Kazakh Energy Sell-Off Attracts Foreign Firms

ALMATY, Kazakhstan -- Kazakhstan sold off its largest power station and the capital's energy monopoly to foreign investors Tuesday in attempt to boost production and reduce dependency on Russian and Uzbek energy supplies.

AES-Suntree, a U.S.-Israeli partnership of power station operators, pledged to spend at least $500 million to upgrade and operate the unfinished Ekibastuz-I power station in northern Kazakhstan.

Separately, the assets of AlmatyEnergo, the local electricity and heating monopoly, were bought by a Belgian power producer, Tractebel. The company will pay $5 million and promised to invest $270 million to boost production by 30 percent.

Though Kazakhstan is rich in oil, gas and coal, it has had to import electricity from Russia and Uzbekistan because its reserves are located far from industrial centers and many power stations are too dilapidated to work at full capacity.

Both Russia and Uzbekistan have cut off supplies in recent years, citing outstanding debts. Many Kazakhs suspect Russia of using the energy supply as a lever to put political pressure on its southern neighbor.

"All these projects will help us achieve independence in energy production," said Kazakhstan's energy and coal industry minister, Victor Khrapunov. "Our challenge is to get these power stations working capital as quickly as possible. The stations are practically broke."