Letter from the Chairman
of KEGOC’s Board
of Directors

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Almassadam Satkaliyev

Chairman of KEGOC’s
Board of Directors

Dear partners,

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The year 2019 for KEGOC, as well as for the entire electric power industry of Kazakhstan, began with the electric capacity market going live as part of the implementation of the government’s ‘100 Concrete Steps Plan’.

The role of the single buyer at the electric capacity market was assigned to KEGOC’s subsidiary, Financial Settlement Centre for Renewable Energy Support LLP. The main purpose of the capacity market is to ensure the balance in the power system of Kazakhstan. This shall also enhance the investment appeal of the industry by providing long-term guarantees for investors, as well as the reliability of the unified power system (UPS) of Kazakhstan through the accelerated development of generation.

Last year KEGOC showed high performance in managing the business processes, effectively reaching its strategic goals, and delivering its functions of the UPS operator and maintaining the robust financial standing.

The reliable operation of the UPS of Kazakhstan, that is, the quality delivery of the functions of the system operator, is the top priority of our company. It requires quality maintenance, repair, and modernization of existing assets, as well as investment in development of the infrastructure. To this end in 2019, the Board of Directors of the company approved key parameters and gave a ‘go’ to implementation of West Kazakhstan Electricity Transmission Reinforcement Project and a project for Rehabilitation of 220-500 kV OHTLs in Aktyubinskiye MES branch, Zapadnye MES branch and Sarbaiskiye MES branch of KEGOC.

The second strategic goal is to ensure the efficient operation of KEGOC. In 2019 the company updated the Portfolio and Roadmap of the Business Transformation Programme. The benefits from the implementation of the projects of the Business Transformation Programme in 2019 amounted to KZT 2.16 billion.

Another strategically important area of further improvement is the quality of corporate governance and the sustainable development of the company. Last year the company approved the corporate governance action plan of KEGOC for 2019–2020 and successfully implemented all activities that were planned for 2019.

The reporting year showed high performance of the Board of Directors in delivering quality management decisions with due account the interests of all stakeholders. The company was committed to the best standards of corporate governance and the principles of transparency.

The good reputation of the company, its consistently high financial performance, respect of the rights and interests of shareholders supported the growth and high liquidity of KEGOC’s shares on the market. In 2019, the price of one share increased to KZT 1,613.5 with an occasional maximum of KZT 1,712.9, which is a historic high and almost 3.3 times of the initial offering price. In 2019, the company paid about KZT 31.6 billion in dividends, which is also the historic high since the IPO.

On behalf of the members of the Board of Directors of KEGOC, I would like to thank all our partners for the fruitful cooperation, the shareholders for their support, and the team for the quality delivery of all the goals set by the Board of Directors and their contribution to the efficient and reliable operation of the industry.

I am sure that the consistent operational and financial results of 2019 will become the foundation for the success of the company in the coming period.

Our
strategic
priorities