Third International Forum on Energy Saving

Speech by Yakup Beris, UNDP Resident Representative in Kazakhstan

May 28, 2021

Minister Atamkulov, Your Excellencies,

Distinguished guests,

It is my pleasure and great honor to be a part of today’s International Forum on Energy Saving.

This event takes place in an unprecedented time, when almost every country in the world has been hit hard by the COVID-19 pandemic. Yet, while this moment presents enormous challenges, it also provides an opportunity to rethink our development strategies and accelerate much-needed reforms to build forward better. As we search for a way out of the crisis, we need to recover better- and to recover better, we need to recover greener.

With Kazakhstan seeking sustainable pathways and clear strategies in relation to low-carbon development and climate change adaptation we highly commend Kazakhstan’s ambitious target to achieve carbon neutrality by 2060, announced by President Tokayev on Climate Ambition Summit last December. Considering economy of Kazakhstan remains one of the most energy and carbon[1] intensive in the world, energy sector transformation will play a key role in Kazakhstan economy decarbonization. Therefore, a bold call for action of the President Tokayev at High-Level Global Roundtable on Extractive Industries, on the development of electric power sector is a clear signal of coming changes.

The value of decarbonizing the global economy by 2050 could be as high as eight times the cost, taking health and education benefits into account (IRENA research). Accordingly, cumulative global GDP would grow by USD 98 trillion above business-as-usual between now and 2050, and renewable energy jobs could quadruple to 42 million. As governments determine how to invest, they have a choice to make: stimulate fossil fuel industries and other remnants of the way things were or invest in an inclusive green economy.

A lesson from the recovery packages worldwide is also that green stimulus policies often have advantages over traditional fiscal stimulus. For instance, green construction projects, such as insulation retrofits or clean energy infrastructure, can deliver higher multipliers. Measures to improve the energy savings through efficiency in cities, buildings and transport systems come with socio economic benefits such as job creation. For example, almost 60% of expenditure on home energy efficiency retrofits could be channeled towards job creation, and local value chains to boost local and national economy.

Considering that energy efficiency investments can be mobilized quickly, they are most feasible investments in the energy sector for decision makers not only to protect existing jobs but also to generate new ones during the Covid recovery. This is because energy efficiency and renewables are labor-intensive investments where USD 1 million spent on energy efficiency is estimated to generate between 6 and 15 jobs on average, varying to the sectors (IEA, 2020). Number of jobs in renewable infrastructure for USD 1 million investment is 7.49 compare to 2.65 in fossil fuels (Garrett-Peltier, 2017).

We do realize that the structure of Kazakhstan economy may render some climate-negative or no impact policies unavoidable. However, even these policies can be designed to have long-term positive climate outcomes by attaching appropriate conditions.

Globally, the United Nations Development Programme works with governments to assess and design country-specific pathways to recovery, which address both the immediate and long-term needs, supporting countries to get back on track towards 2030 and the achievement of the Sustainable Development Goals.

Our Country Programme here in Kazakhstan for the next five years includes work on climate action that will center on scaling up financing mechanisms for clean technologies, energy savings, and low-carbon business development via a green and socially just finance accelerator. This will build on financing mechanisms for energy efficiency and renewable energy, which have been already piloted with the Damu Fund, with a view to expand to other sectors. Low-carbon business development will be promoted through green bonds, renewable energy auctions and carbon trading, among other innovative mechanisms.

Through our programme, guided by the Sustainable Development Goals, we offer expertise to integrate sustainable and carbon-neutral principles into the recovery path of Kazakhstan, through actions on energy efficiency, clean and renewable energy investments, accelerating decarbonization of the economy and protecting the social and natural capital of the country.

In Kazakhstan, our work on economic recovery builds upon the momentum that the Government, UNDP, other international agencies, and the private sector have created with regards to the transition to the green economy.

Already, there has been enormous progress in this area, which has led to the mobilization of billions of tenge in private investment, the creation of green jobs, and the steady emergence of vibrant private-sector industry and services.

Here are just a few of our recent successful initiatives:

 In 2019, we developed the first-ever site-specific renewable energy auction in Kazakhstan. The winning bid for this facility, a 50-megawatt solar installation in Turkestan, yielded the lowest price of any renewable-energy auction so far in Kazakhstan -- 12,49 tenge per kilowatt-hour, while attracting more than 19 billion tenge to the project.

With the national entrepreneurship development fund DAMU we debuted green bonds - a 200 million tenge initiative aimed at unlocking private funding for green growth in the country.

We have also created other two financial mechanisms for attracting private investment into city low carbon projects - through Public - Private Partnerships, ESCO-agreements and others. Presently, 36 projects are being implemented for a total amount of attracted private investment of more than US$ 12 million. This has shown us that, 1 tenge of subsidy mobilizes approximately 10 tenge of private investments, providing tax deductions increase for 3 to 6 tenge, and creating green jobs within the energy service projects.

A typical example of this work is a project in the Akmola region for the energy efficiency modernization of a tourist guest house. As a result of private investment in the among of 19 million tenge and a grant from UNDP-GEF in the amount of 4.5 million tenge the heating and lighting costs were reduced by 50-75 percent.

Just recently, we signed an agreement, worth US$ 150.000 with ENI to improve energy efficiency in a secondary school in Turkistan. The initiative aims at introducing a renewable energy source to feed the school with solar energy up to 20 percent of its total electricity consumption. It is expected that the school’s energy consumption, spending and CO2 emissions will be decreased by at least 20 percent.

UNDP is also launching a new project this year, jointly with the Ministry of Industry and Infrastructure Development, aimed at developing and testing an energy efficiency project guarantee tool, which will further encourage private investment in this sector.

Another example of our constructive and collaborative work with the Ministry of Industry and Infrastructure Development is the adoption of Minimum Energy Performance Standards for household appliances and equipment in 2020, as well as the ongoing efforts to introduce High Energy Performance Standards into public procurement procedures. Let me take this opportunity to thank Minister Atamkulov for the strong cooperation in this regard with his ministry.

With all these concrete examples and potentials to scaling up critical work in the future, let me emphasize that UNDP remains committed to continuing fruitful cooperation with the Government of Kazakhstan and all other partners to take forward the vision of this Forum and advance it to a future that is sustainable and prosperous for all.

I appreciate your attention and wish you very productive and successful discussions. Thank you.