revenue, US$ thous. EBITDA margin, % years Technical process Location of project implementation: Petropavlovsk city Photo culture (electric illumination) • compensates lack of sunlight Rim-KazAgro • improves yielding capacity and product quality greenhouse

Nur-Sultan Climate control Climate seedling

Almaty dropper Mineral cubes (for seedling)

Ventilation Ventilation circulation and Mineral wool (plate) Watering pipeline

KAZAKH INVEST: July 2019 11 Investment proposal Agriculture-industrial complex

Expansion of greenhouse up to 40 ha in Almaty oblast

Project description: Market prerequisites An increase in production capacity by expanding the Dependence of the country on imports of area of the greenhouse complex to 40 ha with an tomatoes and cucumbers - Due to the climatic annual production volume of 55.5 thousand tons of features of most regions of Kazakhstan during the tomatoes and cucumbers, domestic and export sales of products for the purpose of import substitution off-season, there is a shortage of tomatoes and and development of the export potential of country’s cucumbers. The deficit is covered by imports, which vegetable production. amounted to 65 thousand tons of tomatoes and Initiator: 14.5 thousand tons of cucumbers in 2018. Green Land Alatau LLP, an operating enterprise with Price differential with Russian Federation - The a 10 ha greenhouse average price for tomatoes and cucumbers in the Production volume: regions of the Russia bordering the country is higher than average price in Kazakhstan by 33% and 24%. 55.5 thousand tons of product Project parameters: Development of export supplies to foreign countries - Exports of tomatoes and cucumbers The total area of greenhouse – 40 ha from Kazakhstan are growing at a dynamic pace: in Products: 2018 exports of tomatoes amounted to tomatoes and cucumbers 20.7 thousand tons, cucumbers 6.1 tons. Location: Proximity to the Russia, a major importer of Almaty oblast, Kapshagay city, 65 km of Almaty – tomatoes and cucumbers, provides easy access to Ust-Kamenogorsk route the target market. In 2018 Russia imported Target markets: Almaty city, Almaty oblast, 578 thousand tons of tomatoes and export to Russia 123 thousand tons of cucumbers. Key investment indicators Project profitability 140.000 63% 70% Indicator Result 56% 56% 56% 56% 120.000 60% 43% Investment amount, $US thousands 118,442 100.000 50% 80.000 40% Project NPV, $US thousands 123,422 60.000 30% IRR, % 25.7% 40.000 20%

EBITDA margin, % 49.2% 13.268 US$ thousands US$ 20.000 10% 108.119 120.833 69.836 84.777 96.891

Payback period, years 5.3 0 0% Year 2Year 5 Year Year Year Year 10 15 20 24 Discounted payback period, years 7.2 Revenue, US$ thousands EBITDA margin, %

Location of project implementation: Technical process Almaty oblast, Kapshagay city Photo culture (electric illumination) • compensates lack of sunlight • improves yielding capacity and product quality

Nur-Sultan Climate control Climate seedling dropper Green Land Alatau LLP Mineral cubes (for seedling)

Ventilation Ventilation circulation and Mineral wool (plate) Watering pipeline

KAZAKH INVEST: September 2019 12 Investment proposal Agro-Industrial Complex Expansion of intensive apple orchards in the

Prerequisites for implementation of the About the Project Project Expansion of intensive apple orchards of the Stable demand for apples in the domestic operating company Fresh Land LLP to 105 hectares market in of Almaty region. Among stone fruits, apples are the most common Initiator: and significant food product. The beneficial Fresh Land LLP properties of apples and ease of consumption create Project location: a constant demand for the product. Overall, consumption of apples per capita increased by 8.1% Almaty region, Enbekshikazakh district since 2016 and amounted to 17.4 kg in 2018. Principal products: Export potential Fresh apples varieties: The neighborhood with the largest apple importer, • “Golden Delicious”; Russia, provides convenient access to a large target and large-scale sales market. In 2018, Russia “Red Delicious”; • imported 843.5 thousand tons of apples or 10% of • “Fuji”. the world import. Due to the political situation in the Project’s peak capacity: country, Russia broke off trade relations with and , major suppliers of apples to the 6,819 tons of apples per year Russian Federation, which also allows Kazakhstan to Fruit season: September – October take a certain share in the market of neighboring Sales markets: countries. The domestic market of the Republic of Kazakhstan Price differential with neighboring countries and the Russian Federation In the regions of the Russian Federation adjacent to Seedling Suppliers: Kazakhstan, a kilogram of apples on average during the year can be purchased for 1.3 - 2.0 US$, which Vivai Nischler D. Nischler Georg & Co. () is higher than the average Kazakhstan prices by Investment attractiveness of the Project 4% - 65%. Import dependence of Kazakhstan on apples Indicator Results during the off-season Investment amount, US$ thous. 6,814 Since the fruit is seasonal, and the shelf life of the product is short-lived, Kazakhstan experiences Project NPV, US$ thous. 7,291 import dependence in the periods from January to IRR, % 22.99% July. Due to the lack of fruit storages, after the end of its stocks, apple imports increase hundreds of EBITDA yield, % 58% times. Payback period, years 7.2 Project Profitability Discounted payback period, years 9.5 9.000 70% 80% 59% Project Location: Almaty oblast 8.000 70% 59% 59% 56% 7.000 60% 6.000 50% 5.000 39% 40% 4.000 30% 3.000 US$ thousand US$ 2.000 1.396 20% 1.000 10% 3.457 3.457 5.909 6.753 7.536 8.422 - 0% Fresh Land Year 3 Year 5 Year Year Year Year apple orchards 10 15 20 24 Revenue, US$ thous. EBITDA margin, %

KAZAKH INVEST: September 2019 13 Investment proposal Complex for the breeding and incubation of fish, the production of fish and related products Agro-Industrial Complex

Project overview: Market assumptions Organization of integrated farming for the breeding Growing demand for fish - According to the OECD and incubation of catfish and barramundi, the and FAO UN projections, there will be an increase in production of fish and related products. total fish consumption in the world. The average Project location: annual growth rate (CAGR) will be equal to 1.8% in Almaty Oblast, , Kaynar rural district, the years 2019-2025. So, if in 2018 fish consumption 25 km away from Almaty. per capita was equal to 20.3 kg per capita, by 2027 it Initiator: will reach the level of 21.3 kg per capita. Zor Fish LLP Import substitution - The share of imports in the Project’s peak capacity: structure of consumption of fish and fish products in 729 thousand units of canned catfish (Clarias the country equals to 74%, which indicates a high gariepinus), 900 tonnes of barramundi (Lates import dependence of the country. calcarifer), 600 thousand units of fry per year. Thus, in 2018, Kazakhstan imported 30 thousand Principal products: tonnes of frozen fish, which is 5 times higher than its Canned food, fish, fish products, chilled fish, fish own production. products and semi-finished products in the range. Export potential - Kazakhstan also provides Production process: biogenous fish products for export. In 2018, exports Fish farming, fish processing (production of canned of fish amounted to 12.5 thousand tonnes, showing food, fish products, semi-finished products, minced an increase of 64% compared with 2013. fish).

Key investment indicators Project profitability

Indicator Results

Investment, US$ thousands 18,716

Project NPV, US$ thousands 23,739

IRR, % 23.38%

EBITDA returns, % 61.8% Payback period, amount of years 5.87 from the start of production Discounted payback period, amount of years from the start of 8.04 production

Project location: Land Almaty Oblast Soil Type/Purpose Area, sq. m

Nur-Sultan Building developments 13,786

Covering 10,887

Planting 43,569 complex of Zor Fish LLP Almaty Ponds 12,737

Total 80,979

KAZAKH INVEST: July 2019 Investment Proposal Construction of a complex for breeding and incubating commercial sturgeon and beluga Agro-Industrial Complex

Project overview: Market assumptions Construction of a complex for breeding and Increase in demand for fish incubating commercial sturgeon and beluga According to OECD and FAO forecasts, we will face Project location: global increase in fish consumption in total. Atyrau Oblast, Atyrau, Ural river, Sadok channel Compound annual growth rate (CAGR) in 2019-2025 will be 1.8 percent. Thus, by 2027 fish consumption Initiator: will reach 21.3 kg per capita (2018: 20.3 kg per Caspian Eco-Tour LLP, specializing in the capita). development of freshwater aquaculture and eco- Import substitution tourism Currently, Kazakhstan imports 74% of fish and fish Products and capacities: products included in the consumption pattern. It Commercial fish (sturgeon and beluga) - 300.0 proves that the country is highly dependent on tonnes imports. For example, in 2018, Kazakhstan imported Food caviar - 2.0 tonnes 30 tonnes of frozen fish which is five times higher than domestic production capacities. Production process: Export development 1. Keeping and feeding in a closed water installation (spawning of females, fertilization, Kazakhstan also exports organic fish products. In sorting) 2018, due to commencement of high volume supplies to Russia, its major purchaser, Kazakhstan fish 2. Maintenance and feeding in cage (hibernation, export reached 12.5 thousand tones and saw 64% sorting, selling) increase versus 2013. As of 2017, over 25% of total exports have been delivered to China.

Key investment indicators Project profitability

Indicator Results

Investment, US$ thousands 10,982

Project NPV, US$ thousands 13,613

IRR, % 22.9%

EBITDA returns, % 52%

Payback period 6.7

Discounted payback period 9.1

Project location: The scheme of the typical construction of the Atyrau Oblast cage line

Fish stock Feed Harvestable Medicine Train fish fish

Nur-Sultan

Complex of Caspian Eco- Tour LLP

Almaty Plankton Waste Plankton Waste Plankton Waste Pond

KAZAKH INVEST: July 2019 Investment Proposal Rainbow Trout Production Complex

Agro-Industrial Complex

Project overview: Market assumptions Construction of a full cycle aquaculture complex. Growing demand for fish - According to the OECD The project envisages the creation of a modern and FAO UN projections, the world will see an production for the cultivation and processing of increase in total fish consumption. The average marketable fish of valuable species in closed water annual growth rate (CAGR) in the years 2019-2025 supply installations with subsequent sale in the domestic and foreign markets. will be 1.8%. So, if in 2018 fish consumption per capita was 20.3 kg per person, by 2027, Project location: consumption will reach 21.3 kg per person. Almaty Oblast, Karaoisky village, Ili district Import substitution - The share of imports in the Initiator: structure of consumption of fish and fish products in “Central Asia Beer (CAB)” LLP the country is 74%, which indicates a high import Project’s peak capacity: dependence of the country. Annual production of 6 thousand tons of a So, in 2018 Kazakhstan imported 30 thousand tons harvestable fish of frozen fish, which is 5 times higher than the Principal products: volume of its own production. Rainbow Trout Export potential - Kazakhstan also sends fish Production process: products of organic origin for export. In 2018, the Closed terrestrial aquaculture farm in closed water volume of fish exports amounted to 12.5 thousand installations tons, showing an increase of 64% compared with 2013. Key investment indicators This growth is explained by the beginning of large Indicator Results deliveries to Russia, which is a major buyer of Kazakhstani fish. Since 2017, over 25% of all Investment, US$ thousands 35,194 exports went to China. Project NPV, US$ thousands 29,567 High-value species of fish. Trout is a delicacy valued for its digestive and dietary qualities. It is IRR, % 20.4% used in cooking across the world thanks to its health EBITDA returns, % 46% properties and small size (300-600 g). Payback period, amount of years Absence of industrial catches. In Kazakhstan, 9.1 from the start of production trout is bred in small quantities in cool mountain Discounted payback period, lakes in the east and south of the country, which amount of years from the start of 12.6 prevents it from being caught for industrial production purposes.

Project location: Project profitability Almaty Oblast 40,000 65% 70%

45% 35,000 60% 45% 30,000 48% 45% 50% 25,000 Nur-Sultan 40% 20,000 30% 15,000 US$ thousands US$ 20% 10,000 complex of CAB LLP 10% Almaty 5,000 10,152 10,152 22,578 30,204 33,618 35,963 - 0% Year 3 Year 5 Year Year Year 15 20 24

Revenue, US$ thous. EBITDA margin, % KAZAKH INVEST: July 2019 Investment Proposal Agricultural sector Construction of an automatic fish farm for the production of sturgeon caviar

Project description: Prerequisites for Project implementation Construction of an automatic fish farm using Growing demand for fish and sturgeon caviar. recirculating water system (RWS) with an annual According to forecasts by the OECD and UN FAO, there output of 5,200 kg of sturgeon caviar. will be an increase in the total level of fish Project location: consumption in the world. Average annual growth rate Akmola Oblast, , (CAGR) in 2019-2025 will be 1.8%. Thus, whilst in Koyandinsky rural district, Koyandy village. 2018 fish consumption per capita amounted to 20.3 kg The land plot (5 ha) was provided by the Akimat to per person, by 2027 consumption will reach the level the initiator for use free of charge. of 21.3 kg per person. According to forecasts, the Project initiator: Aqua Factoria LLP global caviar market will also grow with a significant Product and output: CAGR of 7% for 2015-2025. It is estimated that by 2025 the caviar market will be valued at US$ 560.6 Black sturgeon caviar – 5.2 tonnes/year million. Fish (freshly frozen and smoked) – 10.3 tonnes/year Lack of competition in the region. At present, in Production process: the (specifically, in the vicinity of the Maintenance and feeding in RWS city of Nur-Sultan) there is no production of sturgeon • Transferring female fish into spawning mode caviar. This fact suggests the existence of an • Fertilization unrealized potential to create a strategically profitable production of sturgeon caviar near the capital of the • Sorting-out Republic of Kazakhstan - a large metropolis with a wealthier population.

