On the ratification of the Special Agreement between the Government of the Republic of Kazakhstan and the Government of the French Republic on the implementation of cooperation in the field of combating global warming
The Law of the Republic of Kazakhstan dated February 2, 2024 No. 57-VIII SAM.
To ratify the Special Agreement between the Government of the Republic of Kazakhstan and the Government of the French Republic on the implementation of cooperation in the field of combating global warming, concluded in Paris on November 30, 2022.
President
Republic of Kazakhstan
K. TOKAEV
SPECIAL AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN AND THE GOVERNMENT OF THE FRENCH REPUBLIC ON THE IMPLEMENTATION OF COOPERATION IN THE FIELD OF COMBATING GLOBAL WARMING
The Government of the Republic of Kazakhstan, on the one hand,
and
The Government of the French Republic, on the other hand,
hereinafter referred to as the "Parties",
considering:
the traditional bonds of friendship and good relations between the Republic of Kazakhstan and the French Republic, embodied in various bilateral agreements and declarations;
The Strategic Partnership Agreement between the Republic of Kazakhstan and the French Republic dated June 11, 2008 (hereinafter referred to as the "Strategic Partnership Agreement"), which establishes a general framework for partnership and cooperation between the Parties in various fields and provides for measures to strengthen their cooperation, including in the field of energy security and renewable energy sources;
commitment and commitment of the Republic of Kazakhstan and the French Republic to sustainable development, environmental protection, combating global warming and energy security;
the desire of the Parties to strengthen and deepen their relations within the energy sector, diversify their energy sources, as well as promote and develop renewable energy sources, innovative green technologies and their efficient use;
close cooperation between Kazakh and French companies in various fields, including industry, energy, environment and innovation, as well as existing partnerships and projects implemented in these areas, thanks to the support and assistance of the Parties;
the government policy developed by the French Republic and its successful initiatives to promote renewable and/or alternative energy sources, as well as projects, research, regulations and technologies that have brought the country, as well as its companies, international recognition in this field.;
ambitious goals and policies of the Republic of Kazakhstan and the French Republic to combat global warming, including achieving carbon neutrality, including through projects and technology transfer in the field of renewable energy sources;
Assistance provided by the Republic of Kazakhstan to all forms of cooperation, including initiatives led by specialized private sector companies, to promote renewable energy sources, strengthen the national energy balance, promote energy know-how, and achieve carbon neutrality by 2060
We have agreed on the following:
Article 1
Goal
1. The purpose of this Special Agreement (hereinafter referred to as the "Special Agreement") is to cooperate between the Parties in combating global warming through the promotion, development and implementation of major projects in the field of renewable energy sources and sustainable development in the territory of the Republic of Kazakhstan.
2. In particular, the Special Agreement is aimed at promoting projects that can contribute to achieving the goals, priorities and obligations of the Parties in the field of energy security, transition to environmentally friendly technologies and emission reduction.
Article 2
Subject
1. This Special Agreement applies to projects in the field of renewable energy sources and green technologies, and innovations aimed at the production and storage of electric energy.
