The Fund’s activities are focused not only on making a profit, we perform the function of redistributing funds between different sectors of the economy for the benefit of the country and our citizens. Rather, on the contrary, the Fund’s activities for modernization and support of social infrastructure require investment decisions, where the indirect social effect significantly exceeds material costs. In 2022, the amount of cross-subsidization of the Fund amounted to KZT918 billion. At the same time, KZT256 billion was the amount of capital investments for maintenance not covered by the tariff.
In general, 36 of the 143 activities of the Fund’s Group of Companies, or 25 %, are socially significant: gas sales to the domestic market, domestic passenger transportation and others.
The socially significant activities of the Fund are represented in all major sectors of the country’s economy, such as:
- providing citizens with gas and water;
- forwarding of parcels in the Republic of Kazakhstan, distribution of periodicals, payment of pensions and allowances;
- passenger transportation, cargo transportation in domestic traffic;
- domestic passenger air transportation;
- provision of telecommunication services;
- construction to strengthen the economy and the well-being of the people;
- support of domestic entrepreneurship and development of import substitution;
- charity.
Taking care of remote regions
The national company Kazpost JSC plays an important role in the economy of Kazakhstan and is a key player in the postal services market. The Fund is the guarantor of reliability and high quality of postal services provided. Kazpost JSC, which is part of the Fund’s Group of Companies, provides a wide range of services: postal, financial, agency and digital services, and also has a large number of branches throughout the country (more than 2 700 branches in all significant localities), which allows the population to easily access services anywhere in the country at the most low prices.
Kazpost JSC provides the population with demanded postal services at the lowest prices in the country. Thus, when providing services for the distribution of periodicals by subscription, the company incurs losses on their delivery in the village and city.
In addition to traditional postal services with the constant and irreplaceable work of postmen, Kazpost JSC provides financial services, which include the payment of pensions. The special service “Delivery 80 plus” allows pensioners over 80 years of age to use the service of free pension delivery. Postal operators at their sites deliver the money directly to the addressee GRI 203-2
Kazakhtelecom JSC continues to develop communications in rural areas. In two years, the Company has provided more than one and a half million rural residents with modern communication technologies. In 2023, it is planned to provide Internet to 142 more rural settlements through the deployment of an LTE network. Also for 2023–2024, the Company plans to develop a broadband network in rural areas. GRI 203-2
Open transport corridors and logistics
Railway transport is an important element of the country’s infrastructure, providing communication between cities and regions, as well as contributing to the development of the economy. Therefore, the government is trying to reduce the cost of train tickets in order to make travel more affordable for all segments of the population. One of the ways to curb the growth of tariffs is subsidizing the cost of tickets. At the same time, the cost of passenger transportation does not increase due to state subsidies (KZT38 billion)
During the reporting year, passenger turnover was more than 12.4 million pkm (30 % more than in 2021).
JSC NC Kazakhstan Temir Zholy is actively working to improve the conditions of passenger transportation. The company invests in the modernization of the passenger car fleet, including the purchase of new cars with more modern comfort and safety conditions. Thus, in 2022, 62 Talgo cars were added to the passenger railway fleet of Kazakhstan, and in the coming years, it is planned to purchase about 500 more new cars, which will allow updating a total of two-thirds of the cars. The production of new wagons will be organized in Kazakhstan on the past basis of the Tulpar plant (operating Stadler Kazakhstan LLP). An important aspect is the training of local personnel. Kazakh personnel of the Stadler Kazakhstan LLP plant will be trained at Stadler plants.
JSC NC Kazakhstan Temir Zholy also plays an important role in ensuring the socio-economic development of Kazakhstan by providing affordable transportation rates. At the same time, the level of tariffs in Kazakhstan for the main range of goods is several times lower than tariffs in Russia, Uzbekistan and other CIS countries. This allows Kazakhstani companies to save on transportation costs, which contributes to the development of business and the economy of the country as a whole. At the same time, JSC NC Kazakhstan Temir Zholy, as a national cargo carrier, retains the obligation to transport all cargo without the right to choose (both profitable and unprofitable).
