Kazakhstan, Central Asia’s largest economy and oil producer, since 1991 has had to rely on the deteriorating infrastructure it inherited from the Soviet Union. As a result, nearly every piece of public infrastructure (e.g., roads, hospitals, power plants, kindergartens, sewerages) in Kazakhstan requires a different degree of upgrading and/or expansion. Kazakhstan authorities have come to recognise that they cannot finance the necessary investments in public infrastructure from current budgets and that a major part of future financing must flow from the private sector. The need for the inflow of capital is becoming even more pressing because of sharp decline of the Kazakhstani commodity revenue. As a result, the authorities in Kazakhstan are trying to offer some fiscal incentives and optimise the legal framework to encourage private investment in public assets, including by way of PPPs.

On 7 July 2006 the law of the Republic of Kazakhstan "On Concessions" No.167-III ЗРК (the "Concession Law") has been adopted that enabled execution of six concession agreements as of 2016. The lack of popularity of concessions so far, however, is due to excessive regulation of concession relationships by the relevant legislation, which diminishes the parties’ flexibility in determining project terms and because the process for granting concessions in Kazakhstan is very bureaucratic and time consuming. In order to address this issue, on 31 October 2015 the Republic of Kazakhstan enacted a new law, "On Public-Private Partnerships" No. 379-V ЗРК (the "PPP Law"). Public-private partnerships can now be structured not only as concessions and can be used to implement projects under the PPP Law framework in any sector of the economy, though declared priorities are (i) education, (ii) healthcare, (iii) transport, (iv) power industry and (v) housing and public utilities.

These combined challenges are creating an unprecedented opportunity for the infrastructure industry to emerge with solutions. Because of our extensive experience in virtually the entire spectrum of projects, leading players in the public infrastructure market repeatedly turn to GRATA International to assist them with their infrastructure development projects.

As the largest local law firm in Central Asia, GRATA International acts for both domestic and international clients and all manner of infrastructure industry participants, our team of lawyers has played a significant role in most of the public-private partnership projects in Kazakhstan and Central Asia. Our proficiencies in these areas include expertise in corporate/commercial law, real estate, construction, tax and project finance, as well as in the more specialized areas such as procurement and environmental law.

Drawing from a diverse pool of expertise, we have acted as project counsel on an extraordinarily broad range of infrastructure projects. A representative list would include:

  • transport (motorways and railways, light rail and airports);
  • water and waste utilities (water supply and treatment, waste recycling and incineration);
  • energy (conventional and alternative energy, as well as power transmission infrastructure);
  • industrial enterprises (Greenfield and Brownfield);
  • complex development of territories (including multi-regional projects);
  • social infrastructure (hospitals and other healthcare facilities, schools, etc.).

In the area of PPP, our services include:

  • Structuring the PPP scheme, support in determining most effective implementation schemes, participation in negotiations with state authorities and respective state bodies;
  • Legal due diligence, analysis of legal risks detected;
  • Drafting and harmonization of agreements including PPP contracts and concession agreements; drafting auxiliary documentation with regard to a field-specific regulation, if applied;
  • Soliciting permits and approvals with state authorities required to implement the project including antimonopoly clearance;
  • Monitoring the performance of liabilities and commitments by the parties as stipulated by the agreement, legal advice to the client on any issues related thereto.


Publications:

     

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Listed, Chambers Asia-Pacific: Asia-Pacific's Leading Lawyers for Business (2013, 2014, 2015)         
Listed, Chambers Global: Leading Lawyers for Business (2013, 2014, 2015)