2. The Parties intend to apply this Special Agreement to major projects implemented in the territory of the Republic of Kazakhstan (hereinafter referred to as the "Major Project") subject to their acceptance by the Republic of Kazakhstan and capable of making an effective and significant contribution to achieving the above objectives of the Parties. Based on this, a large project must collectively meet the following conditions::
- annual reduction of carbon dioxide emissions (CQ2) by at least 2 million tons;
- production of electricity from renewable energy sources with priority to onshore wind resources;
- minimum production capacity of 1000 MW;
- the minimum capacity of the energy storage system is 300 MW/ 600 MWh;
- production and sale of electricity at a price determined for the relevant Large-scale Project, in accordance with Annex 1 to this Special Agreement, and which contributes to and corresponds to the storage system capacity and other features of the relevant Large-scale Project to optimize the production and use of generated electricity and reduce the use of non-renewable energy sources;
- the duration of the purchase of electricity for 25 years to contribute to the Parties' strategy to achieve carbon neutrality in accordance with the objectives of this Special Agreement;
- contribution to the energy independence of the Republic of Kazakhstan and the stability of its unified electric power system;
- contribution to the development of the know-how and technical skills of the Republic of Kazakhstan in relation to the production and storage of renewable energy sources and carbon emissions control through training, seminars, technology transfer and innovative solutions consistent with the objectives of this Special Agreement;
- contribution to the promotion and development of industrial and technological products and know-how in the Republic of Kazakhstan in the field of decarbonization and global warming control, in particular by participating in a Major Project of operators, service providers and/or components with local content of the Parties. For each Major Project, the French Republic may, subject to article 6 of this Special Agreement, provide export credit insurance corresponding to the amount of debt raised for the Major Project. This amount should be determined in proportion to the local French content (hereinafter referred to as "French Content"). and it should not be less than 50 million euros.;
- the amount of Kazakhstani content (hereinafter referred to as "Kazakhstani Content") which will be used for the technical needs of each Major Project should be defined in the Documentation for the Major Project.
- A major project is being developed by entities (hereinafter referred to as the "Developer") that have:
- financial and technical capabilities for the implementation of a major project;
- Proven experience in the development, investment, financing and operation of renewable energy project(s) (i) in the territory of the Republic of Kazakhstan and (ii) using an energy storage system; and
- qualified personnel on the territory of the Republic of Kazakhstan.
Article 3
Implementation of a Special Agreement
1. The Parties shall promote the development, creation, implementation and operation in the territory of the Republic of Kazakhstan of Major projects in the field of renewable energy sources and green technologies and innovations by, inter alia:
- Cooperation between their respective authorized bodies;
- Cooperation between their respective private sectors;
- transfer of technologies necessary in the field of renewable energy sources and their storage;
- exchange of know-how and technologies in the field of renewable energy sources, energy production and storage;
- The adoption by the Republic of Kazakhstan of the necessary measures and legal and economic instruments to facilitate the creation of projects that contribute to the energy security of the Parties, their sustainable development and the fight against global warming by introducing key conditions for application to Major Projects.
2. The names of specific Developers and Major Projects are contained in the Annex to this Special Agreement ("Appendix 1").
3. Both Sides agree on the need for regular consultations and coordination to ensure the implementation of this Special Agreement. In this regard, the Parties shall appoint representatives duly authorized to conduct such consultations and coordination.
Article 4
Legal framework for Large-scale projects
1. The Parties shall ensure transparency of the legal and legislative framework within which Major Projects will be implemented.
2. The Party in whose territory a Major Project is being implemented conducts negotiations and concludes agreements with the Developer and, depending on the situation, with other participants in the Major Project that will determine and implement the terms of such a Major Project (hereinafter referred to as "Documentation on a Major Project"). The Republic of Kazakhstan stipulates that, with respect to a Major Project to be implemented in the territory of the Republic of Kazakhstan, the Documentation on the Major Project should include the main conditions listed in Appendix 2 (hereinafter referred to as the "Key Conditions").
Article 5
Public and environmental safety
1. All Major projects must follow the current legislation regarding the implementation of social and environmental impact analysis on the territory of the Republic of Kazakhstan.
2. The results of such an analysis should be published and/or available at the request of any interested person.
Article 6
Guarantees
1. In order to facilitate the promotion and development of Major Projects, the French Republic may provide guarantees and/or any other forms of support for the purpose of financing the project.
2. In the case where the French Republic provides export credit insurance, such insurance must comply with the Agreement of the Organization for Economic Cooperation and Development on Official Export Credits of April 1, 1978, including Annex 4 on climate change, including the minimum insurance premium and the maximum term of the contract. Any credit insurance that may be provided by the French Republic must also comply with the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Officials in International Commercial Transactions of December 17, 1997 and the Agreements on Officially Supported Export Credits and Environmental and Social Assessments of June 28, 2012.