JSC NC Kazakhstan Temir Zholy provides the supply of basic materials extracted and produced in the country at a discount for the needs of the domestic market in order to produce products of medium and high processing. In addition, JSC NC Kazakhstan Temir Zholy transports not only commercial goods, but also socially significant goods under special control, such as coal and grain, and also takes measures to strengthen ties with railways of other countries.
Within the national project “Strong Regions – the driver of the country’s development” and the Concept for the Development of Transport and Logistics Capacities by 2030, a project is implemented to Construction of a second track on the Dostyk-Moynty railway section, which will increase cargo traffic and the development of container transportation.
Work is also carried out to increase the transit potential of Kazakhstan, which made it possible to reach a historical maximum in transit in 2022.
Affordable air service for all categories of citizens
The national air carrier Air Astana JSC strives to contribute to the development of civil aviation in Kazakhstan and change the life of society for the better, adhering to the traditions of social responsibility and implementing charitable and sponsorship projects.
Air Astana JSC provides assistance by providing preferential air transportation for certain categories of citizens of the Republic of Kazakhstan. The airline is considering the possibility of providing free air tickets or discounts for children from poor families flying for treatment or surgery with oncological or cardiovascular diseases incurable in the Republic of Kazakhstan.
Since its Fund, Air Astana JSC has been helping WWII participants, citizens of the Republic of Kazakhstan, to travel around Kazakhstan and the CIS. The airline provides veterans with a 100 % discount on flights, excluding airport and other fees.
Another air carrier included in the structure of the Fund, QAZAQ AIR JSC, provides services for subsidized socially significant air transportation in the Republic of Kazakhstan. QAZAQ AIR JSC provides a special preferential fare for passengers from 16 to 22 years old, as well as over 60 years old. The regional route network of QAZAQ AIR JSC includes popular, socially important routes subsidized by the state in the following directions: from Turkestan to Kostanay, Uralsk, Aktobe, from Almaty to Zhezkazgan, from Astana to Taldykorgan and Pavlodar, as well as from Zhezkazgan to Karaganda.
Construction as the foundation of the economy and the well-being of the people
We are actively cooperating with government agencies and local authorities in order to address jointly issues related to the development of regional infrastructure, including the construction of affordable housing and social facilities. As part of this partnership, we participate in the development and implementation of government programs in various regions of Kazakhstan.
As part of this initiative, we invest our own and borrowed funds in construction. As of the end of 2022, we are holders of contracts for the construction of 12 residential buildings and one roofing and cladding materials plant. We also manage construction and real estate and participate in projects for the reconstruction of old and dilapidated buildings, participate in the state program for the construction of factories aimed at import substitution of building materials.
National project “Comfortable School”
The Fund performs the task of realizing the Action Plan for implementation of the pre–election program of the President of the Republic of Kazakhstan “Fair Kazakhstan – for all and for everyone. Now and forever” on the introduction of 1.5 million student places with comfortable learning conditions to solve finally the problem of overloaded classrooms, emergency schools and three-shift training.
We plan to build 401 new schools across Kazakhstan by the end of 2025. This will create more than 842 thousand modern student places and completely cancel the third shift. Schools will be built both in cities and in remote settlements in all regions of the Republic of Kazakhstan. The total amount of financing will be KZT26 billion. At the moment, the National project “Comfortable School” has been approved by the Decree of the Government of the Republic of Kazakhstan.
Support of domestic entrepreneurship and development of import substitution
The Fund and its portfolio companies that purchase goods and services from domestic producers play an important role in the economic development of the regions. In 2022, the amount of purchased goods, works and services amounted to KZT3 591 billion, and 92 % of this amount is accounted for by domestic suppliers.
Purchases from domestic suppliers of goods, works and services contribute to the creation of new jobs, the development of infrastructure, the growth of production capacity, the development of supply chains and the competitiveness of local companies. This, in turn, contributes to the economic development of the regions, increases the incomes of the population and reduces social tension.
