INVESTOR GUIDE ‘19

IN ASSOCIATION WITH

GOVERNMENT REGIONAL CENTER OF REGION FOR DEVELOPMENT OF Dear friends!

One of the key factors of investment attractiveness is macroeconomic, social and political stability.

Almaty region is one of the largest regions in with huge natural potential and a favorable geographical position for transit opportunities, which provides sufficient possibilities for partnership and business development.

All the necessary conditions for the implementation of joint business initiatives with domestic and foreign partners are provided. We are interested in building mutually beneficial relations, in attracting innovative projects using the latest accomplishments and effective technologies.

Sincerely, the Governor of Almaty region Amandyk Batalov ALMATY REGION

East Kazakhstan region Alakol Karagandy region e district Alakol district lak district district

Balkhash Eskeldy district TALDYKORGAN district TEKELI district Panfilov Ile district district district Kapshagay lake Zhambyl Uigur KAPSHAGAY district region Zhambyl ALMATY district Raimbek district dictrict district

Area Structure 223 911 km² 17 districts Balkhash - 16 400 km² 3 cities Alakol - 2 200 km²

Population Regional Center Major rivers 2 mln. people Taldykorgan , Aksu, Koksu, , Karatal TRANSIT POTENTIAL ТРАНЗИТНЫЙ ПОТЕНЦИАЛ

Almaty region has a unique transport and logistics potential: 5 road crossing points: 4 points on the border with the PRC (Khorgos, , Kolzhat, Nur Zholy), 1 point on the border with Kyrgyzstan (Kegen); 2 railway crossings on the border with China (Altynkol-Khorgos, Dostyk-); 304 km length of the international transit corridor "Western Europe - Western China" in Almaty region; 8 684,6 km – the length of roads of the Almaty region: : 2 546 km – republican roads; 6 138,6 km – regional roads; 93% of roads correspond to a good or satisfactory transport and operational condition; 1 342,9 km – operational length of railway tracks in the region;

ALMATY REGION KHORGOS

Gamburg Brest Moscow Petropavlovsk Nur-Sultan Khorgos (Almaty region) Lianyungang 11 516 km 11-13 days

Istanbul Serahs Khorgos (Almaty region) Lianyungang 10 989 km 20-23 days

Brest Moscow Ozinki Nur-Sultan Khorgos (Almaty region) Lianyungang 9 654 km 12-14 days DEVELOPMENT DYNAMICS

billion KZT

2018 2 677,4 2013

1 741,9

761,9 884,0 574,3 703,3 500,1 431,1 424,8 480,6 535,0 270,4

Retail turnover Investments Agriculture Manufacturing Industrial Gross regional in fixed assets products industry production product

Regional Development Indicators for 2018

INDICATOR TOTAL, BLN. KZT Retail turnover 500,1 Industrial production 884,0 Manufacturing 761,9 Agriculture products 703,3 Investments in fixed assets 574,3

EXPORT IMPORT

UKRAINE; 1,8% MOLDOVA; 0,4% TAJIKISTAN; AZERBAIJAN; UKRAINE; 2,6% UZBEKISTAN; 3,0% 0,2% 4,8% TURKMENISTAN; 1,7% TAJIKISTAN; 11,7%

USBEKISTAN; 16,3% The rest of the world; 62,8% The rest of the world; 94,7% DEVELOPMENT DYNAMICS Retail The growth rate of attraction turnover investment billion KZT billion KZT

528,9 574,3 500,1 490,6 524,2 448,7 453,2 452,2 409,4 400,2 390,2 357,7 170,6 329,2 330,2 80,0 70,9 40,5 38,7 31,5

2014 2015 2016 2017 2018

2014 2015 2016 2017 2018 Investments in fixed assets Non-state investments Investments in manufacturing industry

Agriculture billion KZT 177,10 (27,8%) 703,3 633,3 551,1 597,3 482,5 The main share is occupied by: - Dairy industry (23.6%) - Meat processing (19.7%) - Fruit and vegetable (15%) - Bakery (12%) - Grain processing (8%).