Article 7
Dispute resolution
Disputes arising in connection with the interpretation and/or application of the provisions of this Special Agreement are resolved through bilateral consultations or negotiations between the Parties.
Article 8
Scope and operation of the Special Agreement
1. This Special Agreement was concluded in the context of a Strategic Partnership Agreement concluded between the States of the Parties, under which the Parties undertook to cooperate in the field of energy security and to develop their economic cooperation in this field.
2. The Special Agreement has been developed as a separate agreement within the framework of the Strategic Partnership Agreement to support Major Projects in the field of Renewable Energy sources; in this case, and in particular:
- it is applied without prejudice to the Strategic Partnership Agreement and is not intended to modify or supplement it in any way.;
- it is not intended to regulate all aspects of cooperation between the Parties in the field of energy and/or sustainable development, and the Parties reserve the right to conclude any other cooperation agreement; and
- it is applied without prejudice to any other international treaty or convention between the Parties and does not cancel or replace its application.
Article 9
Entry into force, amendments and additions, validity period
1. This Special Agreement shall enter into force on the date of receipt, through diplomatic channels, of the last written notification by the Parties of the completion of the internal procedures necessary for its entry into force.
2. This Special Agreement shall be concluded for an indefinite period and shall terminate upon the expiration of 30 (thirty) days from the date of receipt by one of the Parties through diplomatic channels of a written notification by the other Party of its intention to terminate it.
3. By mutual agreement of the Parties, amendments and additions may be made to this Special Agreement, which are its integral parts, which are formalized in separate protocols and enter into force in accordance with the procedure provided for in paragraph 1 of this article.
Done in Paris (France) on November 30, 2022, in two original copies, each in Kazakh, French and Russian, all texts are equally authentic.
for the Government
Republic of Kazakhstan
for the Government of the French Republic
Appendix 1
A list of selected Major Projects for a Special agreement between the Government of the Republic of Kazakhstan and the Government of the French Republic on the implementation of cooperation in the field of combating global warming.
This Annex has been compiled in accordance with Articles 2 and 3 of the Special Agreement and contains a list of Major Projects and their Developers that have been selected by the Parties and to which the Special Agreement and Annexes apply.
1. The Mirny project
The Mirny project for the implementation, development, construction and operation of a hybrid power plant using wind energy with a total capacity of 1 GW, using an energy storage system with a minimum capacity of 300 MW/600 MWh near the village of Mirny, Zhambyl region, in Kazakhstan, with connection to the electric grid at the 500 kV substation of the YUKGRES near the village of Ulken, with the French company Total Eren as a Developer and two Kazakhstani companies JSC Samruk-Kazyna, JSC NC KazMunayGas or their affiliates as Co-developers, within the framework of a special company being created under Kazakh law, which will implement the Mirny Project.
In accordance with the goals and criteria set out in Article 2 of the Special Agreement, the project will produce electricity, which it will sell to the settlement and financial center for the Support of Renewable Energy Sources, defined in accordance with the Law of the Republic of Kazakhstan dated July 4, 2009 No. 165-IV "On Support for the use of renewable energy sources" (hereinafter - "RFC") at an indicative price of 0.0425 US dollars per kWh, of which for wind farms - 0.03075 US dollars per kWh, an electricity storage system - 0.0097 US dollars per kWh and connections - 0.00205 USD per kWh for 25 years, which will be possible through the use of advanced technologies in the field of wind energy production and electricity storage.
At the same time, the final price of electricity for the Mirny project must be determined by the Parties before the ratification of this Special Agreement, taking into account the results of the 2022 auctions received in the Republic of Kazakhstan.
APPENDIX 2
To the Special Agreement between the Government of the Republic of Kazakhstan and the Government of the French Republic on the implementation of cooperation in the field of combating global warming
The Parties recognize that the legal framework applicable to Large-Scale Projects is the key to the successful implementation of Large-Scale Projects in order to make a significant contribution to the goals of the Parties in relation to the development of renewable energy sources and combating climate change.
