China’s trillion-dollar Belt and Road Initiative is hailed as the “project of the century” as the world’s second-largest economy looks to take the lead role in globalisation historically held by the West.
Much has been discussed about the political, economic and cultural impact that the initiative could have globally since it was introduced in 2013. However, there has been little attention paid to the infrastructure projects in the making.
FinanceAsia will publish a series about the 10 biggest Belt and Road infrastructure deals that have been signed in the 2018 calendar year, and examines which companies are spearheading and likely benefitting from these projects.
The series follows a similar feature in 2017 where we examined BRI projects that started that year. Click here to revisit the feature.
These projects will be published in descending order based on their estimated project value. We will only include infrastructure deals of more than $1 billion.
- Tentek River Hydropower Project, Kazakhstan
Companies involved: China Gezhouba Group
Status: Contracts signed in December 2018
Estimated project value: $1.5 billion
Kazakhstan is poised to play a vital role in China’s Belt and Road initiative ever since it was announced six years ago. In fact, the idea of building a land and maritime route network connecting Central Asia and Europe was first proposed by Chinese President Xi Jinping during his speech at Kazakhstan’s Nazarbayev University in September 2013.
In November 2014, Kazakh president Nursultan Nazarbayev announced a new economic policy known as Nurly Zhol, or Bright Road in English. However, the Bright Road initiative was mostly referred to as the local version of China’s Belt and Road plan, underscoring Beijing’s massive influence in the former Soviet Union republic.
China Gezhouba Group’s plan to build a hydropower complex along east Kazakhstan’s Tentek River is one of the biggest infrastructure projects ever undertaken by Chinese contractors. With a contract value of $1.5 billion, the Tentek hydropower project alone is already over 5% of China’s $28 billion investment in Kazakhstan’s infrastructure through the years.
The project also marks a relatively new venture in Kazakhstan’s energy sector since most of China’s investments in the country were made in the logistics sector. Over the past five years, major Chinese projects include the Khorgos terminal, the world’s largest dry port located at the China-Kazakhstan border, as well as the China-Kazakhstan-Turkmenistan-Iran railway link.
The Tentek hydropower facility will form a key part of Kazakhstan’s ambitious plan to transform from an oil-dependent country into a sustainable economy. Currently, renewable energy accounts for about 1% of the country’s energy mix, and the government plans to raise the share to 30% by 2030 and 50% to 2050.
The facility will include five hydropower stations with total capacity of 480 megawatts, as well as auxiliary facilities such as dams, diversion tunnels and 220 kilovatts of transmission lines. China’s state-owned engineering and construction giant has agreed to build the facility in 60 months.
According to the World Energy Council, Kazakhstan’s total hydropower installed capacity is 2.26 GW. This suggests the Tentek facility will account for more than 20% of the country’s existing capacity.
This was China Gezhouba Group’s third major infrastructure project in Kazakhstan after completing the construction of a cement facility at Kyzylorda, central Kazakhstan for $178 million late last year. In 2010, the group sealed a contract to build a hydropower facility at Alma-Ata for $727 million.