Representative Matters

  • Advising an American multinational conglomerate corporation and respective government bodies of the Republic of Kazakhstan on reforming the tariff policy and legislative and regulatory framework for renewable energy power plants in the Republic of Kazakhstan;
  • Advised EuroChem, Russia’s largest mineral fertilizer producer on the construction of Chemical Producing Plant in South Kazakhstan (USD 2 bn. total value infrastructure project) where GRATA, among other things, advised on possible legal structures of implementation of the project and state guarantees, as well as drafted and negotiated with the Government of the Republic of Kazakhstan unprecedented host government agreement between the Republic of Kazakhstan and a foreign investor;
  • Advised Samsung C&T and KEPCO on the Balkhash Power Plant project (debut USD 4 bn. Independent Power Producer (IPP) project in the Republic of Kazakhstan), where GRATA, among other things, advised on possible legal structures of implementation of the project, tariff issues and state guarantees, as well as drafted and negotiated with the Government of the Republic of Kazakhstan an unprecedented international treaty between the Republic of Kazakhstan and South Korea that created specific legal framework for the project;
  • Advising China Development Bank (CDB) and Bank of China (Hong Kong) on a USD 2.5 billion syndicated secured loan facility to Beineu – Shymkent Gas Pipeline LLP (controlled 50-50 by KazTransGas and CNPC) to finance a gas pipeline project in the Republic of Kazakhstan, where GRATA, among other issues, worked on applicable for natural monopolies tariff regulation of transportation of gas issues that affect bankability of the project;
  • Advising CDB and Bank of China (Hong Kong) on a USD 7.5 billion syndicated secured loan facility to Asia Gas Pipeline LLP to finance a gas pipeline project in the Republic of Kazakhstan, where GRATA, among other issues, worked on applicable for natural monopolies tariff regulation of transportation of gas issues that affect bankability of the project;
  • Advising CDB and Bank of China (Hong Kong) on a USD 4.7 billion syndicated secured loan facility to Asia Gas Pipeline LLP to finance a gas pipeline project in the Republic of Kazakhstan where GRATA, among other issues, worked on applicable for natural monopolies tariff regulation of transportation of gas issues that affect bankability of the project;
  • Advised as Kazakh local counsel KEXIM, K-SURE and other ECAs on the multi-billion dollar project financing of the IPCI2 petrochemicals plant in Atyrau, Kazakhstan, where GRATA, among other things, advised on possible legal structures of implementation of the project and potential state guarantees.
  • Advised JSC Sberbank of Russia on financing of the expansion of Northern Terminal of Aktau International Sea Port, including advice on relevant natural monopoly issues and tariff regulation;
  • Advised Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the Ministry of National Economy on the project of Support to Drafting a Law On Amendments to Some Legislative Acts of the Republic of Kazakhstan related to Transition to Green Economy including analysis of current legal framework on transition to “green” economy in such sectors like water/wastewater, solid waste management, urban transport, district heating and cooling to determine legal impediments and issues; participation in the working groups and meetings with representatives of state authorities and authorised organisations which activities is associated with transition to “green” economy in such sectors like water/wastewater, solid waste management, urban transport, district heating and cooling; drafting relevant legislative amendments;
  • Advised the World Bank and the Ministry of National Economy of the Republic of Kazakhstan on the development of PPPs in the Republic of Kazakhstan;
  • Advised European Bank for Reconstruction and Development (EBRD) on the secured financing of a water supply and waste water services company in the City of Shymkent;
  • Advised Asian Development Bank and relevant government bodies of the Republic of Kazakhstan on reforming the tariff policy and legislative and regulatory framework for natural monopolies in water, district heating and waste disposal sectors, to attract private investments, including by way of PPPs;
  • Advised the EBRD and Government of the Republic of Kazakhstan on the initial stage of the Phase 1 of the reforming the tariff policy and legislative and regulatory framework for natural monopolies in various sectors of economy of Kazakhstan, including heating, airport services operation of water and sewage systems;
  • Advised the EBRD on Kyzylorda CNG Bus Project, including advice on structuring, review of the public service contract as a PPP agreement with local municipality and relevant tender documentation;
  • Advised Global Green Growth Institute (South Korea) on improvement of legal framework for infrastructure projects based on PPP basis in water sector, where GRATA, among other things, participated in working groups with and respective government agencies of the Republic of Kazakhstan and worked on applicable regulation of tariffs that affect bankability of the project in water sector;
  • Advised consortium of Korean investors (GS and STX) on development, financing, construction, exploitation and support of 100 - 150 MW gas power plant in South Kazakhstan, including negotiation and working on host-government agreement with local mayor of region;
  • Advised local investor on development, financing, construction, exploitation and support of a coal power plant in the North Kazakhstan, including negotiation and working on host-government agreement with local mayor of region;
  • Advised the EBRD on a KZT 1.236 billion senior loan to Aktau TVS&V, a water and district heating company in the City of Aktau, the Republic of Kazakhstan, supported by the local mayor (Akimat) of Western Kazakhstan. The objective of the project was to enable the relevant local authorities to increase the efficiency of water operations in the region, so as to equip the city with the municipal infrastructure. As a part of the assignment, GRATA was involved in negotiations with the local mayor (Akimat) of the project support agreement as the PPP agreement;
  • Advised a concessioner of the Aktau International Airport on tariff regulation and natural monopolies issues under the executed concession agreement.
  • Advised local mayor (Akmiat) and PPP center of Karaganda city on the initial stage of the potential concession project (kindergartens), including review of the tender documentation and draft concession agreement.
Name Position Contacts
Shaimerden Chikanayev Partner, Director of Banking & Finance Department Inquire
Atabek Sharipov Partner, Representative in Turkmenistan, Head of Banking & Finance, Finance & Securities in Turkmenistan Inquire
Nurlan Kyshtobaev Partner, Head of Banking & Finance Practice in Tajikistan and Kyrgyzstan offices Inquire
Marina Kahiani Partner Inquire
Yana Dianova Director of Corporate and Commercial Law Department, GRATA International (Moscow) Inquire
Nodir Yuldashev Partner, Construction, Telecommunications, Transport, Tax and Litigation Inquire
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Key contacts

Shaimerden Chikanayev

Partner, Director of Banking & Finance Department

Almaty

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