ALL - SEASON MOUNT AIN RESOR T TURGEN

IN V ES TMENT P ROPOSAL Turgen gorge in is a remarkable natural treasure offering unique Project overview: conditions for the development of a large world-class all-season mountain resort. Turgen All-Season Mountain Resort

The gorge is located in the south of the country, 70 km from , which is the largest city in Kazakhstan and is commonly known as its ‘mountain capital’. One of the most important tourism projects for Kazakhstan is the development of an all-season mountain resort in Turgen gorge In addition to a picturesque landscape and abundance of water sources, the near Almaty in the south of the country. gorge is suitable for the construction of up to 100 km of high-mountain ski slopes and a hotel resort with sports and entertainment facilities.

Today, with its trails, waterfalls, thermal springs and varied flora, the unique natural environment of Turgen gorge is attracting ecotourists both from Kazakhstan is enjoying strong economic growth and has Kazakhstan and from further afield. an attractive investment climate. Moreover, the Government of Kazakhstan has identified tourism a priority sector and identified the country’s top 10 tourist destinations, the largest of which the city of Almaty and the surrounding region.

Today Turgen is an attraction for ecotourists f rom Kazakhstan and neighboring countries because of its distinctive natural environment and proximity to the city.

The climate and landscape of the area make Turgen an attractive location for an all-season resort offering an extended value proposition for winter sports enthusiasts and ecotourists, with a total potential of 1.1–1.3 million visitors per year.

The plans for the resort include commercial infrastructure with a capacity of up to 16,000 beds in various categories of hotels and chalets, and construction of up to 100 km of ski runs.

The preliminary total cost of the project is USD ~1 billion. Public investment is planned to provide utility and transport infrastructure, as well as possible co-financing of ski infrastructure.

These materials are provided to the recipient solely for information. They are not intended for making final investment decisions. 1 Located in the center of Eurasia with dynamic Its favorable investment climate and economic and stable growth, Kazakhstan is a leader growth rate make Kazakhstan attractive for among the Central Asian nations foreign direct investment

Kazakhstan is a dynamically developing country that seeks to be among the most Kazakhstan ranks 28th out of 190 countries in the Ease of Doing Business index competitive economies in the world

Kazakhstan in numbers New Zealand 1

South Korea 5 #1 in the Minority Investor A young and growing Hom e to more than 125 ethnic Protection index population with a literacy Malaysia 15 Population: 18.5 million groups and nationalities rate above 99% Kazakhstan 28 #4 in theContract Performance USD 27,700 GDP per capita 1.8% of the world's oil World's largest uranium Russia 31 Security index (PPP1 based), upper average reserves and the world's 12th exporter and 2nd largest income quartile largest crude oil exporter chrome exporter Ukraine 71 #18 Mongolia 74 Ranks 59th (out of 140) Ranks 58th (out of 188) Accounts for 60% of the in the Registration of Property in the WEF index (World in the Hum an Development GDP of theCentral Asian index Economic Forum) index countries India 77

GDP per capita in 2018 PPP, USD thousand

Kazakhstan is located in the center of the 30 Kazakhstan has 27 28 Eurasian continent and movedfrom the lower- is the world’s 9th largest RUSSIA middle income category to the upper-middle country by area 17 18 +215% income category inless

Nur-Sultan than two decades UKRAINE KAZAKHSTAN MONGOLIA 9 Almaty AZERBAIJAN UZBEKISTAN TURKEY TURKMENISTAN TAJIKISTAN CHINA

IRAN 2001 2018

SAUDI INDIA ARABIA

1 Purchasing power parity

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 2 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 3 Development of tourism is a priority for Proximity to Almaty, the largest and most Kazakhstan's economy over the next five years promising tourist destination in Kazakhstan, will ensure that the target level of visitors is achieved

... A promising source (of income) for any region is the development of inbound and domestic tourism, which today creates one in ten jobs worldwide. The Socio-ecоnomic development: government, in turn, needs to take a set of measures, including simplification of visa procedures, development of infrastructure and removal of barriers in the Almaty and are drivers of economic development in Kazakhstan tourism industry... Nursultan Nazarbayev, the first President of K a z a k h s t a n

GDP per capita 24% of the country’s Population – 21% of the country’s (PPP1) – USD 30,668 total GDP 3.86 million total population

…In the near future, Kazakhstan could become one of the most attractive places for foreign and domestic tourists, as well as one of the world's ethnotourism centers. The time has come to radically change the current state of the tourism industry. K a s s y m - J oma r t Tokayev, President of K a z a k h s t a n Tourism development: Moreover, the region is the No. 1tourist destination in Kazakhstan in terms of tourist flows and spending