To ensure equal access to procurement for existing market participants in 2022, taking into account the views of a wide range of stakeholders, we have made significant changes to procurement procedures aimed at supporting businesses, especially local producers and small and medium-sized businesses, expanding access and removing barriers to business, increasing transparency of procurement and minimizing corruption risks. In 2022, the share of local content in purchases was increased to 79 % (in 2021 – 77 %). Also, the grounds for purchases from one source were reduced by 44 %, the list of intra-holding purchases was optimized from 208 to 100 positions, which reduced non-competitive purchases.
Purchases from domestic producers also contribute to the development of national production and technological progress, reducing dependence on imports and strengthening the economic independence of the country. One of the mechanisms for supporting domestic producers is the Import Substitution Program, where the manufacturer undertakes to create a production of imported products, and the Fund ensures long–term demand for these products. The Fund approves on a quarterly basis a list of goods for which there is a long-term need for net imports. The program proposes to establish production in Kazakhstan.
As part of implementation of the Import Substitution Program aimed at creating new, unparalleled productions in Kazakhstan, from 2018 to 2022, the Fund’s companies have concluded 331 offtake contracts totaling KZT101.4 billion. At the same time, 139 offtake contracts totaling KZT19.2 billion were signed in 2022. The conclusion of offtake contracts allowed for the first time in Kazakhstan to establish the production of transformers and shunting reactors (Asia Trafo LLP) and other goods.
Contributing to the promotion of a sustainable and responsible business that complies with the sustainability principles, we have started implementing ESG criteria in several areas of our procurement activities. One of the main directions is consideration of applications from potential suppliers for the implementation of projects within the framework of the Program to Promote the Creation of New Production facilities, according to the approved Procedure for concluding and executing offtake contracts. The evaluation of projects is an important stage in the consideration of applications, and it directly affects the approval by the Commission of the Fund for the further conclusion of an offtake contract with the supplier.
The evaluation of projects includes such ESG criteria as: the use of “green” renewable energy sources (wind farms, nuclear power plants, hydroelectric power plants, solar power plants and renewable sources of electricity) in the life cycle of the goods produced (production of goods, purchase of raw materials, delivery, sale, use, disposal, etc.), including a sign of planned production goods (goods that reduce emissions of greenhouse gases and pollutants), as well as the use of other technologies to reduce the carbon footprint.
Obligations under subsurface use contracts
The Fund’s portfolio companies, within the framework of subsurface use contracts, finance socially significant facilities, construction of sports complexes, socio-economic development of the region, etc. Thus, the subsoil use contracts of the subsidiaries of JSC NC KazMunayGas provide for the allocation of significant funds for the development of the regions of production presence and social assistance to the needy segments of the population, as well as on the basis of agreements and memoranda concluded with the akimats of the regions, portfolio companies transfer funds to local executive bodies, which, based on the needs of local communities, distribute funds.
Paying great attention to the development and training of the younger generation and youth in the regions of its presence, JSC NAC Kazatomprom, within the framework of corporate volunteering and career guidance, has been organizing an information camp on the development of SANA leadership potential for schoolchildren since 2020. The main goal of the camp is development of personal competencies and leadership qualities, emotional intelligence through educational and informational events for students.
We provide an opportunity for students of various universities to undergo practical training and paid internships. Thus, in 2022, 2 students of the L.N. Gumilev Eurasian National University, as well as 6 students of other universities, completed an internship at the Fund, 741 people studying at universities in Kazakhstan and abroad, completed an internship at the Fund’s production facilities in the areas of petrochemistry, energy and nuclear industry (Kazakh-British Technical University JSC, S. Utebayev Atyrau University of Oil and Gas, Satbayev University, etc.).
97 people have completed a summer internship at the Fund’s production facilities as part of a Summer School in the fields of petrochemistry, energy and nuclear industry.