Key investment indicators of the Project

Indicator Results Project profitability Investment amount, thous. 10.000 78% 79% 79% 78% 77% 90% 6,513 79% USD 80% 8.000 70% Project NPV, thous. USD 19,856 60% 6.000 50% IRR, % 36.47% 4.000 40% 30% EBITDA margin, % 76% 2.000 20% 4.204 4.832 5.316 6.083 7.322 7.922 10% 0 0% Payback period, years 4.46 Year 4 Year 6 Year 8 Year Year Year Discounted payback period, 5.34 11 20 24 years Revenue, US$ thous. EBITDA margin, % Scheme of a typical design of an RWS Sewer drain

Hydrocyclone Drum Fish tanks (optional) microfilter Aqua Factoria LLP PLant Nur-Sultan

Compressed Blower Bio filter air

Oxygenator Pump group Pump pit Almaty

Fresh water Oxygen supplementation generator Ozonation unit

KAZAKH INVEST: September 2019 Investment proposal KAZAKİSTAN CUMHURİYETİ ANKARA BÜYÜKELÇİLİĞİ

Mining and Metallurgy Mining and smelting industry

Extraction and processing of gold-bearing ores at Shoyimbai deposit

Project overview: Market assumptions: Extraction and processing of gold-bearing ores at the Shoyimbai deposit (the “Project”) Availability of supply sources – gold consumption Commercial product: Gravity concentrate, later in Kazakhstan is mainly created as a result of gold supplied to the smelting and refining factories of the processing done by three refineries: Kazzink in Ust- country. Kamenogorsk, Kazakhmys in Balkhash and Tau-Ken- Altyn in Nur-Sultan. Currently, all of the produced Output capacity: processing over 130 thousand refined gold is used for the purpose of replenishing tonnes of gold-bearing ores per year the country's currency reserves. According to Project implementation period: 12 years experts, by 2020, refining volumes in Kazakhstan Initiator: will reach up to 80-90 tons. CaspianGeoConsultingServices LLP, a subsidiary of Import substitution – Domestic production KM GOLD JSC, carries out exploration of precious facilities cannot meet the demand for gold. Despite metals and their extraction. The company plans to the decline in imports during the period from 2013 build its own modular processing plant. to 2017, in 2018, 210 thousand tons of metal were imported. Project implementation location: Karagandy region Stable high demand – Gold is in stable demand in the world. It is used in technology in the form of Potential markets: Kazakhstan alloys with other metals, in the aviation and space industry, in radio equipment, electronics, medicine, as well as for manufacturing jewelry. It also plays the role of the main currency metal.

Key investment indicators Project profitability 12.000 100% Index Results 90% Project implementation period, years 12 10.000 80% 85,8% incl. investment stage, years 3 8.000 70% 60% 42,3% operational stage, years 10 42,9% 42,2% 42,1% 6.000 43,1% 50% 41,9% Investment amount, US$ thousands 11 000 40% 4.000 30% Project NPV, US$ thousands 6 139 2.000 20% 10.218 IRR, % 36,7% 5.999 8.010 8.192 8.373 8.950 9.384 10% 0 0% EBITDA margin, % 47% Year Year Year Year Year Year Year Payback period, years 4,7 3 4 5 6 7 10 12 Discounted payback period, years 5,6 Revenue, KUSD EBITDA margin, %

Project location: Shoyimbay field reserves Karagandy region Reserves

С1 C2 P1 P2 426 kg 3,42 t 30 t 109 t Gold Nur-Sultan (14 g/t) (6 g/t) (2,5 g/t) (2,5 g/t)

Processing volumes Shoyimbai deposit Phase 1 Phase 2

Almaty Processing 30 000 kg 1 166 667 kg volumes

Gold content 14,09 g/t 2,50 g/t

KAZAKH INVEST: July 2019 19 Investment Proposal Mining and smelting industry

Development of Nurbay, Besshocky and Sarybulak copper ore deposits

Project Description: Market conditions: Construction of industrial complex for copper ore Availability of raw materials and subsoil use extraction at the Nurbay, Basskocky and Sarybulak rights. The forecasted reserves of the complex of deposits in East Kazakhstan oblast and copper Nurbay-Basskocky-Sarybulak deposits amount to cathode production in the amount of 12,500 tonnes over 280 thous. tonnes of copper. per year High demand. It is expected that the steady growth in demand for refined copper will continue in Product: Copper cathode subsequent years, since copper is the most Capacity: Processing of 1 million tons of copper important resource and factor of production in a oxide ore per year. Further expansion is possible for modern technological society. Annual growth in the processing of sulphide ores. demand for refined copper is projected at 2% in 2019 and 1.5% in 2020. Production volumes: Expected production of Price stabilization. According to analysts at 12,500 tons of cathode copper per year. Bloomberg, a moderate increase in refined copper Initiator: Ertis-Med’ LLP. prices is expected in the medium term, with Location: , East-Kazakhstan Oblast. subsequent stabilization of the price level: 2019 - $6,038.5; 2021 - $6,011; 2023 - $6,087 per tonne. Potential markets: non-ferrous metal processing Export potential. The shortage of this product plants in CIS, China and Europe. indicates the potential for import substitution. Also RK has an opportunity to increase exports to the PRC and other countries.

Key investment indicators of the Project Project profitability

Indicator Results 100,000 51.0% 90,000 50.8% 50.8% Project implementation period, years 9 50.5% 80,000 50.8% 50.6% incl. investment stage, years 2 70,000 50.9%

operational stage, years 7 60,000 50.2% 50.4% 50.4% Investment amount, US$ thousands 43,845 50,000 50.2% 50.0% 40,000 50.0% Project NPV, US$ thousands 54,884 US$ thous. 30,000

19,125 49.8% IRR, % 40.1% 20,000 EBITDA margin, % 51% 10,000 49.6% 57,375 79,875 83,546 87,635 91,507 94,921 Payback period, years 4.5 0 49.4% Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

Discounted payback period, years 5.2 Revenue, US$ thous. EBITDA margin, %

Project location: Deposit reserves Ayagoz district, East-Kazakhstan Oblast Indicators Unit meas. Reserves (Presumably according to Nurbay intelligence data from 1962) Copper (С2) ‘000 tonnes 180.00 Incl. ‘000 tonnes 30.00 oxidized Nur-Sultan (According to the evaluation Basskocky work) Copper (Р1) ‘000 tonnes 20.00 Nurbay, Besshoky and Sarybulak (oxidized) deposits Sarybulak (According to intelligence) Copper ‘000 tonnes 75.00 Incl. С2 ‘000 tonnes 15.00 (oxidized) Almaty Incl. Р1 ‘000 tonnes 60.00 (oxidized)

KAZAKH INVEST: June 2019. 20 Investment proposal Mining and metallurgical complex

Construction of a mining and metallurgical complex on Besshoky Square in the region

Project overview: Project implementation assumptions: This investment project (hereinafter referred to as Large reserves of copper. Kazakhstan takes the the “Project”) provides for the construction of a 8th place in the world in copper reserves with a mining and metallurgical complex at the Besshoky share of 4.7% of world reserves (37 million tons). field. High demand. Copper plays a significant role in Project goals: development of a group of deposits modern infrastructure, generation and transmission on Besshoky Square, creation of an effective of electricity, in the production of industrial integrated business for the extraction and equipment and electrical appliances. According to processing of copper-molybdenum ore. the forecasts of the International Copper Study Group, the annual growth in demand for refined Initiator: Ulmus Fund B.V. copper will be 2% in 2019 and 1.5% in 2020. Production process: open pit mining; ore Price stabilization. According to Bloomberg, the processing at the processing plant and production price of refined copper is expected to increase with of copper-molybdenum concentrate; processing of its subsequent stabilization in the medium term: concentrate at a smelter to produce copper and 2019 - 6038.5 USD, 2023 – 6087 USD per ton. molybdenum. Molybdenum price increase. Despite a significant Products: copper and molybdenum drop in molybdenum prices from 2013 (24,889 USD) Production capacity: to 2015 (11,625 USD), according to the London Metal Exchange (LME) index, the price of 10 mln tons of ore per year molybdenum began to rise steadily to 24.9 thousand USD in 2018 (CAGR for 2015-2018 - 29%).

Key investment indicators Project profitability

450.000 30% 26% 27% Indicator Results 24% 400.000 23% 22% 22% 22% 25% Amount of investments, US$ 210,000 350.000 thousands 300.000 20% Project NPV, US$ thousands 116,747 250.000 15% 200.000 IRR, % 21.2% 150.000 10%

US$ US$ thousands 100.000 EBITDA margin, % 14-28% 5%

50.000 250.927 256.640 262.302 280.365 315.445 353.314 396.460 Payback period, years 8.5 0 0% Year 5 Year 6 Year 7 Year Year Year Year 10 15 20 25 Discounted payback period, years 11.7 Revenue, US$ thousands EBITDA margin, %

Project location: Besshoky square, Field reserves by JORC (2012) Karagandy oblast Ore, mln Copper, ths Field Cu, % tons tons

East Besshoky

Measured 9.64 74.58 0.77 Nur-Sultan Indicated 19.09 116.93 0.61

Besshoky South Besshoky square Measured 44.36 164.52 0.37

Indicated 147.32 527.03 0.36

Shymkent Kaindyshoky Almaty Measured - - -

Indicated 37.87 143.52 0.38

KAZAKH INVEST: October 2019 21 Investment proposal Mining industry

Commercial development of the Zhaissan copper deposit

Project overview: Project implementation assumptions: This investment project (“Project”) provides for the High demand. A stable increase in demand for the commercial development of the Zhaissan deposit in refined copper is expected over the next years. Zhambyl Oblast, involving copper mining and Copper plays a significant role in infrastructure, processing. generation and transmission of electricity, transport, Products: Cathode copper, pelleted silver. communications, in the production of industrial Manufacturing process: equipment and electrical appliances. Demand for the Mining – underground method; refined copper is forecasted to increase annually by Processing – mined oxidized ores are going to be 2% and 1.5% in 2019 and 2020, respectively. transported by road to the heap leaching site of the Price stabilization. World prices for the refined Shatyrkul mine. Sulphide ores are going to be copper currently show a moderate upward trend. transported by truck to the station Berlik-1, then by According to Bloomberg, a moderate rise in prices rail to the Balkhash beneficiation plant (BOF). The for the refined copper with the subsequent price copper concentrate obtained at the BOF will be stabilization is expected in the medium term: 2019 processed at the Balkhash Metallurgical Plant. − US$ 6,038.5, 2020 − US$ 5,961, 2021 − US$ Initiator: Zhanashyr Project LLP, subsidiary 6,011, 2022 − US$ 6,054.5, 2023 − US$ 6,087 per organization Kazakhmys Corporation LLP. tonne. Project location: Zhambyl Oblast, . World silver production. In recent 5 years, Kazakhstan was among the world’s ten largest silver Annual production capacity : producers; Kazakhstan is the third largest country 600 thousand tonnes of ore. by world silver reserves, according to the USGS geological survey.

Key investment indicators Deposit reserves

Index Results Index Unit Reserves

Investment, US$ thousands 118,436 Zhaissan On-balance reserves

Project NPV, US$ thousands 111,287 thousands of Copper (С1) 205.6 tons IRR, % 27.4% thousands of Copper (С2) 96.1 EBITDA return, % 60% tons Molybdenum tons 908 Payback period, years 10.2 (С1) Discounted payback period, 11.4 Silver (С2) tons 35.2 years Project location: Shu district, Zhambyl Oblast Project profitability 140.000 64% 63% 60% 59% 63% 63% 63% 60% 120.000 63% 62% 100.000

129.810 61%

Nur-Sultan 124.805 80.000 123.149 60% 107.039 105.239

BOF 103.335 60.000 101.209 59% 40.000

US$ thousands US$ 58% 20.000 57% Zhaissan deposit Almaty 0 56% Year Year Year Year Year Year Year 9 10 11 12 22 23 26 Revenue, US$ thousands EBITDA margin, %

KAZAKH INVEST: August 2019 22 Investment proposal Mining and smelting industry

Construction of a mining and processing complex and industrial development of Aidarly copper deposit

Project description: Project implementation assumptions: This investment project (“Project”) provides for the High demand. A stable increase in demand for the construction of mining and processing complex at refined copper is expected over the next years. the Aidarly deposit in the East Kazakhstan Oblast. Copper plays a significant role in infrastructure, Product: Cathode copper, copper concentrate. generation and transmission of electricity, transport, Objective of the project: development of the communications, in the production of industrial Kazakhmys Corporation resource base, creation of equipment and electrical appliances. Demand for the an effective integrated business for the extraction refined copper is forecasted to increase annually by and processing of copper ore and the sale of 2% and 1.5% in 2019 and 2020, respectively. cathode copper in the domestic market and abroad. Price stabilization. World prices for the refined Manufacturing process: mining – open-pit copper currently show a moderate upward trend. method. Oxide ores processing (stage1) –processing According to Bloomberg, a moderate rise in prices of oxide ores will occur at a heap leaching plant with for the refined copper with the subsequent price the production of cathode copper. stabilization is expected in the medium term: 2019 Sulphide ores processing (stages 2 and 3) – − US$ 6,038.5, 2020 − US$ 5,961, 2021 − US$ processing of sulphide ores will occur at a 6,011, 2022 − US$ 6,054.5, 2023 − US$ 6,087 per processing plant with the production of copper tonne. concentrate. Import substitution and local production Initiator: Aidarly Project LLP, subsidiary growth. While the dynamics of the trade balance organization Kazakhmys Corporation LLP. shows a surplus in the category "refined copper and Annual production capacity: crude copper alloys", the opposite situation is Processing of 1.3 mln tonnes of ores (stage 1), 20 observed for the category of goods with a greater mln tonnes (stage 2), 50 mln tonnes (stage 3). depth of processing as "plates, sheets and stripes or Key investment indicators strips of copper".