The Republic of Kazakhstan sets out the key conditions to be included in the Documentation for a Major Project in accordance with Article 4 of the Special Agreement.
I. KEY CONDITIONS FOR LARGE-SCALE PROJECTS
1. THE BUYER
1.1. Taking into account the technical features of a Large-Scale Project, the buyer has identified a settlement and financial center for the support of renewable energy sources (hereinafter referred to as the "RFCU" or the "Buyer"), in accordance with the Law of the Republic of Kazakhstan dated July 4, 2009 No. 165- IV "On Support for the use of renewable energy sources", which purchases electricity, produced by the station, at a price, in volume, and for a period agreed upon by the parties in Appendix 1 to the Special Agreement. The contract for the purchase of electric energy for the implementation of a Major Project is concluded without holding an auction for renewable energy sources or any other bidding procedure.
2. DOCUMENTATION ON A MAJOR PROJECT
2.1 The documentation for a Major Project includes an investment agreement, an agreement on the purchase of electric energy (hereinafter referred to as the "DPE"), as well as other agreements, the list of which will be agreed upon by the Parties.
2.2 The documentation for a Major Project includes the necessary provisions to help reduce carbon emissions through the use of high-quality technologies in the field of renewable energy sources and electricity storage.
2.3 The Investment Agreement is concluded in accordance with the legislation of the Republic of Kazakhstan and the provisions of the Special Agreement. The form of the DPE is provided for by the investment agreement. The DPE, drawn up in accordance with the provisions of this paragraph, is concluded in accordance with the legislation of the Republic of Kazakhstan in terms of existing mandatory norms and the legislation of England and Wales in terms of any other provisions that are not directly regulated by the legislation of the Republic of Kazakhstan.
2.4 The Parties to the Major Project will conclude an investment agreement with the Government of the Republic of Kazakhstan, as well as an investment Agreement that takes into account the provisions of the legislation of the Republic of Kazakhstan in force on the date of signing the Special Agreement, best international practices and meets the requirements of financial institutions in terms of project financing.
2.5 Disputes arising in connection with the implementation of Major Projects will be considered by one of the following international arbitration institutions (ICC, JIMTC and/or ICSID) based in London.
2.6 Documentation for a Major Project includes the following:
- provisions providing creditors with a payment obligation in relation to the financial stability and solvency of the RFC, including the payment obligations of the RFC under the DPE, as well as
- provisions on compensation by the Republic of Kazakhstan for all amounts in connection with the termination of a Major Project for reasons attributed by agreement of the Parties to violations of obligations by the Republic of Kazakhstan, as defined in the Documentation on the Major Project; and
- other obligations regarding the support of the Republic of Kazakhstan for a Major Project provided for in the investment agreement.
2.7 Taking into account the technical, economic and financial aspects, as well as observing the economic balance of interests of the Parties to a Major Project and the Parties to the Documentation of a Major Project, the Parties to the Documentation of a Major Project will consider the possibility of working out the following conditions:
- participation of a Major Project in the balancing electricity market in real time in accordance with the legislation of the Republic of Kazakhstan applicable to renewable energy facilities;
- purchase and sale of electric energy intended for delivery by a Major Project in accordance with the legislation of the Republic of Kazakhstan and international practice;
3. CONTRACTS FOR THE PURCHASE OF ELECTRIC ENERGY
3.1. When concluding a DPE, the RFC does not apply the procedures provided for by Kazakh legislation for the approval and approval of DPE, with the exception of the requirements for mandatory corporate procedures and a resolution of the Government of the Republic of Kazakhstan approving the relevant investment agreement.
3.2. RFC purchases electricity within the framework of Large-Scale Projects in accordance with the terms of the DPE and the investment agreement.
