Russia is making every effort to preserve its presence and influence in Kazakhstan. One of the key instruments for achieving this is expected to be the recently approved project to build Kazakhstan’s first nuclear power plant near Lake Balkhash. The plant is scheduled to begin operations in the mid-2030s, with the total turnkey cost of the project estimated at $16.4 billion.
At first glance, this appears to be a solid attempt to restore the previous level of cooperation. However, the entire picture is overshadowed by one significant detail: the construction will be financed through an “export loan from Russia.” This was emphasized by Almasadam Satkaliyev, head of Kazakhstan’s Atomic Energy Agency. The Russians understand the paradoxical nature of a situation that resembles “paying for their own party,” and therefore tried to reassure their domestic audience through a statement by Alexey Likhachev. He hinted at some level of Kazakh participation in the financing but was unable to specify its share, while acknowledging that Russia would bear the main investment burden.
These developments are unfolding against the backdrop of the collapse of the Kremlin’s narrative about an “unsinkable economy” supposedly benefiting from sanctions. In reality, Russia is experiencing record-low GDP growth of just 0.4%, cuts to social programs across the country, and a severe state budget deficit that had reached nearly 6 trillion rubles by the beginning of May. Given these challenges, and considering that Moscow does not intend to reduce spending on the defense sector—which is budgeted at 12.9 trillion rubles, equivalent to the combined budgets of 62 Russian regions—the allocation of funds for a major project in Kazakhstan appears, at the very least, unusual.
As always, the Russian public remains the primary source of funding for the Kremlin’s ambitions. In the near future, increases in utility, gas, and electricity tariffs have already been approved for the population. However, another fact is particularly noteworthy: Russia has failed to secure a monopoly over Kazakhstan’s nuclear energy sector. To maintain a “friendly balance,” the contract to build another nuclear power plant in the country was awarded to China National Nuclear Corporation (CNNC).