In the region there are 60 feedlots and 55 dairy commodity farms.

2014 2015 2016 2017 2018

Almaty region is the leader in production of soybeans, corn, sugar 16% beet, vegetables, potatoes, meat, of gross agricultural output in Kazakhstan eggs, and wool in Kazakhstan. produced by Almaty region DEVELOPMENT DYNAMICS

Agriculture

Sown area Sugar beet 11 200 ha 9 212 ha 6 874 ha 3803 ha 1244 ha Intensive gardens 2 067 ha 2 244 ha 2 406 ha 345 ha 568 ha Industrial greenhouses 86 ha 92 ha 57 ha 64 ha 71 ha

2014 2015 2016 2017 2018

Industry

Indicators of industrial development of the region for 2018

INDICATOR TOTAL, BLN. KZT Industry volume 884,0 Manufacturing industry 761,9 Mining industry 11,2 Electricity, gas, steam and air conditioning 102,9 Water supply, sewage, control over the collection and distribution of waste 7,8

Industry structure

% for 2018

Manufacturing industry 86,3% (761,9 bln. KZT) Power supply 11,6% (102,9 bln. KZT) Mining 1,2% (11,2 bln. KZT) Water supply 0,9% (7,8 bln. KZT) DEVELOPMENT DYNAMICS

The volume of production Total number of industrial products of industrial (goods, services) enterprises Bln. KZT 2018 884,0 750,5 645,3 21 165 Small 553,6 537,3 501 Medium 126 Large

2014 2015 2016 2017 2018

Manufacturing structure

Bln. KZT (2018) 177,10 (27,8%)

Food products manufacturing 31,2 (39%)

Manufacture of other non-metallic mineral products 13,5 (17%)

Manufacture of coke and refined petroleum products 8,5 (11%)

Tobacco production 6,2 (8%)

Beverage production 6,2 (8%)

Metallurgical industry 2,4 (3%)

Manufacture of paper and paper products 2,1 (3%)

Production of basic pharmaceutical products 1,5 (2%)

Manufacture of finished metal products 1,5 (2%)

Manufacture of electrical equipment 1,5 (2%)

Other 8,3 (6%) INDUSTRIAL POTENTIAL

Trans-national companies

There are enterprises with the participation of transnational companies in the region: Coca-Cola Almaty Bottlers, Danone, RG BRANDS Kazahstan LLP, EFES Malt Plant Soufle Kazakhstan, JTI, Philip Morris Kazakhstan, Knauf, Hamle Company LTD, Henkel, Tikkurila, Hoffmann Aluminum, Alugal. The number of employed - more than 5 thousand people.

«DANONE» plant

«COCA COLA Almaty Bottlers» plant «TIKKURILA» plant INVESTMENT POTENTIAL Ongoing projects 2019 - 2025

Investment volume ₸2 572,9 bln.

32 27 947 Projects 202 Work with foreign Projects capital places being realized ₸ 1 505,4 bln. The volume of investments 9 in projects implemented Transnational jointly with the participation companies of foreign investors

Transnational companies 16 in the Republic of Kazakhstan

of them 9 in Almaty region INVESTMENT POTENTIAL Foreign investment projects

COMPLETED

"MAREVEN FOOD TIAN-SHAN" LLP, Mareven (Cyprus) The construction of a factory for the production of food and semi-finished products

СOST CAPACITY 15,4 417 BLN. KZT MLN. UNITS (21,2 BLN. KZT)

JOBS COMMISSIONING 523 2018 PERSONS YEAR

"WILO CENTRAL ASIA" LLP, WILO (Germany) Plant for the production of pumping equipment

СOST CAPACITY 2,1 2 000 BLN. KZT UNITS A YEAR

JOBS COMMISSIONING 40 2018 PERSONS YEAR

ONGOING

LUKOIL LUBRIKANTS LLP, PJSC LUKOIL (Russia) Construction of a plant for the lubricants production

