Navigating Kazakhstan’s $11.6 Billion Climate Funding Gap

In 2023, Kazakhstan adopted an ambitious strategy to become carbon-neutral by 2060. This document outlines significant transformations across the economy, technology, and society to achieve a green future.

But these big plans require significant funding.

According to calculations, Kazakhstan will need around $610 billion in total investments to achieve carbon neutrality by 2060. Yet, direct state funding will cover only a small portion—about 3.8% of this amount.

Here’s how investments will be distributed:

• ⁠ ⁠60.7% for electricity and heat generation;
• ⁠ ⁠10.8% for transport;
• ⁠ ⁠7.4% for energy efficiency improvements;
• ⁠ ⁠5.5% for agriculture;
• ⁠ ⁠15.6% for other sectors.

Out of the total $610 billion, around $386.3 billion is expected to come from shifting existing investments away from high-carbon sectors into low-carbon sectors. The remaining $223.7 billion should be completely new investment funds.

However, while Kazakhstan has a clear long-term investment plan up to 2060, there is still significant uncertainty regarding the medium-term horizon up to 2030. The long-term goals are carefully calculated, but detailed financial estimates to achieve the near-term targets (reducing greenhouse gas emissions by 15% unconditionally, or up to 25% with international support by 2030 compared to 1990 levels) are missing.

This creates a gap in financial planning. Without clear funding sources and implementation tools for intermediate targets, the climate policy faces serious risks of not being effectively implemented.

To fill this gap, experts conducted an assessment of financing needs up to 2030.

Currently, Kazakhstan spends around $2.4 billion annually on climate projects. This amount includes:

• ⁠ ⁠$1 billion from the state budget (marked as climate-related);
• ⁠ ⁠$0.55 billion from domestic private investment;
• ⁠ ⁠$0.4 billion from Foreign Direct Investment (FDI);
• ⁠ ⁠$0.45 billion from international development aid.

By 2030, the total expected financing is about $9.1 billion (state budget – $1.4 billion, domestic investments – $4 billion, FDI – $2.8 billion, international aid – $0.9 billion).

Yet, Kazakhstan needs about $20.7 billion by 2030 to reach its stated climate targets. That means there is a financing gap of roughly $11.6 billion—more than half of what’s required. In other words, at the current investment pace, Kazakhstan will cover less than 45% of the money needed to achieve its climate goals.

Part of this gap is being addressed by developing the sustainable (green) financing market. Kazakhstan has been actively building this market since 2019, showing steady growth. As of July 2025, sustainable financing instruments in the country totaled 982 billion tenge, distributed as follows:

• ⁠ ⁠Social bonds: 585 billion tenge (60%);
• ⁠ ⁠Green bonds: 229 billion tenge (23%);
• ⁠ ⁠Sustainability bonds: 100 billion tenge (10%);
• ⁠ ⁠Green loans: 68 billion tenge (7%).

However, this amount is still insufficient.

A major challenge is the lack of clear market incentives and regulatory signals. For example, Kazakhstan sets the price for carbon emissions administratively at around $1 per tonne of CO₂. This low price does not create enough incentive for companies to reduce emissions or adopt cleaner technologies.

Another example is the underdeveloped domestic carbon credit (offset) market. Without a functioning market, large businesses continue using traditional, carbon-intensive technologies.

Addressing the financing gap requires more than isolated measures—it needs a comprehensive carbon regulatory system. Such a system should include:

• ⁠ ⁠Transparent mechanisms for monitoring, reporting, and verification (MRV);
• ⁠ ⁠A national market-based emission trading scheme (ETS);
• ⁠ ⁠A carbon tax mechanism for sectors not covered by the ETS;
• ⁠ ⁠Dedicated financial infrastructure, including a Carbon Fund;
• ⁠ ⁠Clear classification (taxonomy) of climate projects;
• ⁠ ⁠Green financing mechanisms and sustainable public procurement.

All these elements must be integrated into a single digital platform to ensure timely and coordinated decisions.

Only by establishing this comprehensive approach can Kazakhstan realistically attract sustainable investments and move from mere declarations to genuinely achieving a low-carbon future.