Index Results Deposit reserves, thousand tonnes Investment, US$ thousands 1,474,770 On-balance reserves in the pit contour Index Oxide ores Sulphide ores

Project NPV, US$ thousands 104,605 С1 В С1 С2 Reserves MIRR, % 8.2% Ore 5,878 317,849 1,205,889

EBITDA return, % 29% Copper 20.5 1,220/0 4,630

Molybdenum, tonnes 154,278 Payback period, years 18.3 Gold, kg 14,141 Discounted payback period, 21.0 years Silver, tonnes 2,170.4 Project location: Ayagoz district, East- Project profitability Kazakhstan Oblast 3.000.000 33% 33% 35% 29% 29% 30% 2.500.000 25% 22% 25% 2.000.000 Nur-Sultan 20%

1.500.000 2.607.567 Aidarly deposit 15% 1.000.000 2.062.816 2.015.037 10% 509.712 1.833.020 US$ thousands US$

500.000 1.593.175 5%

0 0% Almaty Year Year Year Year Year Year 16 26 36 37 47 48

Revenue, US$ thousands EBITDA margin, % KAZAKH INVEST: August 2019. 23 Investment proposal Mining and smelting industry

Extraction and processing of nickel-cobalt ore deposit Bogetkol

Project Description Market prerequisites: This investment project provides for the extraction Rising prices for nickel and cobalt. According to and processing of nickel-cobalt ores from the forecasts by Bloomberg analysts, the average nickel Bugetkol deposit in the Aktobe region (the price in 2019 will increase by 27% and amount to “Project”). US$ 13,550 per ton, and for the period 2019 – 2022, Project goals: the average annual price will increase yearly by 9% • Development of the resource base of Sary Arka and rise to US$ 15,900 per ton by 2027. Mining Company LLP, creation of an effective Export potential. The country's domestic demand integrated business for the extraction and for cobalt and nickel is low, so it is possible to cover processing of cobalt/nickel ores and the sale of it with excess. nickel-cobalt ore reserves in final products in the domestic market and Kazakhstan allow the export of this mineral in abroad; significant quantities to China, , Russia, • obtaining high-quality, export-oriented, and Ukraine. China is the main importer of competitive products through rational and nickel, nickel concentrates, cobalt ores and cobalt effective field development using advanced proven technologies. concentrates. In-situ recovery (ISR) method of mining with Project Initiator sulphurous acid leaching: The extracted Mining company "Sary Arka" LLP productive solution (which contain nickel and cobalt Production ores) then goes to the processing plant. Received • Nickel concentrate; productive solution further goes through the • Cobalt concentrate. following stages: Annual production capacity: • Nickel/cobalt extraction from pregnant solutions Nickel – from 4,508 to 9,125 tons, Cobalt – from by ion exchange; 281 to 580 tons. • Eluate neutralization; Key Investment indicators • Nickel/cobalt sulphate purification and recovery; Indicators Results • Tailings neutralisation, storage and evaporation.

Investment amount, thous. USD 574,743 Project Profitability 72% 72% 57% 250.000 70% 68% 80% Project NPV, thous. USD 384,347 70% 52% 200.000 60% 50% IRR, % 35.5% 150.000 40%

222.558 -15% 30%

EBITDA margin, % 58-61% 192.735 100.000 189.879 20% 181.417 10% US$ US$ thousand

50.000 145.419 0% Payback period, years 4.2 22.082

98.615 -10% 0 -20% Discounted payback period, years 4.9 Year 2 Year 3 Year 4 Year 5 Year Year Year 26 27 28 Project location: Aytekebi district, Aktobe region Revenue, US$ thousand EBITDA margin, % Field Reserves Co, mln Ni, thous. Category %Ni %Co thous. Nur-Sultan tones tones tones Bugetkol Inside Tenement field Indicated 36.01 0.68 0.037 243,366 13,221 Inferred 1.76 0.68 0.039 11,986 682 Outside Tenement Indicated 1.11 0.71 0.041 7,855 454 Almaty Inferred 0.39 0.55 0.045 2,140 173 Total Indicated 37.12 0.68 0.037 251,221 13,675

Inferred 2.15 0.66 0.040 14,126 855 KAZAKH INVEST: October 2019 24 Investment proposal Mining and metallurgical complex

Industrial development of non-ferrous and precious metal deposits in the East Kazakhstan Oblast

Project overview: Project implementation assumptions: Investment project (the “Project”) provides for High copper demand. A stable increase in demand industrial development for the extraction and for the refined copper is expected over the next processing of non-ferrous and precious metal ores years as copper is the major resource and industrial at the Belousovsky deposit in the East Kazakhstan driver in the modern technological society. Demand Oblast. for refined copper is forecasted to increase annually Products: Cathode copper, silver pellets, gold bars, by 2% and 1.5% in 2019 and 2020, respectively. zinc in zinc concentrate. Stable gold demand. Gold consumption in Production process: Kazakhstan is mainly created as a result of gold 1) Mining – underground; processing done by three refineries: Kazzink in Ust- Kamenogorsk, Kazakhmys in Balkhash and Tau-Ken- 2) Ore beneficiation is planned at the Nikolayevsky Altyn in Nur-Sultan. Currently, all of the produced plant, owned by Kazakhmys; refined gold is used for the purpose of replenishing 3) Refining of copper, gold and silver concentrates the country's currency reserves. According to (obtaining a final product) will be carried out by the experts, by 2020, refining volumes in Kazakhstan Balkhash smelting plant owned by Kazakhmys. will reach up to 80-90 tons. Initiator: Kazakhmys Barlau LLP. World silver production. Kazakhstan is one of the Project location: East Kazakhstan Oblast, largest silver producers. In recent 5 years, Glubokovsky district, Belousovka village. Kazakhstan was among the world’s ten largest silver Annual production capacity: producers. Kazakhstan ranks third by world silver 250 thousand tonnes of ore. reserves, according to the USGS geological survey.

Key investment indicators Deposit reserves, thousand tonnes

On-balance reserves by category Indicator Results Ore/metal А В С1 А+В+С1 С2 Amount of investments, US$ 13,378 thousands Ore 15 951.3 3,498.3 4,464.6 8,027

Project NPV, US$ thousands 30,009 Copper 0.5 16.9 26.2 43.6 33.1

Lead 0.1 19.3 31.3 50.7 64.2 IRR, % 42.2% Zinc 0.8 65.1 136.5 202.4 287.7 EBITDA margin, % 28% Ore - - 1,398.6 1,398.6 11,102.0 Payback period, years 3.8 Gold, kg - - 1,679.4 1 679.4 4,605.0 Discounted payback period, 4.4 years Silver, tons - - 55.9 55.9 555.1 Project location: East Kazakhstan Oblast, Project profitability Glubokovsky district 45.000 29% 40.000 Nikolayevsky 29% beneficiation 35.000

plant 30.000 42.142 28% Nur-Sultan 25.000 38.687 36.053 35.645 35.166 28% Belousovsky deposit 20.000 33.930

15.000 28,30% 27%

Balkhash (copper) 28,43%

10.000 27,98% smelting plant 27,87% 27% 5.000 27,05% 0 26,92% 26% Almaty Year 3 Year 4 Year 5 Year 6 Year 9 Year Revenue, US$ thous. 13 EBITDA margin, %

KAZAKH INVEST: September 2019 25 Investment proposal Mining and smelting industry

Development of Kulan-Ketpes fluorite ore deposits

Project description: Market conditions: R The Project involves development of fluorite ore ich resource base deposits and ore enrichment plant construction at The Kulanketpes ore field with a balance of Kulan-Ketpes ore field fluorite reserves of 2,931 thousand tons is one of the largest deposits in Kazakhstan. Product: Pricing advantage • fluorspar (acid and ceramic grades containing The favorable location of production plant near to its 75%, 90%, 95%, 97% CaF2); main consumers and tariffs imposed by the Eurasian Economic Union on fluorspar imports (9-10%) • manganese concentrate (37% content). provide substantial geographical pricing advantage Initiator: on the Russian fluorspar market. Muyunkum-Mineral LLP Growing demand and production volume contraction Location: Due to increasing operational and transport costs, a Muyunkum district, principal Russian fluorspar manufacturer halted fluorspar production. Potential markets: Low production cost large-scale manufacturers in chemical, steel, High processability of the Kulan-Ketpes ore and nuclear, and aluminium industries of CIS countries homogeneity of its mineral content allow to configure an economical technological process with minimal manufacturing and operational costs while adhering to the highest international products quality standards.

Key financial measures Project Profitability

Measure Value Project’s life, years 24 incl. development period, years 3 operational period, years 21 Investment amount, USD thousands 68,157 Project’s NPV, USD thousands 16,499 IRR, % 21.0% EBITDA margin, % 26% Payback period, years 8.5 Discounted payback period, years 11.5 Project location: Muyunkum district, Jambyl Deposit reserves, category C1+C2 Region

Ore, Fluospar, Content, Measure thous. thous. % tons tons Nur-Sultan

Vein deposits 5,764 1,667 28.92%

Kulan-Ketpes ore field Stratified deposits 5,946 1,264 21.26% Almaty

Total 11,710 2,931 25.02%

KAZAKH INVEST: July 2019 26 Investment proposal Metallurgy and mechanic engineering

Expansion of production capacity of a ferroalloy plant in Karaganda

Description of the Project: Market assumptions: This investment project provides for the expansion Growth in demand for ferrosilicon. According to of the production capacity of a ferroalloy plant in the the AlloyConsult analytical agency, global demand city of Karaganda. for (CAGR 2.7% from 2014 to 2028) ferrosilicon will reach 9.5 million tonnes by 2026. Production and annual capacity: Persistent steel demand. High rates of historical Ferrosilicon – 240 thousand tonnes per year. production growth and the strategic importance of Project goals: the further development of industries, which use steel as raw materials, create a steady demand for • Expanding the production capacity of the existing the products manufactured under the Project. ferroalloy plant from 192,000 tonnes to 240,000 According to the forecasts of the International Steel tonnes of products per year; Association, the global demand for steel and steel products will increase by 1.4% in 2019. According to • Obtaining high-quality, export-oriented, Lucintel forecasts, steel demand is projected to competitive products using advanced proven grow. Compound annual growth rate (CAGR) will be production technologies; 1.6% in the period from 2019 to 2024, and revenue • Meeting local and global demand for ferrosilicon will be about 68.4 billion US dollars, which will also through the production and subsequent sale of contribute to the rise of ferrosilicon demand. products in the markets of Kazakhstan, Europe, Provision of raw materials. The company Southeast Asia, North and South America. concluded long-term contracts for the main raw Initiator: material base for the production of ferrosilicon, fixing prices for a long-term period, which, in turn, YDD CORPORATION, LLP helps to maintain low production costs. Sales market: Kazakhstan, China, Russia, USA, EU.

Key investment indicators: Project profitability Indicator Results 400.000 70% 58% 55% 350.000 54% 60% Investment, USD thousands 116,828 51% 300.000 50% Project NPV, USD thousands 509,427 250.000 40% 200.000 9% 7% IRR, % 121.7% 30% 150.000 EBITDA returns, % 37% 100.000 20% US$ thous. US$ 10%

Payback period, number of years from the 50.000 238.840 247.263 257.471 272.882 330.778 358.573 2.0 start of production 0 0% Discounted payback period, Year 3Year 5Year 7 Year Year Year number of years from the start of 2.1 10 20 24 production Revenue, US$ thous. EBITDA margin, % Location of the Project: Technological process of the Project: Karaganda,

1st stage – Dosing 4th stage - Alloy of raw materials release

Nur-Sultan 2nd stage – Ferrosilicon Loading charging 5th stage - Casting production plant Karaganda material into furnace bins

6th stage - Almaty 3rd stage – Alloy Crushing and smelting fractionation of the alloy

KAZAKH INVEST: September 2019 Investment proposal Metallurgy and mechanic engineering

Construction of a ferroalloy plant in

Description of the Project Market assumptions: This investment Project provides for the construction Growth in demand for ferrosilicon. According to of a ferroalloy plant in Kyzylorda the AlloyConsult analytical agency, global demand for (CAGR 2.7% from 2014 to 2028) ferrosilicon will Production and annual capacity reach 9.5 million tonnes by 2026. • Shop 1 - 42,000 tonnes of ferrosilicon per year; Persistent steel demand. High rates of historical Shop 2 - 120,000 tonnes of ferrosilicon per year. • production growth and the strategic importance of Project goals the further development of industries, which use • Low aluminum ferrosilicon production; steel as raw materials, create a steady demand for Obtaining high-quality, export-oriented, the products manufactured under the Project. • According to the forecasts of the International Steel competitive products using advanced proven Association, the global demand for steel and steel production technologies; products will increase by 1.4% in 2019. According to • Meeting local and global demand for ferrosilicon Lucintel forecasts, steel demand is projected to through the production and subsequent sale of grow. Compound annual growth rate (CAGR) will be products in the markets of Kazakhstan, Europe, 1.6% in the period from 2019 to 2024, and revenue Southeast Asia, North and South America. will be about 68.4 billion US dollars, which will also contribute to the rise of ferrosilicon demand. Initiator: Provision of raw materials. The company National Center on Complex Processing of Mineral concluded long-term contracts for the main raw Raw Materials of the Republic of Kazakhstan, «RSE material base for the production of ferrosilicon, NCCPMRM» fixing prices for a long-term period, which, in turn, helps to maintain low production costs. Key investment indicators Project profitability Indicator Results 300.000 60% 52% 52% 52%52% 52% Investment, USD thousands 242,264 250.000 46% 50% Project NPV, USD thousands 277,539 200.000 40% IRR, % 29.2% 150.000 30% EBITDA returns, % 52% 100.000 20% US$ thous. US$

Payback period, number of years 42.973 6.1 from the start of production 50.000 10% 189.662 189.662 197.492 209.313 253.722 275.042 0 0% Discounted payback period, Year 3 Year 5 Year 7 Year Year Year number of years from the start of 7.6 10 20 24 production Revenue, US$ thous. Location of the Project: EBITDA margin, % Site of the Industrial Zone, Kyzylorda, Kyzylorda Technological process: Oblast, Republic of Kazakhstan 1st stage – Dosing 4th stage - Alloy of raw materials release

Nur-Sultan 2nd stage – Loading charging 5th stage - Casting material into Ferrosilicon Plant furnace bins

6th stage - Almaty 3rd stage – Alloy Crushing and smelting fractionation of the alloy

KAZAKH INVEST: September 2019 Investment proposal Metallurgy and mechanic engineering

Organization of the production of ferrosilicon aluminum in Pavlodar oblast

Description of the Project : Market background: The investment project provides for the construction Growth in demand for steel. According to the of a plant for the production of ferrosilicon aluminum forecasts of the International Steel Association, the in Ekibastuz. global demand for steel and steel products will increase by 1.4% in 2019. Lucintel expects steel Production and annual capacity : demand to grow. Compound annual growth rate Ferrosilicon aluminum labeled as FS45А10 till (CAGR) will be 1.6% in the period from 2019 to FS65А20 – 60 thousand tons per year. 2024. Raw materials: Low competition. The demand for FSA among steel producers is significant. Competition is made Carbonaceous rock, quartzite, coal only by producers of ferrosilicon. However, the superiority of the FSA over the analogue will cover a Initiator: significant share of domestic and foreign markets. Vtormet Asia LLP Increased production, export and domestic Location: consumption of ferrosilicon. Ferrosilicon Ekibastuz, Pavlodar region aluminum surpasses and replaces the traditional deoxidizers - ferrosilicon and aluminum, reducing Sales market: domestic market, China, Russia. the percentage of defective products and reducing the amount of sulfur, fluorine and other non-metallic parts. The growth of production by 8.8%, exports by 4.3% and consumption by 12.6% in 2017-2018 show growing demand for ferrosilicon and, accordingly, for PSA also as an analog product.