СOST CAPACITY 27,2 100 000 BLN. KZT TONS OF LUBRICANT MATERIALS A YEAR

JOBS COMMISSIONING 200 2019 PERSONS YEAR INVESTMENT POTENTIAL Foreign investment projects

ONGOING

PHOENIX FEED MILLS LLP, Phoenix Commodities DMCC (UAE) Construction of feed mill

СOST CAPACITY 4,8 60 000 BLN. KZT TONS A YEAR

JOBS COMMISSIONING 87 2019 PERSONS YEAR

ENEVERSE KUNKUAT LLP, Eneverse Kunkuat PTE. LTD (Singapore) Construction of a solar power plant with a capacity of 150 MW

СOST CAPACITY 30 150 BLN. KZT Mwh

JOBS COMMISSIONING 32 2019 PERSONS YEAR

ALACEM LLP, Kazakhstan-Singapore Joint Venture Construction of a cement plant

СOST CAPACITY 47,0 1,2 BLN. KZT MILLION TONS OF CEMENT A YEAR

JOBS COMMISSIONING 360 2019 PERSONS YEAR INVESTMENT POTENTIAL Foreign investment projects

ONGOING

«FARM FRITES EURASIA” LLP, FARM FRITES (Netherlands) Food processing and production of french fries

СOST CAPACITY 43,1 70 000 BLN. KZT TONS OF FROZEN POTATOES A YEAR

JOBS COMMISSIONING 450 2020 PERSONS YEAR

" KOY" LLP, Baumann Gmbh & Co.KG (Germany) Meat processing plant, slaughter and deep processing of small cattle

СOST CAPACITY 7,2 30 000 BLN. KZT TONS A YEAR

JOBS COMMISSIONING 450 2020 PERSONS YEAR

«GREEN LAND ALATAU» LLP , AIC "ECO CULTURE" (Russia) Construction of a greenhouse complex

СOST CAPACITY 66,4 45 000 BLN. KZT TONS OF VEGETABLES A YEAR

JOBS COMMISSIONING 1 500 2020 PERSONS YEAR INVESTMENT POTENTIAL Foreign investment projects

ONGOING

«INALCA EURASIA KAZAKHSTAN» LLP, Inalca S.p.A (Cremonini, Italy) Construction of feedlots, production and processing of meat products

СOST CAPACITY 15,0 40 000 BLN. KZT TONS OF MEAT A YEAR

JOBS COMMISSIONING 280 2022 PERSONS YEAR

DOSTAR LLP, RUNGIS KAZAKHSTAN (France) Construction of a trade and logistics hub

СOST CAPACITY 32,3 1 000 BLN. KZT CARGO CARS PER DAY

JOBS COMMISSIONING 7 000 2022 PERSONS YEAR

«GLOBAL GENERATION» LLP Construction of a thermal power plant

СOST CAPACITY 115,5 400 BLN. KZT Mwh

JOBS COMMISSIONING 500 2024 PERSONS YEAR SEZ "Khorgos - Eastern Gate"

Almaty region

China

Total area of SEZ «Khorgos – Eastern Gate» is 4591.5 ha. The territory consists of the following:

Dry port -129.8 ha; Logistic zone -224.9 ha; Industrial zone - 224.4 ha; Reserve area - 4 012.4 ha.

Anchor investors - PBP CAPITAL LTD (DUBAI, United Arab Emirates) and CMA CGM are Dry port of SEZ «Khorgos - Eastern Gate» involved in the logistics area.

As of 2018, 78 participants are registered in the unified register. Particularly, 15 companies are currently members of the SEZ (KTZE - Khorgos Gateway LLP, Zarya ltd LLP, Hubei Kelison LLP, East Gate Partners LLP, Profood LLP, ImPex Gate LLP, Phoenix Feed Mills LLP, Agroproductsnabservis LLP, Neptune Corporation LLP, Alatau Logistics LLP, VernoGroup / PNK Group, "PBP CAPITAL LTD", "CMA CGM"), occupying more than 247 hectares of SEZ «Khorgos-Eastern Gate» territory and involving investments more than 392 billion tenge.

