Kazakhstan: Support to the government for ICT sector strategy as it relates to attracting PPI

Kazakhstan faces significant challenges in expanding access to high-quality and affordable digital connectivity. With over 40 percent of the population in rural regions, telecom operators struggle with the high costs of deploying infrastructure across Kazakhstan’s vast and sparsely populated territory. This has led to a pronounced rural-urban digital divide. 

The country’s institutional environment constrains competition and private investment in the sector. The telecom market is dominated by state-backed operators such as KT Corporation, which held 66 percent of the market in 2021. Additionally, Kazakhstan lacks an independent telecom regulator—the Ministry of Digital Development, Innovation and Aerospace Industry provides oversight of the sector.

To address these issues, the World Bank is launching a new project to mobilize private capital to deploy climate-smart broadband networks. The project will provide matching grants to qualified internet service providers and mobile operators to co-fund infrastructure deployments in underserved areas.

PPIAF will support this effort by informing the design of the grants scheme and conducting market outreach to the private sector. This will help maximize the impact of the World Bank project in catalyzing private investment.

In parallel, the government of Kazakhstan is working to improve international connectivity and cybersecurity through a new subsea cable linking Kazakhstan with Azerbaijan. Backed by funding from the GIF, preliminary studies and market research have been undertaken for this trans-Caspian cable project.

By boosting international capacity, this new infrastructure can enhance connectivity in Kazakhstan and reduce dependence on routes through Russia.

PPIAF and the World Bank aim to transform Kazakhstan’s digital landscape through this multifaceted engagement. By mobilizing private capital and expertise, they can help the government expand access to high-quality broadband for millions of underserved citizens. At the same time, support for emerging infrastructure like the Caspian cable will fortify Kazakhstan’s long-term digital development efforts.

Approved date2023-06-12
RegionEurope & Central Asia