Key investment indicators: Project profitability

120.000 44% Indicator Results 42% 43% 43% Investment, USD thousands 70,000 100.000 41% 42% 80.000 41% Project NPV, USD thousands 86,388 41%

IRR, % 29.5% 60.000 39% 40% 38% 39% EBITDA returns, % 38-43% 40.000

US$ US$ thousands 38% 17.574 Payback period, number of years from the 20.000 6.4 37% 72.774 86.826 96.296 start of production 105.248 114.091 Discounted payback period, 0 36% number of years from the start of 7.9 Year 3 Year 5 Year 10 Year 15 Year 20 Year 24 production Revenue, US$ thousands EBITDA margin, % Location of the Project: Ferrosilicon aluminum and its analogues: Ekibastuz, Pavlodar oblast Pavlodar oblast FSA55А20 FeSi65 Al or Ferrosilicon Ferrosilicon Aluminum aluminum Ekibastuz

Steelmaking Ferrosilicon is used as a deoxidizing agent for steel. FSA surpasses and replaces traditional deoxidizers - ferrosilicon and aluminum

KAZAKH INVEST: September 2019 29 Investment proposal Mining and metallurgical complex

Construction of a metallurgical complex for the production of pig iron in Mangystau Oblast

Project overview: Project implementation assumptions: The project involves construction of a complex for Deficiency of ferrous scrap. In Kazakhstan, there the production of pig iron, with ROMELT technology. is currently a shortage of ferrous scrap caused by its Iron ore mining and crushing will be carried out at export ban. Since the ban in 2014, the volume of the Beskempir deposit. The processing complex with domestic consumption of ferrous scrap has the ROMELT technology, to which iron ores are decreased by 50-60% compared with 2011. going to be transported after crushing, will be Rich resource base. The Beskempir deposit, located on the SEZ "Seaport ". located in the Mangistau Oblast in the central part of the Karatau ridge, is the largest iron ore deposit, the Product: Intermediate pig iron reserves of which are approved under the State Reserves Committee of the Republic of Kazakhstan Production process: in category C2, amounted to 13,812 thousand tons. Mining – open-pit; Iron ore is characterized by a high iron content and Processing – ROMELT, liquid phase recovery with the absence of impurities. Also, the Mangistau oblast energetic coals. is rich in natural gas reserves. Initiator: Technogran Aktobe LLC. Production technology. ROMELT technology for Location: , Mangystau Oblast. ore processing is based on direct iron reduction technology without an enrichment stage, which has Consumer market : China. a number of economic advantages in the production Annual production capacity: of pig iron. 240 thousand tonnes of pig iron.

Key investment indicators Deposit reserves and its provision

Provisio Reserves, Content, Fe, Site Indicator Results n, years thousand tonnes % Amount of investments, US$ 172,340 thousands On-balance 23 13,811.64 43.88 Project NPV, US$ thousands 152,771 reserves, C2 North 5,760.19 40.39 IRR, % 27.4% Central 1 5,608.23 46.67 EBITDA margin, % 51% Central 2 1,424.06 46.89 Payback period, years 5.7 Central 3 1,019.15 44.12

Discounted payback period, Off-balance 7.2 22 13,696.26 40.19 years reserves Total 45 27,507.9 42.04

Project location: Mangystau district, Project profitability Mangystau Oblast 140.000 52% 51% 53% 52% 120.000 51% 49% 51% 51% 52% 100.000 51% 51% 51% Nur-Sultan 80.000 130.177

119.075 50%

60.000 108.495 99.281 105.145 97.866 50% 102.110 Metallurgical complex 40.000 49% 49% 20.000 48% US$ thousands US$ 0 48% Beskempir Year Year Year Year Year Year Year deposit Almaty 3 4 5 6 7 17 24 Revenue, US$ thousands EBITDA margin, % KAZAKH INVEST: July 2019 г. 30 Investment proposal Metallurgy and mechanical engineering

Launch of long products manufacturing at Aktau Foundry in Aktau city

Project description: Market background: This investment project provides for the launch of Growth in consumer demand for long products. production of long products at the Aktau Foundry, According to Metal Expert forecasts, in the non- carried out as part of a comprehensive residential construction sector, the main drivers of reengineering program. demand will be actively initiated government programs and measures to stimulate industrial Production capacity: production and investment. In the conservative 180,000 tones/year scenario, demand is expected to grow by 3-5%. Project objectives: Import substitution. Growth in consumer demand •Creation of an efficient integrated business for long has sharpened competition between domestic product production and its sale on domestic and producers and suppliers from the Russian foreign markets; Federation. Also, in Kazakhstan there are no enterprises producing a full range of long products. Obtaining high quality, competitive products using • Export Development. Over the past five years, advanced approved production technologies Kazakhstan mainly exported rebars (among long corresponding to the world class level of the long products). In the structure of exports, the share of products manufacturing. Tajikistan in the total volume of exports of rebars is Products: rebar, I-beam, structural channel, angle. 73% (86,663 tons); Russian Federation and Initiators: ALZ LLP and BCC Invest. account for 11% (13,217 tons) and 10% (12,031 tons), respectively.

Key investment indicators Project profitability

30% Indicator Results 250.000 25% 26% 22% Investment amount, US$ thousands 79,348 200.000 15% 11% 12% 13% 20% Project NPV, US$ thousands 59,687 150.000

IRR, % 15.9% 100.000 10% EBITDA margin, % 19% 50.000 134.421 140.554 146.270 151.734 198.625 240.821 247.970 US$ thousands US$ Payback period, years 9.7 0 0% Year Year Year Year Year Year Year 4 5 6 7 15 23 24 Discounted payback period, years 16,4 Revenue, US$ thousands EBITDA margin, % Technological process: Project loaction: Furnace-charge preparation Mangystau oblast, Aktau, Industrial area Furnace-charge loading into the furnace Steel desulfurization Nur-Sultan Steel deoxidation Drainage of steel into the Aktau Foundry intermediate ladle Steel casting into CCM(a) mold

Pulling the ingots with the dummy bar Almaty Workpiece cooling

Final product

KAZAKH INVEST: September 2019 Investment proposal Metallurgy and mechanic engineering

Expansion of the production of steel pipes in the Mangistau Oblast

Description of the Project: Market background: The investment project provides for the construction Growth in demand for steel pipes. Lucintel of a plant for the production of oil and gas predicts that there will be an increase in global equipment in the SEZ “Seaport Aktau” of the demand for steel pipes in the world. Compound annual growth rate (CAGR) in 2019-2024 will be Mangistau Oblast. equal to 1.6%, and revenue will be equal to about Production and annual capacity: US$ 68.4 billion. The main drivers of this market are • Tubing pipes – 78.3 thousand tonnes per year; the construction of new pipelines, the replacement of obsolete pipelines, the level of urbanization and • Casing – 66.7 thousand tonnes per year; the development of infrastructure. • Line pipe – 5089 tonnes per year. Import substitution. Import volumes over the past year equal to 210.8 thousand tonnes, which is Raw materials: twice as high than in 2015, given that the country’s High alloy steel domestic production rate is 2.4 times lower than the use of tubing, casing and line pipes. The expansion Initiator: of the steel pipe plant will reduce the dependence on The initiator of the project is Kaskor-Mashzavod JSC, imports. which is one of the leading machine-building Export development. Kazakhstan also exports enterprises in the Republic of Kazakhstan. steel pipes. In 2018, the volume of export of tubing Location: SEZ “Seaport Aktau” - subzone 3, the pipes, casing and line pipes amounted to 149.4 Mangistau Oblast thousand tonnes, demonstrating an increase of 57% compared to 2014. Sales market: domestic market, China, Russia, Turkmenistan

Project profitability 350.000 43% 43% 43% 50% Key investment indicators 42%41% 41% 300.000 Indicator Results 40% 250.000 Investment, USD thousands 245,923 200.000 30% Project NPV, USD thousands 257,581 150.000 20% IRR, % 25.5% 100.000

US$ thous. US$ 10% EBITDA returns, % 42% 50.000 133.570 133.570 151.774 215.511 228.411 276.871 300.137 Payback period, number of years from the 0 0% start of production 6.8 Year 3 Year 5 Year 7 Year Year Year Discounted payback period, 10 20 24 number of years from the start of 8.4 Revenue, US$ thous. EBITDA margin, % production Location of the Project: Technological process of the Project: Aktau, Mangistau Oblast Stitching mill with barrel rolls Ring furnace

Cold cutting Nur-Sultan saws Steel pipe Press Rack mill Work shears Rolling mill production brake complex

Extractor Almaty Saws

Refrigerator Reduction stretch Heating Cut saws mill furnace KAZAKH INVEST: August 2019 Investment proposal Mining and metallurgical complex

Construction of a mining and processing plant for the production of manganese concentrate

Description of the Project Market conditions: The present investment project (the “Project”) High demand. Manganese in ferromanganese provides for the construction of a mining and alloys is used to “deoxidize” steel during its melting processing complex for the production of (to remove oxygen from it). The high growth of manganese concentrate at the Karamola deposit in steel production in the world and the strategic importance of the further development of industries the Almaty region. using steel as raw materials create a steady demand Product: manganese concentrate. for the products manufactured under the Project. Aims of the Project: Creation of an innovative According to the forecasts of the International Steel mining and metallurgical complex for the production Association, the global demand for steel and steel of manganese concentrate in the Almaty region. products will increase by 1.4% in 2019. According to Manufacturing process: The developed Lucintel forecasts, the average annual growth rate (CAGR) for steel pipes will be 1.6% in 2019-2024. technological enrichment scheme includes two-stage crushing of the initial ore to a fineness of 40 mm, Export potential. China is the world's largest followed by wet screening into fineness classes of importer of manganese concentrate (27 656 thousand tons in 2018). Russia is the fourth largest 40-5 mm, 5-125 mm and 1.25-0.0 mm. importer of manganese concentrate (1318 thousand Initiator: Tentek LLP. tons in 2018). Over the past 5 years, the growth Production volumes: rates of imported manganese concentrate by China ore - 49.6 thousand tons per year, and Russia amounted to 14.3 and 6.6%, concentrate - 19.2 thousand tons per year. respectively.