International Center for Border Cooperation (ICBC) «Khorgos» INDUSTRIAL ZONES

1

Taldykorgan

4 China 5 2 3 6 Almaty

Kyrgyzstan

1 «Taldykorgan» 4 «Arna» іndustrial zone іndustrial zone Area: 594,9 ha Area: 1 303 ha

2 «Bereke» 5 «Boraldai» іndustrial zone іndustrial zone Area: 535 ha Area: 601,8 ha

3 «Kairat» 6 «Kazbek bek» іndustrial zone іndustrial zone Area: 198 ha Area: 961 ha INDUSTRIAL ZONES

«Taldykorgan» «Bereke» industrial zone (594,9 ha) industrial zone (535 ha)

Location Water pipes Location Water pipes Taldykorgan 16,6 km Ile district 20,2 km

Free area Sewage Free area Heat supply 245 ha 15,5 km 535 ha 200 Gcal/h

Railways Communication cables Railways Communication cables 5,4 km 19,4 km 5,4 km 15 km

Roads Street Lighting Roads Gas supply 11,5 km 4,3 km 10,3 km 10,2 km

Power supply Gas supply Power supply 40 MW/h construction work 60,4 km is underway Completed projects: 35 Ongoing projects: 10 Ongoing projects: 5

«Kairat» «Boraldai» industrial zone (198 ha) industrial zone (601,8 ha)

Location Water pipes Location Water pipes 1 935 m3/h* Ile district 1 300 m3/h*

Free area Sewage Heat supply Sewage 97,9 ha 1 000 m3/h* 21 Gcal/h* 665 m3/h*

Railways Gas supply Railways Gas supply 2,9 km 12 978 m3/day* 2,5 km 19,89 km

Power supply Power supply * 10 MW/h 126 MW/h*

* - projection or construction work is underway * - projection or construction work is underway

Ongoing projects: 10 Completed projects: 10 Ongoing projects: 5

«Kazbek bek» «Arna» industrial zone (961 ha) industrial zone (1 303 ha)

Location Water pipes Location Water pipes Zhambyl district 4 800 m3/h* Kapshagai 33 967 m3/h*

Power supply Sewage Power supply Sewage * 3 * 19 MW/h 4 500 m /h 130 MW/h* 21 090 m3/h*

Railways Gas supply Railways Gas supply 3 * 5,92 km 20 000 m /day 9,11 km 16 600 m3/day* * - projection or construction work is underway * - projection or construction work is underway

Completed projects: 1 Ongoing projects: 4 RENEWABLE ENERGY SOURCES

Operating

17 4 1 Hydro Wind Solar power plants power stations power station

Total capacity : 775,75 MWh Share in total electricity production: 39%

Renewable Energy Development Plan Plan to 2025

PERIOD QUANTITY CAPACITY, MWh 60% Up to 2020 31 734,3

Up to 2025 46 2 512 Total electricity production

Among the projects until 2025:

- Eneverse Kunkuat SES LLP - 150 MW; - JSC “Birlik” VES - 18 MW; - Aktogay HPP, HPP - 220 MW. TOURISM

Balkhash lake

Taldykorgan

Beshatyr mound

Singing Kapshagay sand dunes reservoir

Charyn Тurgen canyon waterfalls Almaty

Kaindy lake TOURISM

Zhetysu is the pearl of Kazakhstan

The region has national parks: - «Altyn Emel» - «Kolsay koldery» - «Eli-Alatau» - "Dzhungar Alatau» - “ Canyon» - Almaty and Alakol reserves

Lakes: Alakol, Balkhash, Kapshagai Wellness centers: Alma-Arasan, Kapal-Arasan, -Arasan Mountain ski resort: Akbulak

priority tourist areas within the Republican map 10 of Kazakhstan touristization 2 are in Almaty region

In 2018, 30 investment projects worth 5.5 billion tenge of private investment were implemented, including the five-star Koktem Grand Resort hotel on the shores of Lake Alakol (2.3 billion tenge) with 500 beds.

