Kazakh anti-monopoly agency says AES underinvested in power plants

energy

Kazakh anti-monopoly agency says AES underinvested in power plants

By SRI ⋅ May 4, 2010 ⋅

(SRI) - Kazakhstan’s anti-monopoly agency on Friday accused U.S. power company AES of failing to invest $460 million into its power plants in Kazakhstan as required by contract. The company has denied the charge.

“AES has failed to meet investment pledges worth $459.5 million,” a spokeswoman for the anti-monopoly agency said, adding that the agency has passed its findings to the Ministry of Finance, which, according to the Kazakh legislation, is in charge of monitoring proper implementation of privatization contracts.

A spokesman for AES, which operates four power plants in Kazakhstan and manages two state-owned power distribution companies, denied the allegations.

“AES is meeting its investment pledges and does not plan to stop investing in Kazakhstan,” he said.

AES reportedly signed an agreement with the Ministry of Energy and Mineral Resources in 2009, outlining investment commitments for 2010-11. According to the company’s press office, AES is currently undertaking an investment program including the KZT1.15-billion ($7.8-million) modernization of a turbine at the Ust-Kamenogorsk hydroelectric station, the KZT2.7-billion ($18.4-million) purchase of a new turbine for the Sogrinsk power station, and the installation of a new turbine at the Ust-Kamenogorsk combined heating and power station for KZT7.5 billion ($51 million).

AES, which has been working in Kazakhstan since 1996, holds a 20-year concession on two hydroelectric stations (Ust-Kamenogorsk and Shulbinsk) and four combined heating and power stations (Sogrinsk, Leninogorsk, Ust-Kamenogorsk, and Semipalatinsk) in eastern Kazakhstan.