Deposit reserves Key investment indicators of the Project Currently, one area has been explored with estimated reserves of 1.5 - 2.0 million tons of Indicator Results manganese ores, including the estimated and approved GKZ RK C1 - 233.4 thousand tons (Mn Investment amount, US$ 10,114 22.65%), C2 - 215, 0 thousand tons (Mn 22.53%). thous. The reserves of the deposit are estimated at more Project NPV, US$ thous. 5,651 than 16 million tons of manganese and 80 million tons of ore. The manganese content in ores varies IRR, % 24.04% from 12-14% to 38-46%, with a phosphorus content of up to 0.1%. Estimated reserves in general for 23 EBITDA yield, % 75.2% ore sites (including the Karamola deposit) of the Payback period, years 6.48 Karamola area are estimated at 250 million tons. Discounted payback period, 8.22 years

Project location: Alakol district, Almaty Oblast Project profitability 77% 8.000 77% 77% 76% 78% 7.000 76% 73% 6.000 74% 5.000 72% Nur-Sultan 4.000 68% 70% 3.000 68% Karamola deposit tous. US$ 2.000 66% 1.000 64% 2,669 4,266 6,851 6,978 7,104 7,242 0 62% Almaty Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

Revenue, US$ thous. EBITDA margin, %

KAZAKH INVEST: October 2019. 33 Investment proposal Mining and metallurgical complex

Construction of a complex for the production of barite concentrate in Mangystau Oblast

Project description: Project implementation assumptions: The project involves construction of a complex for Existence of a rich resource base. the extraction of barite-celestine ores and their The Aurtas deposit, located in Mangistau Oblast, is processing into barite concentrate for use as the largest barite ore deposit with a balance stock of weighting agents for drilling muds. The mining of 3.5 million tons of ore. Additionally, ore reserves barite-celestine ores and their processing will be may increase during additional geological carried out at the North Aurtas deposit. exploration of the area during mining operations. Product: Barite-celestine based weighting agent Advantageous location. The geographical proximity of the Aurtas deposit to («BCWA»), carbonate based weighting agent the oil and gas fields of western Kazakhstan and to («CWA»). the Caspian Sea and the ports of Aktau and Kuryk Reserves (Category C1): provides a favorable logistic advantage in the delivery of final products to both domestic and 3,579 thousand tons foreign consumers. Initiator: Development of the oil and gas industry of Chemicals trading LLC. Kazakhstan. Location: The last four years, the volume of purchases of the entire oil and gas market in Kazakhstan has Mangystau district, Mangystau Oblast increased by an average of 20% per year. The total Annual production capacity: amount of oil services purchased in 2018 amounted to US$ 8.26 billion, which is 15.5% more than in 200 thousand tons of ore per year; 2017 (US$ 7.15 billion). • BCWA - 186 thousand tons; Lack of competition in foreign markets and • CWA - 14 thousand tons. export potential. Key investment indicators According to the analysis of competitors in foreign markets in Turkmenistan, Russia, and , the extraction and processing of barite Indicator Results is insufficient or completely absent to meet domestic Amount of investments, US$ demand. 14,123 thousands

Project NPV, US$ thousands 14,999

IRR, % 32.5%

EBITDA margin, % 34-41%

Payback period, years 5.0

Discounted payback period, 6.1 years Project location: Mangystau district, Project profitability Mangystau Oblast

Nur-Sultan

Aurtas deposit Almaty Shymkent

KAZAKH INVEST: July 2019 34 Investment proposal Metallurgy and mechanic engineering

Construction of coal-preparation plant in Karaganda

Description of the Project Market assumptions This investment Project provides for the construction The presence of stable demand and offtake of a coal-preparation plant in Karaganda contract Production and annual capacity The main assumption for the construction of the enrichment plant is the need for raw materials for • Coal coke – 260,000 tonnes/year; the plant for the production of ferrosilicon in • Metallurgical products – 28,000 tonnes/year; Karaganda ("YDD Corporation"). A 10-year contract • Fraction D - 0 mm - 3 mm – 134,000 was concluded with YDD Corporation for the supply tonnes/year; of 285 thousand tonnes of coal concentrate (51% of • Fraction D - 3 mm - 18 mm – 286,000 the total production). Also, 25% of the coal tonnes/year; concentrate will be used for the production of semi- • Fraction D - 18 mm - 50 mm – 140,000 coke, and the remaining volume will be exported. tonnes/year. Stable growth in demand for ferroalloys Project goals The annual increase in consumption of ferroalloys is estimated at 500 thousand tonnes. According to expansion of production capacities of the existing • Market Research Future analysis, the global coal-preparation plant and additional output of ferroalloy market in the forecast period from 2019 finished products in the amount of 560 thousand to 2025 will grow with an average annual growth tonnes per year; rate (CAGR) of 5.6%. • obtaining high-quality, export-oriented, Rich raw material base competitive products, as well as expanding its Kazakhstan is one of the ten countries with the assortment, using advanced proven production largest coal reserves (estimated 25 billion tonnes). technologies Over 100 million tonnes of coal are mined annually • providing the raw material base for the existing in the country. ferroalloy plant. Project profitability Initiator: QazCarbon LLP 120.000 20% 100.000 Key investment indicators 13% Indicator Results 80.000 11% 9% 60.000 7% 6% 10% Investment, USD thousands 25,660 7% Project NPV, USD thousands 20,693 40.000 IRR, % 18.39%

US$ thous. US$ 20.000 108.205 108.205 EBITDA returns, % 7.5% 66.867 70.104 73.282 78.328 98.709 0 0% Payback period, number of years from 2.09 Year 3 Year 5 Year 7 Year Year Year the start of production 10 20 24 Discounted payback period, Revenue, US$ thous. number of years from the start of 2.15 EBITDA margin, % production Technological process of the Project: Location of the Project: Reception coal Octyaberskaya Industrial Zone, Karaganda, preparation Removal of water Karaganda Oblast, Kazakhstan • Coal intake • Unloading railway • Drainage wagons • Centrifugation • Filtration • Drying Nur-Sultan Preparatory processes Crushing and grinding Coal-preparation • • Sorting of raw plant materials by size • Screen separation Caking • Screening

Gravitational Almaty preparation Warehousing and • Dense separation Shipment

KAZAKH INVEST: September 2019 Investment proposal KAZAKİSTAN CUMHURİYETİ ANKARA BÜYÜKELÇİLİĞİ

Chemical and Petrochemical Industry Agro-industrial complex Construction of a plant for the production of biological products according to the GMP standard

Project description: Construction of a Prerequisites for Project implementation biopharmaceutical plant for the production of Lack of production in accordance with GMP biological products according to the GMP (Good standards Manufacturing Practice) standard with a capacity of 15 million doses per year. As of today, there are no production of biological products that meets international GMP standards in Project goals: Construction of the first biopharmaceutical plant in Kazakhstan in accordance Kazakhstan. Compliance with GMP standards will with the international GMP standard. provide laboratory comprehensive verification and regulation of production parameters, the quality of all Project initiator: Republican State Enterprise "Research Institute for Biological Safety Problems“. products, and reduce the risk of manufacturing errors Product and output: to a minimum. The growth of cattle, small cattle and poultry • Smallpox vaccine – 3,750 thousand doses; Currently, Kazakhstan has seen an increase in the • Avian influenza vaccine – 2,250 thousand doses; number of cattle, small cattle and birds. For example, • Cattle Nodular Dermatitis Vaccine – 3,000 in 2018, the increase in the number of cattle was 6%, thousand doses; small cattle - 2% and birds - 11%. For this reason, the need for veterinary drugs for the prevention and Cattle Plague Vaccine – 2,250 thousand doses; • treatment of animals is increasing. • Small Cattle Ecthyma Vaccine – 1 500 thousand Import substitution doses; The share of imports in the structure of consumption • Animal Brucellosis Vaccine – 2,250 thousand of veterinary drugs in the country is 78%, which doses. indicates a high import dependence. In 2018, imports to the country amounted to 246 tons of veterinary drugs, of which 200 tons were imported from Russia. Key investment indicators of the Project Project profitability 14.000 70% 59% 59% 59% Indicator Results 56% 56% 56% 58% 12.000 60% Investment amount, thous. 10,171 USD 10.000 50% 8.000 40%

Project NPV, thous. USD 8,603 11.595 11.261 6.000 10.845 30% 9.081 IRR, % 22.4% 4.000 20% 7.429 7.095 6.840 2.000 10% EBITDA margin, % 57% US$ thousand US$ 0 0% Payback period, years 8.2 Year Year Year Year Year Year Year 6 7 8 14 22 23 24 Discounted payback period, 11.2 years Revenue, US$ thousand EBITDA margin, % Project location: Biological product manufacturing technology Almaty Oblast, Zhambyl disctrict, urban-type settlement Gvardeyski. The accumulation of Preliminary Virus virus-containing cleaning inactivation suspension (clarification)

Nur-Sultan

Vaccine Concentration and The manufacture RSE«RIBSP» formulation Cleaning of the vaccine (target product) Almaty Shymkent

KAZAKH INVEST: September 2019 Investment proposal Chemistry and petrochemistry

Construction of a plant for the production of household chemicals in Almaty

Project overview: Market assumptions: This investment project provides for the Growing demand – The average annual growth construction of a plant for the production of rates for certain products of this industry range from household chemicals with a capacity of 18,500 3% to 8% per year. The market was thousand liters per year (the “Project”). estimated at $ 27.4 bln in 2017 and, according to forecasts by Allied Market Research, it will reach Initiator: “Aurora Holding” Group of Companies US$ 40.5 bln by 2025. The global market of hair Commercial products: care products was estimated by Mordor Intelligence • ; at US$ 91.95 bln in 2017 and is expected to reach US$ 112.57 bln by 2023. • Glass spray; Availability of customer base – • Cleaning product for kitchen; The company has a large customer base: its main • Cleaning products for plumbing; customers are large retail chains, supermarkets, • Cosmetics; grocery stores, hotel complexes and educational • Detergents for clothes and textiles. institutions. Output capacity: Import substitution - According to the comments 18 500 thousand liters/year of representatives of "Aurora Holding", the market of household chemicals of the Republic of Kazakhstan Project location: Industrial zone, Alatau district, depends on import for 95%. For this reason, the Almaty city dynamics of price increases in this industry can vary from 7% to 14% per year.

Key investment data Project profitability 23% 90.000 25% Index Results 17% 17% 17% 80.000 16% 20% 70.000 15% Investment, US$ thousands 23,479 60.000 10% 50.000 5% Project NPV, US$ thousands 13,946 40.000 0% IRR, % 20.6% 30.000 -5%

US$ thousands US$ 20.000 -10% 10.000 -15% EBITDA returns, % 18% 46.819 64.957 72.484 81.008 0 8.242 -20% Payback period, years 7.2 Year 2 Year 5 Year 15 Year 20 Year 24

Revenue, US$ thous. EBITDA margin, % Discounted payback period, years 11.5

Project location: Commercial products Industrial zone, Alatau district, Almaty city Volumes at full Product name capacity, thous. liters Dishwashing liquid 7,806 Nur- Glass spray 1,498 Sultan Kitchen cleaning products 1,000

Cleaning products for plumbing 3,758 Production plant Cosmetics 3,886 Almaty Detergents for linen and textiles 556

Total 18,500 KAZAKH INVEST: July 2019 38 Investment proposal Chemistry and petrochemistry

Construction of a new complex for the production of nitrogen mineral fertilizers in Aktau

Project overview: Market assumptions: Construction of a new complex for the production of Growing demand for fertilizers class 2 ammonia, on the territory of the existing According to the report of Grand View Research Inc. ammonia and ammonium nitrate production plant it is expected that by 2025 the world demand for in Aktau, Republic of Kazakhstan. fertilizers will reach US$ 178.26 billion (CAGR Commercial products and annual output: 3.4%). Import substitution 300 thousand tonnes of liquid class 2 ammonia per year. Kazakhstan is import-dependent on ammonia, the annual import of which amounted to 20-30 thousand Initiator: tonnes. Imported ammonia is used by agricultural The Project is initiated by KazAzot JSC (“Initiator”), enterprises as a nitrogen fertilizer. an industrial enterprise in Mangystau Oblast, the Raw materials availability only country producer of ammonium nitrate and A new complex for the processing of natural gas into ammonia. nitrogen mineral fertilizers will be built in close Project location: Mangystau Oblast, Aktau. proximity to the current plant of KazAzot JSC. Consumer markets: domestic market, Ukraine, as Export potential well as possible supplies to China, Turkey, Russia By increasing the production of ammonia, and Europe. Kazakhstan can increase its share of exports to Turkey, China, Russia, as well as to Europe, which are one of the main consumers of ammonia on the world market.

Key investment indicators Project profitability

Indicator Results 250.000 65% 64% 64% 64% Investment, US$ thousands 344,571 200.000 64% 63% 63% Project NPV, US$ thousands 79,986 150.000 62% 62% IRR, % 14.0% 61% 100.000 61% EBITDA returns, % 63% 50.000 60% US$ thousands US$

Payback period, amount of years from 118.609 134.070 146.074 167.614 187.439 203.222 9.7 the start of production 0 59% YearГод 5 YearГод 8 YearГод 10ГодYear 1515YearГод 20ГодYear 2323 Discounted payback period, amount of 20.1 years from the start of production Выручка,Revenue, US$тыс. thousandsдолл. США РентабельностьEBITDA margin, %по EBITDA, % Project location: Mangystau Oblast, Aktau Technological flows during Project implementation period

Natural gas Ammonia

Nur-Sultan Desulfurization Ammonia synthesis

Mineral fertilizer complex Reforming Methanation

CО conversion CO2 removal Almaty

KAZAKH INVEST: July 2019 39 Investment Proposal Chemistry and petrochemistry

Construction of a complex for the production of caustic soda, hydrochloric acid and coagulants in the territory of the SEZ "NIPT"

Project overview: Market assumptions: Construction of a chemical complex for the Growing demand for caustic soda production of caustic soda, hydrochloric acid and According to forecasts of the analytical agency coagulants using specialized technologies in the Grand View Research, by 2024 the volume of the territory of the SEZ “NIPT” in the Atyrau Oblast. world market of caustic soda will exceed US$ 46 Commercial products and annual output: billion. Growing demand for hydrochloric acid and • Sodium hydroxide 48%: 30 thousand tonnes per coagulants year; Demand for hydrochloric acid and coagulants, • Calcium hypochlorite: 16.5 thousand tonnes per according to Grand View Research, the global year; market will exceed US$ 160 million (CAGR 5.8%) • Ferric chloride 40%: 5 thousand tonnes per year; and US$ 2.63 billion dollars (CAGR 2.4%), respectively. • Hydrochloric acid 35%: 8.5 thousand tonnes per Raw materials availability year; The main raw material for the production of caustic • PAC-17 (aluminum oxychloride): 2 thousand soda is plain salt, the supplier of which will be TUZ tonnes per year. LLP. Salt supplies will be 27 thousand tonnes per Initiator: year for a period of operation of 20 years. Also, an important raw material for the production of soda is Global Chemical LLP technical water, the supplier of which will be the Project location: SEZ "NIPT", Atyrau Oblast Association “Su Arnasy Kazakhstan”. Consumer markets: Domestic market, China, Russia Key investment indicators Project profitability

Indicator Results

Investment, US$ thousands 70,000

Project NPV, US$ thousands 55,646

IRR, % 22.2%

EBITDA returns, % 49%

Payback period, amount of years from 6.1 the start of production

Discounted payback period, amount of 8.8 years from the start of production

Project location: SEZ "NIPT", Atyrau Oblast Technological flows during Project implementation period

Technological process of Chlorine Salt production

• Sodium hydroxide Gas chemical Nur-Sultan complex • Hydrochloric acid 35% Chlorine • Ferric chloride 40% • Oxlichloride aluminum 17%

• Calcium Hypochlorite

Almaty

KAZAKH INVEST: July 2019 40 Investment Proposal Chemistry and petrochemistry

Construction of a gas-chemical complex for the production of methanol in the

Project overview: Market assumptions: Construction of a gas-chemical complex for the Growing demand – According to a report by production of methanol in the West Kazakhstan Market Research Future® (WantStats Research And region Media Pvt. Ltd.), the global methanol market is Raw materials: expected to reach $ 61 billion by 2023. Methanol is widely used as an alternative fuel in internal natural gas (potential supplier – “Zhaikmunai” LLP) combustion engines due to its efficiency and cost- Commercial products: effectiveness. AA grade methanol Output capacity: Import substitution – Kazakhstan is 100% import Production of 350,000 metric tons of dependent on methanol, the annual consumption of methanol/year; which is at least 25 thousand tons. Imported Consumption of 306,000 thous. normal cubic meters methanol is used by gas industry enterprises as a of natural gas/year. method to combat the formation of hydrates. The Project initiator: need to import methanol (raw materials) at high prices determines the price non-competitiveness of Limited Liability Partnership “Zhaik Petroleum Ltd” Kazakhstan's final products and enterprises. Project location: country district Beles, Zelenovsky district, West Kazakhstan region. Availability of customer base – The largest Consumer markets : , , potential consumers can be large oil-extracting and Kazakhstan. oil refineries of Kazakhstan, importing gas chemical elements for the production of drilling fluids, Investment attractiveness of the Project coagulants and inhibitors.