The growth of tourist flow was 27.6% in 2017, and in 2018 - 22.2%. In 2018, 1.9 million people visited the Almaty region for tourist purposes. Up to 2.5 million visitors are expected this year, which characterizes the growth of this indicator by 31.6% compared to last year.

The volume of services rendered by locations in 2018 amounted to 12.9 billion tenge, for four years this figure increased three times (2015 - 4.3 billion tenge). In the region there are 729 placements, an increase from last year’s level by 7.2%, they have 9607 rooms, while the one-time capacity is 25,929 beds.

The index of physical volume (IFO) of the tourism industry of the Almaty region according to official statistics in 2018 for 9 months (January-September) was 133.4%. PROGRAMS OF STATE SUPPORT

ROAD BUSINESS MAP Subsidizing loan interest rates, insurance and guaranteeing loans, infrastructure laying, service support, etc.

AGRIBUSINESS SUPPORT Subsidies for a part of investment costs, PROGRAM costs for sowing and harvesting, subsidies for livestock breeding, etc.

PRODUCTIVITY SUPPORT Leasing financing, reimbursement of part PROGRAM of expenses of 40-50%, as well as costs of subjects of industrial and innovative activities to promote domestic processed goods, works and services in the domestic market.

EXPORT SUPPORT The program provides service, PROGRAM financial and informational support for exporters.

PROGRAM OF SUPPORT Preferential fixed tariffs for electricity RENEWABLE ENERGY for renewable energy facilities SOURCES for a period of 15 years with annual indexation of inflation, etc. PREFERENCES FOR INVESTMENT PRIORITY PROJECTS

TAX PRIVILEGES CIT - 0% up to 10 years. Land tax - 0% up to 10 years. Property tax - 0% up to 8 years.

INVESTMENT SUBSIDIES Up to 30% of the costs associated (CASHBACK) with the implementation of construction and installation works and equipment

MIGRATION The regime without quotas BENEFITS and permits to attract foreign labor during the construction period and 1 year after commissioning. Since January 1, 2017, a 30-day visa-free regime has been introduced for citizens of 60 countries.

GUARANTEE Stability of tax legislation for all taxes, OF STABILITY except for VAT and excises (subject OF LEGISLATION to an investment agreement).

Other benefits

CUSTOM PRIVILEGES Exemption from customs duties on imports: - equipment and their components; -spare parts; - raw materials.

NATURAL GRANTS Land plots, buildings, cars, equipment, etc. CONTACT INFORMATION OF STATE BODIES AND ORGANIZATIONS

LOCAL AUTHORITIES OF ALMATY REGION

GOVERNMENT OF ALMATY REGION DEPARTMENT OF ENTREPRENEURS (http://zhetysu.gov.kz) AND INDUSTRIAL-INNOVATIVE DEVELOPMENT 040000, Taldykorgan city, OF ALMATY REGION Navarbayev Ave., 38 (http://industry.gov.kz) Phone: +7 (7282) 24-74-29 040000, Taldykorgan city, E-mail: [email protected] Kabanbay batyr str., 26 Phone: +7 (7282) 32-95-58 Fax: +7 (7282) 32-95-61 E-mail: [email protected]

SERVICE CENTER FOR INVESTORS OF ALMATY REGION

REGIONAL CENTER FOR DEVELOPMENT OF ALMATY REGION, LLP (invest.alm-reg.kz) 040000, Taldykorgan, 050000, Almaty, 113, Ablay Khan str., 1st floor, left wing 112, Zheltoksan str., room 516 Phone: +7 (7282) 40-04-94; Phone: +7 (727) 390-48-84 +7 (7282) 32-95-14; +7 (7282) 32-97-33; E-mail: [email protected] invest.alm-reg.kz