Tourist flow1, Tourist spending1, Inbound tourists Average annual growth mn visits KZT bn 32% of the country's total Domestic tourists of tourist numbers, 2014– 2.2 mln tourists peryear tourist flow 2018 – 17%

10.0 Population,mln +8% 10.3 +12% 1,008 Current direct 6.0 flights 3.0 414 522 3.9 1.5 218 224 0.9 7.3 132 4 .5 4 86 Almaty is the largest city in the 2.9 87 190 W ithin a 6-hour flight radius country and was the capital of 2017 2023 2030 2017 2023 2030 Kazakhstan for almost 70 years. Located in the foothills of 1Vacationers Trans- Alatau and widely 5.4 12.6 regarded as the country’s Saint Petersburg ‘mountain capital’, it attracts Moscow winter sports enthusiasts and 2.9 ecotourists f rom Kazakhstan Kyiv The key growth driver will be the creation of a unique value proposition to: 1.0 A l m a t y 3.5 and neighboring countries 15.5 2.3 2.5 Ürümqi 21.5 1.0 10.0 2.5 Tashkent Redirect the flow of Kazakhstani tourists who currently take vacations abroad Istanbul Baku8.9 Beijing Antalya Askhabad Seoul to domestic resorts Teheran 17.8 3.2 New Delhi 7.5

Encourage previously non-traveling residents of the country to invest in domestic Dubai Hong Kong tourism 10.3

Bangkok

Increase the num ber of incoming tourists to Kazakhstan

1 Purchasing power parity

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 4 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 5 Turgen gorge map Turgen already attracts tourists with its distinctive natural features and proximity to the city

Turgen is located 70 km the east of Almaty, just 1.5 hours water reservoir by road f rom the international airport

Zhetigen

A3 Turgen gorge is a stunning nature park in Trans-Ili Alatau, in the eastern part of the Tien Shan mountains

Turgen The gorge isrich in coniferousand mixed M-36 forests, alpine andsubalpine meadows, waterfalls and springs, medicinal plants and berries

Almaty ~70 km

The relict Chin-Turgen mossy spruce trees are a natural m o n u m e n t of national importance. Turgen is the only place in the Tien Shan where 20 km such large, lush spruce forests have remained intact

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 6 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 7 Turgen offers unique conditions for the The estimated capacity of the resort development of a large all-season mountain is 1.3 million visitors per year from Kazakhstan resort and countries within a 6-hour flight radius of Almaty

All-season mountain resort with a capacity of 650,000– 750,000 Mild continental climate Sunny days per year Long ski season 1.1 mln– 450,000– +25°C in summer 1.3 mln 550,000 -7°C in winter ~300 November–April visitors per year1

Potential, Thousand visitors

Kazakhstan 360–400

Russia 300–320

China 370–420 Ski run potential Attractive altitude Long ecotourism season South 60–70 Korea

Ukraine 30–40

80–100 km 1,600–3,800 m May–October Turkey 35–40

Iran 15–20 The resort’s target visitors India 7–8 will be ski enthusiasts and nature lovers f rom UAE 1–2 Kazakhstan, Russia, China and South Korea

1 Preliminary estimate

The maTtehreiaselsmaraeteprrioavlsidaerde tporothviederedctipoitehnet rseocleiplyiefnort isnofloerlymfaotrivinefoprumrpaotsioens.. These materials are provided to the recipient solely for information. 8 They are not intendNeodt ffoorr mmaakkiinngg fifinnaall innvveessttmmeennttddeeccissioonnss.. They are not intended for making final investment decisions. 9 Value proposition Key offerings

Sports tourism Sports tourism

The m ain proposition is to ensure a flow of tourists in winter Target segments: recreational athletes, families with children, young people with average and above-average Skiing Snowboarding Snowmobile tours Skating income

Snow tubing Other types of winter recreational activities

Ecotourism Ecotourism

The m ain proposition is to attract tourists in sum m er ■ Mild m ountain climate with an average sum m er temperature of +25°C Mountain hiking Horse riding Rafting Cam ping ■ Rich flora and unique natural m onum ents ■ The gorge already has a reputation as an ecotourism center Target segments: wildlife and active ecotourism lovers Mountain biking Cycling Photo safari / walking tours

Health and Wellness

Wellness and Spa Aquatic therapy Outdoor activities Spa treatment Terrain cure (hiking therapy) Additional proposition is to unlock the potential of the area’s unique natural characteristics: ■ Hot springs in the gorge

■ Rich coniferous and mixed forest and fresh m ountain air Courses, workshops, Target segments: health and wellness enthusiasts thematic recreational (including elderly tourists, families with parents) events

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 10 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 11 Key project information Key assumptions