Indicator Results Raw materials availability – The plant will be Investment, US$ thousands 166,100 built in the West Kazakhstan region, bordering the Aktobe and Atyrau regions, the country's oil and gas Project NPV, US$ thousands 127,522 centers. In the region itself there is the Karachaganak oil and gas condensate field, with IRR, % 22.4% reserves of 1.35 trillion cubic meters of gas and 1.2 billion tons of oil and gas condensate. EBITDA returns, % 43%

Payback period, years 6.3

Discounted payback period, years 9.3 Project profitability

Project Location: 200,000 48% country district Beles, Zelenovsky district, 180,000 46% West Kazakhstan region 43% 44% 44% 160,000 43% 44% Karachaganak field 140,000 42% 120,000 Nur-Sultan 40% 100,000 38% Production field 80,000 35% 36% US$ thousands US$ 60,000 40,000 34% 20,000 32% Алматы 128,199 127,031 159,693 178,864 196,071 0,000 30% Year 3 Year 5 Year 15Year 20Year 24 Revenue, US$ thous. EBITDA margin, %

KAZAKH INVEST: June 2019 41 Investment Proposal Chemistry and petrochemistry

Construction of a gas chemical complex for the production of methanol and olefins in Aktau

Project overview: Market assumptions: Construction of a gas chemical complex for Growing demand for methanol and olefins processing natural gas and methanol using According to a report by Market Research Future® specialized technologies, where gas is primarily (WantStats Research And Media Pvt. Ltd.), the processed into methanol, and methanol, global methanol market is expected to reach US$ 61 subsequently, processed into olefins. billion by 2023. Global imports of propylene are growing at an average rate of 2.2% per year, while Commercial products and annual output: ethylene imports are growing at an average rate of • AA class methanol: 1,800 thousand tonnes per 4.2% per year. year; Import substitution • Olefins: 600 thousand tonnes per year Over the past five years, Kazakhstan imported about (propylene - 360 thousand tonnes, ethylene - 24 thousand tonnes of methanol per year, despite 240 thousand tonnes). the fact that import volumes grow by an average of 14% per year. Production of domestic products will Initiator: reduce the volume of gas and chemical imports. WestGasOil LTD, an industrial enterprise in the Export potential West Kazakhstan Oblast, which is engaged in large- Besides sales, products will also be exported. The scale gas chemical projects. external market is attractive for sales due to the Project location: Mangystau Oblast, Aktau growing demand and availability of cheap raw Consumer markets: domestic market, Europe, materials, which opens up significant prospects for Russia. the organization of export of the Project’s products.

Key investment indicators Project profitability

Indicator Results

Investment, US$ thousands 1,800,000

Project NPV, US$ thousands 1,068,605

IRR, % 21.2%

EBITDA returns, % 63%

Payback period, amount of years from 6.9 the start of production

Discounted payback period, amount of 9.7 years from the start of production

Project location: Mangystau Oblast, Aktau Technological flows during Project implementation period - GTM technology Natural gas (gas to methanol)

- MTO technology Synthesis (methanol to olefins) Nur-Sultan

Methanol Methanol to olefins Gas chemical production complex

Ethylene Propylene Almaty

KAZAKH INVEST: July 2019 42 Investment Proposal Chemistry and petrochemistry

Construction of a plant for the production of base oil components in the West Kazakhstan Oblast

Project overview: Market assumptions: Construction of a plant for the production of base oil Growing demand components from natural gas According to the report provided by Grand View Raw materials: Research Inc., base oil consumption reached 33 natural gas - 1.0 bln normal cubic meters per year million tonnes in 2016, the world market of base Commercial products and output capacity: oils is expected to reach US$ 40.47 bln by 2024. The growing demand for base oils is a key driver • 280 thousand tons of base oil components (paraffin) per year; increasing the demand for the products to be manufactured by the Project. • 110 thousand tons of diesel and gasoline fractions per year; Availability of customer base • 10 thousand tons of liquefied petroleum gas per China-based Shanxi Lu’an Group (minority year. shareholder of Cathay Biotech) is a holder of the Initiator: Company group “Condensate” patent for the gas chemical technology to produce base oil components. The major portion of the base Project location: Aksai city, WKO. oil components will be delivered to Shanxi Lu’an Consumer markets: Kazakhstan, China, EU Group’s plant located south of Shanghai, and partly Tax payments during the operation of the to the EU countries. Gasoline and diesel fractions Project (2022-2042): can be consumed by the Condensate Group in their CIT – US$ 618 millions; production cycle. Other taxes, fees and contributions – Raw materials availability US$ 66 millions; Obligatory pension contributions - US$ 34 millions. Reserves of the Karachaganak oil and gas condensate field amount to 1.35 trillion cubic Key investment data meters of gas and 1.2 billion tons of oil and gas condensate. The resources of this field in the Index Results amount of 8.5 billion cubic meters per year are processed at the Orenburg Gas Processing Plant, Investment, US$ thousands 820,744 and WKO consumers have a priority right to Project NPV (in Scenario 2 with price of purchase natural gas from these resources. natural gas 60 US$/thous. m3), US$ 266,538 Export potential thousands The major portion of the products will be exported IRR, % 17.01% to China or the EU countries for further processing into finished products. The remaining by-products EBITDA returns, % 58-63% will be sold domestically in Kazakhstan. Payback period, years 8.2

Discounted payback period, years 13.8

Project location: Project profitability Production site Sulusay, Aksai city, West 450.000 60% Kazakhstan Oblast 400.000 50% 350.000 43% Production plant 38% 300.000 34% 40% Nur-Sultan 250.000 30% 200.000 23% 297.488

US$ US$ thousands 150.000 20%

100.000 10% 10% 50.000 287.054 345.490 356.999 416.862 Almaty - 0% Shymkent Year 4 Year 5 Year 12 Year 14 Year 24

Revenue, US$ thousands Net income margin, %

KAZAKH INVEST: July 2019 Investment Proposal Chemistry and petrochemistry

Construction of a plant for the assembly and production of non-electric initiation systems and emulsion explosives

Project overview: Market assumptions: This investment project provides for the Growing demand for explosives The total market construction of a plant for the assembly and for explosives in Kazakhstan is estimated at US$ production of non-electric initiation systems and a 150 million per year. The total consumption of mobile plant for the production of emulsion explosives equals to about 300,000 tonnes per year. explosives (“Project”). Along with the development of new fields, consumption is expected to grow by 7-10% This project is considered as innovative, since there annually. is a construction of the first plant in Kazakhstan for Import substitution Today in Kazakhstan there is the full-cycle production of NEIS. no production of NEIS. All components used in the Commercial products and annual output: production of NEIS are manufactured abroad. In Kazakhstan there are only assembly shops of NEIS. • emulsion explosives (“EE”): 24 thousand tonnes The launch of the plant for the production of NEIS per year; will help reduce import dependence on other • non-electric initiation systems (“NEIS”): 50 countries. According to the results of 2018, the million units per year. import of NEIS in Kazakhstan amounted to 1,635 tonnes in the amount of about US$ 18 million. Initiator: Exporting potential Production of explosives and Nitro-Kazakhstan LLP NEIS in the Karaganda Oblast will allow covering the Project location: Karaganda Oblast, Satpayev country's MMC market, as well as exporting products while increasing volumes to Turkey, Consumer markets: Russia, Uzbekistan and Kyrgyzstan. domestic market, Russia and Uzbekistan.

Key investment indicators Project profitability 160.000 70% Indicator Results 64% 140.000 63% 63% Investment, US$ thousands 47,669 120.000 62% 60% 100.000 Project NPV, US$ thousands 238,209 54% 80.000 72.94% IRR, % 60.000 US$ thous. US$ 50% EBITDA returns, % 62.4% 40.000 20.000 104.162 104.162 117.208 149.667 Payback period, amount of years from 34.413 88.284 3.93 the start of production 0 40% Discounted payback period, amount of 2021 2024 2028 2032 2042 4.22 years from the start of production Revenue, US$ thous. EBITDA margin, %

Project location: Karaganda Oblast, Satpayev Products and services provided within the framework of the Project:

Types of NEIS: • Single layer NEIS; • Two-layer NEIS; • Two-layer NEIS reinforced with industrial thread. Nur-Sultan

NEIS plant Types of EE: • NPGM-100 Type A (for overburden and non- sulphide ores); • NPGM-100 Type B (for sulphide ores).

Almaty Other services: Blasting and drilling operations

KAZAKH INVEST: July 2019 Investment Proposal Chemistry and petrochemistry

Construction of a chemical complex for the production of sodium cyanide

Project overview: Market assumptions: This investment project provides for the Growing demand construction of a complex for the production of According to the Statistics Committee of the sodium cyanide up to 30 thousand tonnes per year. Republic of Kazakhstan, over the past ten years, Commercial products: gold production in Kazakhstan has increased by almost 70%. Accordingly, manufacturers' demand Sodium cyanide for sodium cyanide has increased. Raw materials: Import substitution Ammonia, methane, caustic soda and air In 2018, imports of sodium cyanide to the republic Technology: amounted to 24,456 US$ thousands (14 thousand tons). The growth in imports was due Direct production method (more efficient method to an increase in gold mining and production in the without the need for sulfuric acid, phosphoric acid, country. The expected growth dynamics in the gold energy and water). mining industry of the country necessitates the Initiator: expansion of domestic production of sodium cyanide. ScandGreen Energy Export potential Project location: SEZ "NIPT", Atyrau Oblast In 2014-2018 the average annual growth rate of Consumer markets: domestic market, CIS world gold production was equal to 2%. At the same countries, China time, the neighboring countries, such as China and Russia, are the largest producing countries of the precious metal, which account for about 15% and 8% of world production, respectively.

Key investment indicators Project profitability

Indicator Results

Investment, US$ thousands 73,878

Project NPV, US$ thousands 93,075

IRR, % 30.3%

EBITDA returns, % 44-54%

Payback period, amount of years from 5.1 the start of production Discounted payback period, amount of 6.4 years from the start of production

Project location: SEZ "NIPT", Atyrau Oblast Technological flows of the Project direct production method

Ammonia Methane Mixer Reactor Boiler Air Gas chemical Nur-Sultan complex

Drying Cooling Absorber

Briquette Filter Briquette Almaty Product

KAZAKH INVEST: July 2019 45 Investment Proposal KAZAKİSTAN CUMHURİYETİ ANKARA BÜYÜKELÇİLİĞİ

Communication, transportation and trade Transport and Logistic

Construction of Trade and Transport Logistics center in the West Kazakhstan region

Project description: Market prerequisites: This investment project envisages the construction Growth in the volume of wholesale, retail and of a Trade and Transport Logistics Center “Bask” foreign trade turnover (hereinafter referred to as “TLC”) of interregional The growth in the volume of wholesale and retail significance in the West Kazakhstan region (“WKR”) trade in WKR in the period from 2017 to 2018 was in the city of Uralsk. 16% and 2%, respectively. Given the direct Capacity: correlation between the increase in trade volumes and the growth in storage capacity of warehouses, Cargo turnover of 800 thous. tons/year; • an increase in demand in the warehouse rental The warehouse area is 10,000 sq. m; • sector is expected. In the period from 2016 to 2017, Camping area – 1600 sq. m; • the WKR foreign trade turnover grew by 23% from Service stations (including shops) – 790 sq. m; • 4,443 million US dollars in 2016 to 5,472 million US Gas Station – 1580 sq. m; • dollars in 2017. • TIR parking – 5600 sq. m; • Auto parking – 625 sq. m. Increasing freight turnover Location: Republic of Kazakhstan, West-Kazakhstan The volume of cargo transportation in WKR for region, Uralsk, the area of the chalk hills and 2016-2018, is growing rapidly with an average microdistrict "Sarytau“ CAGR of 10%. Services: storage of goods, terminal cargo Low competition in the field of transport and handling, provision of open areas, warehouses, TIR logistics in the West Kazakhstan region parking, car refueling services (gas stations) Currently, there are no TLCs on the WKR market, which provide a full range of high-quality services. Initiator: “EurasianLogistics” LLP Due to the significant financial costs for the Key investment indicators construction of the TLC and the lack of qualified personnel, competition for this type of service is not Indicator Results expected. Favorable geographical location Investment amount, US$ thous. 15,581 The territory of the WKO is located in a strategic location in the oil and gas processing region. The Project NPV, US$ thous. 5,367 region is bordered by the Russian Federation, also, it is adjacent to the Atyrau and Aktobe regions, IRR, % 18.1 which are the country's oil and gas centers, and where the total population is over 1.5 million people. EBITDA margin, % 37.8% Within a radius of 200 km are the nearest four cities of the Russian Federation with a total number of Payback period, years 7.2 more than 5 million people.

