Putin visit to Kazakhstan fails to clarify nuclear power plant financing issue

When can a deal involving Russia be considered as done? When it comes to Russia’s agreement to build Kazakhstan’s first nuclear power plant, it is hard to determine.

Kazakh officials announced almost a year ago that Russia’s nuclear energy entity, Rosatom, would build Kazakhstan’s first nuclear plant on the shores of Lake Balkhash. Yet on May 28, Russian leader Vladimir Putin, on a state visit to the Central Asian country, signed an agreement covering the “basic principles and conditions of cooperation” concerning the nuclear power project.

Despite the announcements and agreements, the main question surrounding the power plant’s actual construction still lacks a clear answer: where is the money to build it coming from?

An Interfax news agency report put the price tag of the Lake Balkhash plant at $16.4bn, including the building of necessary infrastructure in the surrounding area. According to the May 28 agreement, the Russian state will extend credit to cover most of the project’s expense. But financing details have not been disclosed.

Interfax quoted Rosatom chief Alexei Likhachev as saying Russian credit will account for “most of the volume of investment … but not for all; part will remain with the Kazakh side”. Earlier, unconfirmed estimates put the Russian share of construction at about 80-85%.

The lack of specifics raises questions about the Kremlin’s ability to deliver on its financing promises. The burden of maintaining the country’s war effort in Ukraine is quickly sapping Russia’s financial resilience. The Russian government recently slashed its economic growth forecast for 2026 to a meagre 0.4%, down from 1.3%. The Kremlin’s cash reserves are rapidly dwindling and the government this year has increasingly turned to dumping gold on international markets to raise cash.

During a joint news conference with Putin, Kazakh President Kassym-Jomart Tokayev glossed over questions about financing, instead emphasising that the Lake Balkhash power plant “will become a locomotive for scientific, educational and technological cooperation, and will ensure the development of new related sectors of the energy sector and the industry as a whole”.

Perhaps tacitly recognising that Russia in a weakened state is potentially more apt to lash out in other directions, Tokayev seemed to make an extra effort to solicit Putin’s favour, lavishing fawning praise on the Kremlin leader. At one point, Tokayev turned to Putin and said: “As an outstanding statesman, a politician of a global scale, you consistently pursue a policy aimed at strengthening Russia's status as a great power.”

“You are leading the country in the most difficult period of the total restructuring of the modern world order, fulfilling with honour and dignity a mission that is of fateful importance for the Russian people and the Russian state,” Tokayev added.

Tokayev has good reason to go out of his way to keep Kazakhstan on Putin’s good side. As Tokayev himself noted, the two countries share “the longest border in the world,” a fact that gives Russia ample opportunity to disrupt Kazakhstan’s social and economic conditions, if Astana ever falls out of favour with Moscow.

Given the long border, “eternal friendship, stable good-neighbourliness, mutual trust are not propaganda slogans, but the very essence of the peaceful existence of our peoples,” Tokayev stated.

This article first appeared on Eurasianet here.