4. PAYMENTS AND CURRENCY
4.1 The tariff approved for a Major Project must be denominated in a foreign currency.
4.2 All payments for Documentation on a Major Project are made in tenge at the exchange rate on the day of payment.
4.3 The Parties to Major Projects undertake to comply with all the requirements of the currency legislation of the Republic of Kazakhstan, taking into account the following:
i. The Parties to Major Projects have an unlimited right to exchange currency.
p. The Parties to Major Projects have the right, without restrictions, to fulfill foreign currency obligations arising from the Documentation on Major Projects, as well as to receive dividends in foreign currency.
5. FEASIBILITY STUDIES AND PROJECT DOCUMENTATION
5.1 The Republic of Kazakhstan provides full assistance in passing the examination, as well as in obtaining all necessary permits and approvals necessary for the timely implementation of Major Projects.
6. THE EARTH
6.1 The Parties to a Major Project receive land use rights to land plots necessary for Large Projects and acceptable to Developers directly from the relevant government agencies without holding a tender (auction).
7. PRODUCTION REDUCTION, NETWORK SHUTDOWN AND NETWORK MAINTENANCE
7.1 In order to support the production and use of renewable energy on the grid in order to effectively reduce dependence on non-renewable energy sources, the Republic of Kazakhstan should provide for and take all necessary measures to:
7.1.1 reducing the impact on Major Projects of the period of elimination of accidents in the unified electric power system of the Republic of Kazakhstan, leading to the disconnection of Major Projects from the grid;
7.1.2 preventing the system operator from disconnecting Major Projects from the grid for any reason, except for emergencies in the unified electric power system of the Republic of Kazakhstan and coordinated routine maintenance or emergency repairs;
7.1.3 consideration of the issue of transferring to the balance of the system operator the infrastructure (part of the power transmission lines) that is part of the connection of Large Projects to the grid, if the system operator begins to use this infrastructure to transport electricity produced by other energy-producing organizations that are not participants in the relevant Large Project and are not associated with it.
7.2 The Parties to the Documentation on a Major Project will consider the possibility of working out the conditions of use and management of the energy storage system by the system operator.
8. PREFERENTIAL STATUS
8.1 Considering the importance and role that a Major Project should play in combating climate change, as well as the advantages of a Major Project for the Republic of Kazakhstan, an investment agreement for up to 25 years is concluded within the framework of the implementation of a Major Project.
8.2 The Parties to a Major Project implemented in the territory of the Republic of Kazakhstan pay taxes in accordance with the legislation of the Republic of Kazakhstan. At the same time, in accordance with the customs legislation of the Eurasian Economic Union and the customs legislation of the Republic of Kazakhstan, the import of technological equipment, components and spare parts to the territory of the Republic of Kazakhstan necessary for a Major Project is exempt from customs duties.
8.3 An investment agreement, as well as other agreements providing for the provision of investment preferences, are concluded regardless of the composition and share of participants in the project company implementing a Major Project, while the Parties to a Major Project are not entitled to claim investment preferences in the form of tax exemption under the investment agreement.
9. OFFSETS
9.1 The use and implementation of carbon offsets formed within the framework of Major Projects are carried out in accordance with the legislation of the Republic of Kazakhstan.
10. OTHER CONDITIONS
10.1 The Republic of Kazakhstan and all Parties to the Documentation of a Major Project that are affiliated with the Republic of Kazakhstan must comply with and comply with any final decisions provided for in the dispute resolution mechanisms in the Documentation of a Major Project.
The Parties to the Documentation on a Major Project undertake not to raise any objections in the Documentation on a Major Project to the recognition, enforcement and/or actual enforcement of a final arbitral award, except for the grounds for refusal of recognition and enforcement provided for in the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (New York Convention) and/or any other applicable regulations.
10.2. The provisions of this Special Agreement do not apply to the National Bank of the Republic of Kazakhstan, which is not a party to this Special Agreement. Nothing in this Special Agreement should be interpreted as a waiver of any immunities in respect of property owned by the National Bank of the Republic of Kazakhstan by right of ownership (and/or on the basis of another right), and/or property held in trust by the National Bank of the Republic of Kazakhstan.
President
Republic of Kazakhstan
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