Discounted payback period, years 12.1

Project location: West-Kazakhstan region, Project profitability Uralsk 14,000 39% 38% 38% 38% 12,000 39% 38% Uralsk 38% 10,000 Nur-Sultan 38% 36% 8,000 37% 36% 6,000 37% 36% 4,000 36% 2,000 35% 6,266 6,266 7,623 8,363 9,456 10,578 10,578 11,672

Almaty thousands US$ 0,000 35% Year 3 Year 5 Year Year Year Year 10 15 20 24 Profitability, US$ thous. EBITDA margin, %

KAZAKH INVEST: July 2019 47 Investment proposal Transport and logistics

Construction of a cargo terminal at the international airport in Aktobe

Project description: Market prerequisites: This investment project (hereinafter referred to as Strategic location – the “Project”) envisages the construction of a Aktobe Airport has the potential to become an modern cargo terminal at the base of Aktobe international aviation bridge specializing in transit International Airport, promising to become an cargo and passenger traffic between China, the aviation hub and a transport and logistics center Russian Federation and the EU. The transport connecting China, Russia and Europe. corridor Western Europe - Western China, which Location: recreates the Silk Road, passes through the territory The Project will be implemented in Aktobe on the of Kazakhstan and through the city of Aktobe, in basis of the existing airport Aktobe. particular. The route is 8445 km of automobile and Field of concern: 11 500 km of railway, of which 2787 km and over Service of passenger air flows (through the 2000 km, respectively, run through Kazakhstan. The placement of the existing airport under discretionary convenient location of the airport and proximity to management): key highways contribute to the development of multimodal transportation, which is an important Aircraft; • factor for the success of the Project • Passengers. Growth of freight traffic from China - Air cargo services: The analysis of Lufthansa Consulting showed that in • Cargo planes; 2017 the international air traffic from China, geographically relevant for transit traffic through the • Transit cargo planes. Republic of Kazakhstan, was approximately 5 million tons. This requires the development of an appropriate infrastructure for the full service of a Key investment indicators: substantial share of the specified freight traffic. It is expected that the average annual growth rate of Indicator Results cargo traffic from China will be 4.5% -6.7% until 2030. Investment amount, US$ thous. 25,599 Current international agreements - It should be noted that today there is an agreement Project NPV, US$ thous. 15,091 between Kazakhstan and Beijing China-Russia united international logistics Co. Ltd on the development of IRR, % 14.5 air cargo from / to Kazakhstan and in transit through Kazakhstan. For the purposes of this agreement, EBITDA margin, % 32.9% cargo flows will be generated (35-90 tonnes per flight) from the territory of the PRC to the territory of Payback period, years 10.3 the RK, as well as in transit through Kazakhstan, by Discounted payback period, years 16 aircraft.

Project profitability: Project location: Aktobe oblast, Aktobe city

30.000 45% 39% 39% 36% 40% 25.000 35% Nur-Sultan 20.000 30% Aktobe 6.632 25% 15.000 5.162 15% 20% 10.000 11% 15% US$ US$ thousands 10% 5.000 Almaty 5% 14.506 20.292 24.651 - 0% Year 1 Year3 Year 8 Year 16 Year 24

Profitability, US$ thous. EBITDA margin, %

KAZAKH INVEST: July 2019 48 Investment proposal Transport and logistics

Introduction of roadside services on the roads of the Republic of Kazakhstan

Project description: Market prerequisites: This investment project provides for the construction Growing demand for cars. Over the past 10 and organization of roadside service along the roads years, the average annual increase in the number of cars in the country amounted to 5%. According to of national and international importance. forecasts, the car fleet will grow from 4.3 million Project Goal: Creation and development of a units in 2018 to 10 million units by 2045-2050. The roadside service network on the country's roads to country has also increased passenger and cargo improve transport infrastructure in the Republic of turnover in road transport. The average annual Kazakhstan and increase budget revenues, as well as growth for these indicators over the past 5 years improve the quality of transport services, ensure safe was 2.6% and 2.05%, respectively. At the same and uninterrupted traffic and increase the time, Project implementation will create pressure on informal road carried for their registration and competitiveness of Trans-Kazakhstan transit routes. subsequent streamlining of the transport industry. Services provided: Transit potential. The use of the territory of the Motels with 25 rooms, commercial and public service Republic of Kazakhstan for the transit of goods blocks with cafes, maintenance blocks (gas stations, between East and West is becoming increasingly service stations with a car wash), parking lots, attractive. The growth in transit by road over the engineering structures and networks in all regions past year amounted to 223%. Project implementation is necessary to extract the greatest and cities of the regional destination of Kazakhstan. benefits from transit flows and ensure high quality Initiator: transport infrastructure for them. JSC "National company"KazAvtoZhol” Extensive customer base. In 2018, the share of Key investment indicators of one object cargo transportation by land was 30%, and the share of passenger turnover was 88%. Categories of motoway Index servies A and B C D Project profitability Categories "A" and "B" Investment, US$ thousands 2,456 367 883 7.000 17% 18% 19%19% 19% 20% Project NPV, US$ thousands 2,045 319 167 17% 6.000 IRR, % 26.12% 28.41% 17.10% 5.000 EBITDA return, % 18.4% 79.9% 13.1% 4.000 Payback period, years 5.12 4.81 6.98 10% 3.000 Discounted payback period, years 7.35 6.67 13.84 2.000 Types of roadside service points US$ thous. US$ 1.000 - For IB, IIIA, IIIB climatic subareas with usual 3.715 4.006 4.033 4.262 5.363 5.891 geological conditions; 0 0% - For IVA, IVG climatic subareas with usual Year 2 Year 5 Year 7 Year Year Year geological conditions; 10 20 24 - For IB, IIB, IIIA, IIIB, IIIB, IVG climatic subareas Revenue, US$ thous. with seismic activity of 7 points; EBITDA margin, % - For IB, IIB, IIIA, IIIB, IVA, IVG climatic subareas Categories “C” and “D” with seismic activity of 8 points; - For IB, IIB, IIIA, IIIB, IVA, IVG climatic subareas 2.500 100% with seismic activity of 9 points; 78% 79% 79% 81% 81% Buildings and construction of the objects of 2.000 80% category "A" and "B" Constr 1.500 60%

volum 1.970

Built- 1.795 Total e of up 1.000 40% Name Floors area, the 1.428 1.428 area, thous. US$ 1.359 1.359 sq. m buildin 1.353 sq. m 13% 13% 13% g, cub. 500 13% 13% 20% M 145 162 176 224 250 Motel with 25 rooms 2 410 567 2,667 0 0% Block of commercial 1 850 616 3,584 Year 5 Year 8 Year 10 Year 20 Year 24 services with a cafe Revenue, cat. С, US$ thous. Maintenance block with gas station 1 370 275 1,437 Revenue, cat. D, US$ thous. building EBITDA margin, cat. С, % Total - 1,630 1,348 7,688 EBITDA margin, cat. D, % KAZAKH INVEST: October 2019 Investment offer Transport and logistics

Modernization of the sea ferry complex Kuryk in the Mangystau oblast

Project description: Market prerequisites: This investment project (the “Project”) provides for The position of Kazakhstan between the largest the modernization of the sea ferry complex Kuryk trading partners - China and the EU countries gives with the possibility of providing following services: an advantage for increasing the volume of transit the transshipment of bulky, heavy cargo, and the cargo. The volume of foreign trade between China mooring ships to the berth using tugboats. It is and the EU by 2020 will increase from 615 to 800 planned to build a grain complex in the port. billion USD, and, taking into account these factors, Project Goal: The development of the socio- the potential volume of transit freight through the economic situation of the region, the expansion of RK can reach 5-8% of the total transit freight. cross-border external trade and economic relations, The growth of cargo transit. The transit of goods increasing the transport, export and transit potential through the territory of the RK in 2014 amounted of the Republic of Kazakhstan. to 8.7 million tons and reached 9.3 million tons by 2018. According to experts of Strategy Partnership, Types of services: Transshipment of cargoes, ship an increase in the volume of transit of goods calling services at a port for cargo operations. through the RK to 36 million tons is expected by Services as mooring of vessels to the berth with the 2020, with the subsequent achievement of up to 50 help of tugboats, and transshipment of bulky, heavy million tons per year. cargoes are planned. Low competition. The location of the Kuryk port Initiator: Port Kuryk LLP/NC KTZ JSC allows the supply of port cranes for the Location: Mangistau oblast, Kuryk rural area organization of bulky and heavy cargo transshipment, which cannot be physically handled through the port of Aktau and the Aktau Sea North Terminal due to overall dimensional restrictions. Key investment indicators Project profitability

Indicator Results 70.000 23% 25% 16% 18% 17% 17% 17% 60.000 20% Investment amount, US$ thousand 37,742 15% 50.000 10% Project NPV, US$ thousand 97,699 40.000 5% 30.000 0% 33.3% IRR, % -5% 20.000

US$ thousands US$ -10% EBITDA margin, % 75% 10.000 61.792 -15% 21.152 41.111 47.824 54.850 0 6.258 -20% Payback period 5.5 Year 2 Year 5 Year Year Year Year 10 15 20 24 Discounted payback period 6.9 Revenue, US$ thous. EBITDA margin, %

Project development location: Technical process R, Mangistau oblast, , The main activity of the port of Kuryk is KuKryk rural area, Sarsha region, sites 26 and 27 transshipment from one mode of transport to another. The production process of transshipment operations is the movement of cargo in the port for the purpose of loading or unloading vehicles (ships, wagons, cars). The structure of transported vehicles is railway, automobile, self- Nur-Sultan propelled machinery, rolling cargo.

Aktau Almaty Shymkent

KAZAKH INVEST: September 2019 Investment proposal Information and communication

Communications service provider for government bodies and budget organizations in rural areas through satellite communication systems

Project overview: Market assumptions: The organization of broadband Internet access Growing demand for broadband access in services in rural areas of the Republic of Kazakhstan Kazakhstan. The increase in per capita income in through satellite communication systems. the Republic of Kazakhstan and positive demographic indicators make it an attractive Project objective: Organization of broadband telecommunication market. The structure of Internet access services, VPN and telephony for 1944 revenues from communication services in points in 1058 rural areas of the Republic of Kazakhstan has undergone significant changes Kazakhstan via satellite communication systems. reflecting global trends: revenues have grown significantly in the segments of mobile telephony Commercial product/service: and the Internet. According to ITU forecasts, Broadband Internet access (satellite connection, LTE- Kazakhstan is expected to have a cumulative annual 800) growth rate (CAGR) of broadband access use of 4.6% between 2019-2023. Initiator: Development prospects of broadband access. Kazakhtelecom JSC Both in the traditional and in the new segments of Location: the telecommunications sector, significant changes will occur in the upcoming years. In the face of Branches of Kazakhtelecom JSC, 1058 rural areas – increasing price pressure, cost containment and state bodies, budget organizations. growing competition, telecommunications companies are paying more attention to expanding their business in existing markets, developing new products and increasing operational efficiency. Based on ITU forecasts, the population using broadband access will increase to 3.42 million people in 2023. Key investment indicators Project profitability Indicator Results 25.000 59% 70% 59% 58% 59% 59% 59% 60% Investment, US$ thousands 20,608 20.000 50% Project NPV, US$ thousands 25,034 15.000 40%

IRR, % 44.87% 10.000 30% 20% EBITDA returns, % 51.50% 5.000 10% 18.206 18.206 18.985 19.710 21.306 23.047 23.732

Payback period, number of years from thousands US$ 3.57 0 0% the start of production Year 4Year 5Year 6Year 8 Year Year 10 11 Discounted payback period, number of 4.34 Revenue, US$ thousands years from the start of production EBITDA returns, % Project location: Branches of Kazakhtelecom JSC, Satellite transmission technology 1058 rural areas - VSAT stations for receiving signal

- Signal reception Satellite - Receiving signal

Almaty hub

KAZAKH INVEST: July 2019 Investment Proposal Information and communication

The development of software and technological equipment in the field of logistics

Project description: Market prerequisites The project provides the development of software Growth of the mail and logistics market. and technological equipment in the field of logistics. Globally as well as in Kazakhstan, the general trend of growth in the volume of postal and courier Capacity: 15,645 tastamats services could be admitted. In particular, the volume Products: Tastamats; TOOLPAR hardware; Range of postal and courier services rendered within the of services: «Postbox», «Client», «Service» and market of Kazakhstan is estimated at KZT 33,688 mln in 2018, which is 16% higher than the same «Marketplace». indicator for 2014. Initiator: TOOLPAR LLP E-commerce market development. The e- Location: Nur-Sultan, st. Mambetova 24. commerce market in Kazakhstan is growing at a Main consumers: dynamic pace. According to the data from the Committee on Statistics of the Ministry of National 1) Owners of commercial premises willing to work Economy of the Republic of Kazakhstan, the volume under the partnership scheme; of services sold via the Internet in 2016 amounted 2) Mail and logistics operators, e-commerce traders; to 32.5 mln units, of which 15.4 mln units are retail 3) Legal entities and individuals in the marketplace; goods. The annual increase in traded volumes is 4) Enterprises providing repair of personal items, as more than 42%. well as dry cleaning and laundry services. Growth in demand for postamat services. Accordingly to a described reasons, operators launched an active adaptation of postamats into the market of Kazakhstan. Currently, there are over than 400 parcel lockers installed across the Kazakhstan. Moreover, it is expected to install additional 1,500 postamats by 2020.

