Nurlan Zhakupov, Chairman of the Board of Samruk-Kazyna in Kazakhstan, announced a plan to end gas exports by 2026, Vlast.kz reported on May 14.
Kazakhstan's state-owned wealth fund, Samruk-Kazyna, faces significant challenges and strategic shifts in its operations and financial management. In a discussion, Zhakupov highlighted critical issues concerning gas exports, subsidies, and the potential privatization of state assets.
One of the major shifts announced by Zhakupov is the plan to cease gas exports by 2026. This move stems from the increasing domestic demand for gas, which necessitates prioritizing internal needs over international sales. Zhakupov explained,
"By 2026, we plan to have zero gas exports because the needs of our own economy are growing."
Zhakupov outlined the inherent conflicts of interest within the government's role as both a shareholder and regulator. He provided an example involving Kazakhstan Temir Zholy (KTZ), the national railway company, where regional demands for increased train services conflicted with economic feasibility. Zhakupov stated,
"If any of the ministries owned KTZ, it would, without a second thought, supply additional trains, and then issue an invoice to the Ministry of Finance."
Similarly, QazaqGaz faces challenges in maintaining fair pricing while fulfilling social obligations. Zhakupov highlighted,
"QazaqGaz buys gas at one price, but sells it to the population at a price below cost,"
leading to continuous debates with antimonopoly authorities. He emphasized the need for a balanced approach that considers both economic sustainability and social impact.
Samruk-Kazyna significantly subsidizes the Kazakh economy. Zhakupov revealed that the fund subsidized approximately 1.2 trillion tenge ($2.7 bn) over the past year, with KTZ alone contributing about 700 bn tenge ($1.6 bn) by selling goods and services below cost. Similarly, QazaqGaz subsidized around 175 bn tenge ($394 mn), offsetting lower domestic prices by exporting gas. However, with the plan to halt gas exports by 2026, this model is deemed unsustainable.
To enhance financial stability and transparency, Zhakupov suggested privatizing shares in state companies like KTZ and QazaqGaz.
"If we now sell a 20% share of the same KTZ or QazaqGaz on the stock market, then we will have money that we can invest in projects that can increase the profitability of the fund’s companies," he said.
This move would also improve corporate governance and information disclosure standards.
Samruk-Kazyna's financial performance has seen notable improvements, reflected in increased dividend payouts. Last year, the fund paid 238 billion tenge ($536 mn) in dividends, up from 170 bn tenge ($383 mn) in 2022, driven by the needs of its sole shareholder, the government. Zhakupov noted,
"We want to be useful to our shareholders," while highlighting that the fund's only income source is its portfolio companies.
The fund also contributed 67 bn tenge ($151 mn) to the Kazakhstan Halkyna fund.
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