XX Investments, USD m ln Economic potential of the resort

Duration of stay 3–5 Average cost of accommodation Commercial days 5 star hotel 130–250 infrastructure 540-630 USD Average spending per day 150–200 4 star hotel USD 50–80 ■ 4 potential areas in the gorge for hotels, restaurants USD and entertainment centers 3 star hotel Visitors per year 30–40 1.1–1.3 USD ■ ~400,000 m 2 available for development m ln ■ 13,000–16,000 – potential number of beds in 3-, 4- and 5-star hotels, as well as chalets and townhouses ■ Additional entertainment and restaurants: ‒ skating rink Investment ‒ aqua park and spa center ‒ ski school Commercial infrastructure 540–630 ‒ restaurants andretail boutiques Average cost of commercial USD m ln real estate construction 2,300 USD per m 2 Mountain infrastructure 360–420 USD m ln

Operating expenses Mountain Average monthly salary in tourism infrastructure 360-420 400 USD

■ Capacity of 15,000–18,000 skiers per day Electricity cost 0.04 ■ 80–100 km of ski runs of various levels of difficulty, USD per 1 kW h with the majority being of low and m e d ium level Gas supply cost ■ 13–17 ski lifts 0.09 USD per m 3 ■ Bottom elevation – 1,600 m, top elevation – 3,800 m Water supply cost 0.4 USD per m 3

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 12 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 13 Preliminary plan of the ski area Ski trail network by level of difficulty

Beginners Low level Medium level High level

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 14 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 15 The potential of the Turgen gorge mountain The state will provide utility and transport resort is comparable to that of major infrastructure international mountain destinations

XX Investments, USD m ln

Required utility and transportinfrastructure Mont Tremblant, Canada Bukovel, Ukraine Flumserberg, Switzerland for the resort 30-40

7 km 7 km ■ ~2.6 m ln visitors per year ■ ~1.5 m ln visitors per year ■ ~600,000–700,000 visitors power transmission lines gas pipelines per year ■ 78 kmof trails ■ 68 kmof trails ■ 11 ski lifts ■ 16 ski lifts ■ 65 kmof trails ■ 17 ski lifts

Turgen, Kazakhstan Shymbulak, Kazakhstan Roza Khutor, Russia 5 km 5 km water supply network sewage network

■ ~1.1–1.3 m ln visitors peryear ■ ~400,000 visitors peryear ■ ~900,000 visitors per year 18.5 km 18.5 km ■ 80–100 kmof trails ■ 20 kmof trails ■ 102 k m oftrails communication lines roads ■ 13–17 ski lifts ■ 7 ski lifts ■ 27 ski lifts

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 16 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 17 Government support for investors Key phases of project implementation

If the criteria for priority investment projects are met, the following benefits and preferences are provided to investors:

■ Launch ofthe 2023 Tax and customs preferences: resort 0% 0% 0% 0% Corporate income Land tax for the Property tax for Customs tax for the first first 10 years the first 8 years duties and VAT ■ Construction andinstallation 10 years on imports works by the investor (period defined 2021–2022 in contract) ■ Construction of utility and transport infrastructure by the regional authorities

Government co-financing options:

Co-investment in capital Co-financing of ski Up to 30%subsidy with AIFC’s Direct infrastructure to reimburse the investor Investment Fund construction for construction and ■ Creation of Designing a detailed project installation works and Q3–Q4 2020 roadmap purchase of equipment ■ Signing of contract with the investor

Additional support: ■ Kickoff meetings with potential investors

"One-stop shop" for Government in-kind Q4 2019– ■ Receipt and review of investment foreign investors grants in the amount Q2 2020 proposals of 30% of investment in fixed assets ■ Selection of investor – signing of MOU

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 18 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 19 Contact details

Support provided Information and analytical support for projects in the tourism industry of Kazakhstan Official website www.qaztourism.kz

Support provided One-stop shop for the investor. Support of potential foreign investors in all matters, including assistance in obtaining financing, permits and other government services Official website www.invest.gov.kz

Support provided Support of investment projects, assistance in acquiring land and execution of documents, utility and transport infrastructure Official website www.turizm-zhetysu.gov.kz

Support provided Disclaimer: The above material provides general background information about the Turgen High-Mountain Resort project as of the presentation date and has Medium- and long-term financing of investment been prepared solely for the purpose of meetings with potential investors and projects in the non-resource sector of the economy other interested parties. The material contained in this document is presented Official website in abbreviated form and does not purport to be complete. www.kdb.kz This presentation does not constitute a proposal or recommendation for conclusion of an agreement or contract for investment.

These materials are provided to the recipient solely for information. These materials are provided to the recipient solely for information. 20 They are not intended for making final investment decisions. They are not intended for making final investment decisions. 21