Key investment indicators Project profitability Indicator Results 50,000 81% 90% 93% 150% Investment amount, US$ thous. 10,975 47% 100% 40,000 5% 50% Project NPV, US$ thous. 78,233 -20% 30,000 0% IRR, % 28.7% -50% 20,000 3,153 -100% 63% -150%

EBITDA margin, % 10,000 -220%

US$ US$ thous.

10,296 10,296 29,166 39,000 14,263 14,263 19,233 8,765 8,765 -200% Payback period, years 6.5 0 -250% Discounted payback period, years 7.4 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Revenue, US$ thous. EBITDA margin, %

Project location: Nur-Sultan, The number of postamats by regions of RoK, 2018 st. Mambetova 24

Others Almaty city 43% 17%

Nur-Sultan

Nur-Sultan city 12%

Kostanay Oblast 5% Karaganda Oblast Shymkent city East Kazakhstan 10% 5% Oblast 8% KAZAKH INVEST: July 2019 52 Investment proposal KAZAKİSTAN CUMHURİYETİ ANKARA BÜYÜKELÇİLİĞİ

Recycling and production of refractory, irrigation and corrugated cardboards MSW recycling

Modernization of MSW management system in the Karaganda Oblast

Project description: Market prerequisites Construction and equipment of 300 waste collection High level of MSW generation. The Republic of points. As well as the acquisition and commissioning Kazakhstan has a high level MSW generation at the level of 3 million tonnes annually. Moreover, due to of equipment using composting technology, to the dynamic growth of the economy and the growth reduce the volume of municipal solid waste disposal of the well-being of population, the waste generation by production of biogas and generation of green indicator is anticipated to grow to 8.3 million tonnes energy. per year. Capacity: 5 MW of electricity; Lack of competition in the region. The Service of 265 thousand people per year for Karaganda Oblast does not have the enterprises engaged with the recycling of MSW by production of Municipal Solid Waste ("MSW") disposal services. biogas, while the total volume of wastes continues Products: Service of MSW disposal and electric to increase annually. Thus, by the end of 2017, power. more than 350 thousand tonnes of MSW was generated in the Karaganda Oblast, which is the Initiator: GorKomTrans goroda Karagandy LLP third highest indicator across the country after the Location: Karaganda and Karaganda Oblast. largest cities Almaty and Nur-Sultan. Main consumers: The development of new sources of electricity 1) The main consumers of electrical energy are the production. Currently, the state allocates large amount of the investments in the sphere of Financial Settlement Center of RE (state) and electricity production by Renewable Energy Sources enterprises operating on electric power. (“RES”), therefore, production volumes are growing 2) The main consumers of sorted MSW are at an average of 3% annually. At the same time, the companies engaged in recycling of secondary raw volume of production using biogas in 2017 materials. amounted to only 200 thous. kWh, while the total volume of produced electricity by RES being equal to 11,643 mln kWh.

Key investment indicators Project profitability Indicator Results 20,000 66% 68% Investment amount, US$ thous. 16,713 65% 66% 63% 15,000 64% Project NPV, US$ thous. 28,418 61% 62% 10,000 59% IRR, % 25.7% 60%

EBITDA margin, % 61% 5,000 58% US$ US$ thous. 10,951 10,951 13,062 15,249 17,710 Payback period, years 6.1 7,761 8,645 56% 0 54% Discounted payback period, years 7.6 Year 3 Year 5 Year 10 Year 15 Year 20 Year 24

Revenue, US$ thous. EBITDA margin, %

Project location: Product sales provision Karaganda and Karaganda Oblast MSW disposal services The main income will be generated through the payments made by the population and legal entities for waste disposal services. 300 waste collection points will serve 265,000 people in the city of Karaganda. Electrical power Karaganda According to the Law of the Republic of Kazakhstan “On support for the use of renewable energy sources”, KOREM JSC conducts auction bidding for the purchase of “green energy” produced. The winner receives a contract for a guaranteed purchase of electricity for a period of 15 years. GorKomTrans goroda Karagandy LLP is currently registered as a participant in an auction for RES bidding.

KAZAKH INVEST: July 2019 54 Investment proposal MSW recycling

Modernization of the MSW management system in Pavlodar Oblast

Project overview: Market assumptions Modernization of the municipal solid waste (MSW) High level of MSW accumulation. management system in Pavlodar Oblast. According to the Committee on Statistics of the Republic of Kazakhstan, there is a high level of Objective of the Project: generation of solid household waste, which is not Improving the efficiency, reliability, environmental regenerated, at the level of 3 million tonnes and social acceptability of a range of services for the annually. Between 2021 and 2030, an increase in waste generation is expected to reach 8.3 million of collection, transportation, processing and disposal of solid waste per year. For comparison, the global municipal solid waste, increasing the share of solid waste management market amounted to US$ 330.6 waste recycling, as well as ensuring safe disposal of billion in 2017 and it is predicted that by 2025 this waste in Pavlodar Oblast. figure will reach US$ 530 billion with a CAGR of 6%. Production: solid waste disposal service, 20 types Increased public awareness of waste of recyclable materials obtained by sorting. management. The number of landfills and their area is growing rapidly, having a negative impact on Annual capacity: 150 thousand tonnes of solid the environment. At present, in Kazakhstan there waste per year. are more than four thousand landfills, of which only Initiator: Specmashin LLP, Pavlodar city 13% comply with sanitary standards and have a Location: permit for emissions into the environment. The standard of living of the population will improve Pavlodar city, satellite cities – Aksu and Ekibastuz. significantly with the comprehensive modernization Key consumers: of the MSW management system in the country. Household solid waste companies engaged in the Dynamic socio-economic development of the region. Pavlodar is one of the most economically recycling of secondary raw materials. important cities in the country with an average Key investment indicators annual growth of gross regional product of 13%. Project profitability Indicator Results 14.000 36% 35% 35% 40% 35% 34% 34% Investment, US$ thousands 6,427 12.000 10.000 30% Project NPV, US$ thousands 9,631 8.000 20% 6.000 IRR, % 13.8% 4.000 10% US$ thous. US$ 2.000 4.861 5.510 6.690 7.638 EBITDA returns, % 35% 10.120 11.642 0 0% Payback period, number of years 2.8 Year 2 Year 4 Year 8 Year Year Year 11 20 24 Discounted payback period, number of Revenue, US$ thous. 3.1 years EBITDA margin, % Location of the Project: Morphological composition of the MSW in Pavlodar, Aksu and Ekibastuz Pavlodar

Pavlodar Food waste(30%) Aksu

Metal Cardboard (7%) (15%) MSW

Textile Plastic (4%) (14%)

Glass (9%) KAZAKH INVEST: September 2019 55 Investment proposal Production of corrugated containers in the Akmola region

Project description: Prerequisites for Project implementation Construction of a plant for the recycling of paper and Growth of demand for corrugated cardboard or cardboard waste paper and the production of paper boxes corrugated containers in the Akmola region. According to Market Line forecasts, there will be an Initiator: Association of Legal Entities Association of increase in the global level of demand for Packers of Kazakhstan corrugated cardboard or paper boxes. In 2022, the Targets: world market of paper and cardboard will amount to US$ 385.2 bln., which is 3.1% higher than in 2017. Development of the pulp and paper industry and • According to forecasts, in 2022 the world market for the packaging industry of Kazakhstan;: paper and cardboard will amount to 399.5 million • Getting high-quality, competitive products using tonnes, which is 2.5% more than in 2017. advanced manufacturing technologies; Growth of demand for food industry products Creation of a modern plant for the production and • The main potential consumer of corrugated marketing of paper and cardboard products. cardboard and products thereof is the food industry. Commercial products: corrugated packaging. A growing demand for such products as chicken Production capacity: eggs, meat and fruits/vegetables stimulates the • waste paper recycling capacity - 5,000 tonnes; demand for corrugated packaging.. • corrugated packaging production capacity – 7,766 thousand square meters per year.

Key investment indicators of the Project Project profitability 10.000 63% 70% Indicator Results 58% 60% 8.000 53% Investment amount, thous. USD 7,875 41% 46% 50% 6.000 40% Project NPV, thous. USD 11,461 4.000 30% IRR, % 23.9% US$ thous. US$ 20% 2.000 EBITDA margin, % 55% 10% 4,540 5,108 6,260 7,200 8,990 0 0% Payback period, years 5.9 Year 3 Year 5 Year 10Year 15Year 24 Discounted payback period, years 8.1 Revenue, US$ thous. EBITDA margin, %

Project location: Akmola Oblast, Technological process Input Pulp production material Plant for the production of Deinking Paper production Removal of impurities/ corrugated fine purification Adding inks and containers additives

Recycled pulp Nur-Sultan

Publication Printing Forming

Sorting Long term storage Product Almaty Waste paper application collection Shymkent Utilization

KAZAKH INVEST: November 2019 56 Investment proposal Metallurgy and mechanic engineering

Organization of the production of refractory products in the Karagandy oblast

Description of the Project : Market prerequisites This investment project provides for the Import dependence of the country. Demand for construction of a plant for the production of refractory products in the country doubles their refractory products in the Karagandy city. production. Domestic consumption is met through imports mainly from Russia and China. The share of Production and annual capacity : imports in domestic consumption in 2018 was 51%. • 15,000 tons of refractory products per year The demand for refractory products increases due to Project objectives: their use in ferrous and non-ferrous metallurgy, • creation of an effective integrated business for energy and the chemical industry. the production of refractory products and their Unique technology. The technology of RSE NC implementation in the domestic market; IPMRM using chemically active mixtures allows the • obtaining high-quality, export-oriented products use of chemical energy in the system itself, which in using advanced, domestic, patented production turn accelerates the processes of solid-phase technology; sintering, improves quality and reduces cost. • application of domestic technology for the Stable growth in steel demand. High rates of production of competitive products that facilitate growth in the world of steel production and related import substitution. industries create a steady demand for products. Initiator: Lucintel forecasts that global demand for steel and Republican State Enterprise "National Center for the steel products will increase in 2019-2024 with a Integrated Processing of Mineral Raw Materials of CAGR of 1.6%. the Republic of Kazakhstan“ ("RSE National Center IPMRM") Key Investment Indicators Project profitability

Indicator Results 14.000 32% 35% 29% 28% Investment, USD thousands 7,763 12.000 30% 10.000 22% 25% Project NPV, USD thousands 5,405 20% 20% 19% IRR, % 25.0% 8.000 17% 20% EBITDA returns, % 17-32% 6.000 15%

Payback period, number of years from 4.000 10% US$ US$ thousands 5.0 2.240 the start of production 2.000 5% 5.596 8.511 8.812 9.725 10.785 11.788 12.778 Discounted payback period, 0 0% number of years from the start of 6.9 Year Year Year Year Year Year Year Year production 1 2 3 5 10 15 20 24 Revenue, US$ thousands EBITDA margin, % Location of the Project Technical process Karagandy city, Karagandy oblast, Republic of Kazakhstan Clay I stage – Mixing (Grinding and drying raw materials up to 100 microns and 1% moisture)) Refractory Nur-Sultan factory II stage – 2 stage Slag of metallurgical Karagandy pressing (I- 10-15 production (Grinding МPА, II – 150-160 up to 100 microns) МPА)

III stage – drying Fireclay bricks fight Almaty and firing in a (Grinding up to 100 tunnel oven microns) (1300-1350оС)

KAZAKH INVEST: October 2019 57 Investment proposal Agricultural sector Construction of irrigation infrastructure

Project description: Prerequisites for Project implementation Construction of water infrastructure for the regular Productivity irrigation section of Balatobe in the Urdzhar district The irrigation technique and technology has a of . It is planned to install a decisive influence on the quality of regulation of the circular irrigation system on a land area of 2,200 ha. water regime of the soil, and, consequently, not Initiator: URDZHAR AGRO COMPANY JSC only on crop yields, but also on the efficiency of the use of water, soil-climatic, material-technical and Targets: energy resources, as well as the ecological state of • Increasing crop yields while maintaining and the environment . improving soil fertility: Stable demand for corn and sunflower seeds in • Leading in grain and oilseed production volumes the domestic market Project location: The growing demand for corn and sunflower seeds East-Kazakhstan Oblast (EKO), Urdzhar region. creates favorable conditions for growing these Commercial products: soybeans, corn, sunflower crops. Over the past 5 years, per capita seeds. consumption of corn and sunflower seeds has grown Production capacity: with an average annual growth rate of 4.6% and per year: corn - 18 thousand tons, sunflower – 7.9%. Most of the domestic demand is covered by 2,800 tons, soybeans - 300 tons. the domestic production of these crops. Export potential The neighborhood with one of the largest corn importers - China - provides convenient access to the target large and large-scale sales market. Key investment indicators of the Project China's imports in 2018 amounted to 3,521 thousand tons of corn. In addition, more than 93% of the corn export from Kazakhstan goes to Indicator Results Uzbekistan, whose import volumes have increased Investment amount, thous. USD 7,421 by 40% over the past year. Price differential with neighboring countries Project NPV, thous. USD 16,291 In the regions of the Russian Federation adjacent to Kazakhstan, the average price of a kilogram of IRR, % 37.1% sunflower seeds during the year varies depending on the region in the range of 0.25 - 0.4 US dollars, EBITDA margin, % 69.9% which is higher than the average price in Payback period, years 4.3 Kazakhstan by 5% - 60%.

Discounted payback period, years 5.1

Project location: North-Kazakhstan Oblast, Project profitability Akmola Oblast 9.000 72% 8.000 71% 71% 7.000 70% 71% 6.000 70% 70% 5.000 69% 69% 70% 4.000 69% US$ thous. US$ 3.000 69% Balatobe 2.000 1.000 68% 4,111 4,499 5,462 6,242 7,785 0 68% Year 3 Year 5 Year 10 Year 15 Year 24

Revenue, US$ thous. EBITDA margin, %

KAZAKH INVEST: November 2019 58 Investment proposal