JSC NAC Kazatomprom traditionally cooperates with universities and specialized colleges of the Republic of Kazakhstan, as well as with educational institutions of neighboring countries, in the specialties of the nuclear industry (K. Satpayev KazNITU, D. Serikbayev EKSTU, M. Auyezov SKSU, National Research Tomsk Polytechnic University, National Research Nuclear University MIFI, Moscow State Institute of Electronics and Mathematics and others). Within the framework of this cooperation, JSC NAC Kazatomprom trains employees in master’s degree programs, as well as individuals who are not in labor relations with JSC NAC Kazatomprom and its enterprises in bachelor’s degree programs.
Charity
We continue to contribute to the social development of the country through charitable activities and corporate sponsorship, as well as the promotion of corporate volunteering. In 2022, within the framework of the current charity project “Zhenis”, volunteers, including employees of the Fund’s portfolio companies, provided assistance to veterans of the Great Patriotic War and home front workers in the Kostanay region. Our employees participate in various external social initiatives and actions, such as holding concerts for nursing homes for the elderly and disabled in the Pavlodar region and in the villages of the Ekibastuz region, participating in the Biz Birgemiz campaign, the World Cleanup Day campaign and others. GRI 203-2
During the fires in Kostanay region, our employees provided assistance to the residents of the region. JSC NC Kazakhstan Temir Zholy presented fire trains, Kazpost JSC provided delivery of humanitarian aid, Samruk-Kazyna Trust CF allocated extraordinary grants for NGOs of Kostanay region to finance social projects to help victims, within the framework of the current charity project “Zhenis” volunteers provided assistance to WWII veterans and home front workers in Kostanay region, the medical train “Salamatty Kazakhstan”, launched by the Samruk-Kazyna Trust CF, provided medical assistance. Kazakhtelecom JSC has completely freed residents of Auliekol district from subscription fees and implemented a project to restore networks in Kostanay region, providing a new microdistrict “Birlik” in the village of Auliekol with modern telecommunications services. The newcomers used the services for free until the end of 2022.
Samruk-Kazyna Trust
n our charitable activities, we give priority to projects aimed primarily at improving the socio-economic situation of the regions and improving the quality of life of the local population, covering the maximum number of people.
These projects are implemented on behalf of the entire Fund group by a single charity operator of the Fund – Samruk-Kazyna Trust CF in close cooperation with the Fund’s portfolio companies, with the population, public and local executive authorities. The initiators of the projects are both portfolio companies and non-governmental organizations. The activity is carried out with the involvement of experts in the field of public and social policy. Charity is carried out on the basis of the principles of legality, equality, voluntariness and publicity. In order to ensure the openness of the decisions taken, potential users had the opportunity to participate and speak at the meetings of the Board of Trustees online. Samruk-Kazyna Trust CF regularly reports to the Public Council of the Fund and the media on the work done. On a regular basis, explanatory work is carried out with stakeholders regarding the regulations, norms, rules for implementation of charitable activities. In 2022, about 700 calls were received, 80 meetings were held with the general public, NGO representatives, journalists, opinion leaders, and employees in 8 regions with a total of more than 600 people.
The 2022 was declared the “Year of Children” by the Head of State. In this regard, our efforts were primarily aimed at supporting children in the regions of our country. During the year, 43 social projects were implemented, about 500 thousand people received assistance, including from socially vulnerable segments of the population and children, of which 95 thousand people from rural areas and 55 thousand children. 624 people have been provided with job due to implementation of projects. Among the key initiatives are the organization of medical trains for residents of the regions, adaptive sports for special children, as well as the supply of hypothermic devices for resuscitation of infants in maternity hospitals. Within the framework of the directions of the Charity Program, projects were implemented in the following areas:
- in the direction of “assistance to people, communities in the social and medical sectors”, 23 projects were implemented for a total amount of KZT5 788 million;
- in the direction of “development of media, cultural community, human potential development”, 14 projects were implemented for a total amount of KZT1 376 million;
- in the direction of “implementation of the regional social investment program in the regions where the Fund Group operates”, 6 projects were implemented for a total amount of KZT2 839 million;