-   The UNDP-GEF project The name of the project is: "Derisking renewable energy investment" has been working in Kazakhstan for the past few years. What tasks were set for the project and what was achieved?

-   The project The name of the project is: 'Derisking renewable energy investment" is a joint initiative of the United Nations Development Program (UNDP) in Kazakhstan and the Ministry of Energy of the Republic of

Kazakhstan, funded by the Global Environment Facility (GEF). The total budget of the project is $4.6 million, $2 million of which is provided for stimulating small and medium-sized businesses.The objectives of the project include assisting the Ministry of Energy in developing and amending the country's Legislation to promote renewable energy SOU rces (RES) as well as introducing pilot mechanisms for SMEs interested in using RES technologies for their own needs. The pilot projects are implemented jointly with the "Damu Entrepreneurship Development Fund" JSC, which is also a partner of the Project under the Cooperation Agreement between UNDP and "Damu".

One of the important achievements of the initiative is the proposal and implementation of the pilot project "Site-specific RE auction". During the auction, participants offer the lowest tariff per kWh of "green energy", considering, firstly, the amount of energy intended for purchase by the government, and secondly, the location proposed by the potential investor for the construction of the plant. The "proposed" location of the facility carries additional risks (uncertainties) for the investor.

For their part, the auction participants must consider the cost of the generated energy. For example, the area may have its own characteristics (e.g. marshy area, or grid-crossing area), and all this leads to additional unexpected costs for the investor, increases the cost of the project and restricts it if the tariff price is reduced during the auction.

This mechanism has proven to be successful, now the Ministry of Economy of the Republic of Kazakhstan uses it independently.

Another promising area of the project is development and implementation of financial instruments for renewable energy projects. We are talking about subsidizing instruments and "green" bonds, which were first issued in Kazakhstan in 2020. Thus, with issue and placement of the first "green" bonds, the Da mu Fund attracted funds from the market to finance renewable energy projects through second-tier banks. Further, these funds were used to finance SMEs that implement renewable energy projects.

The role of the UNDP-GEF project in this process was to classify and select possible small-scale renewable energy generation projects, to create a so-called taxonomy catalogue. Thus, the initial reduction in the cost of borrowed funds allowed second-tier banks to provide funds for the final borrower, that is, SMEs on preferential terms.

Thanks to such "green" investments, a solar power plant with a capacity of 1 MW was launched in the Turkestan region.

"Green" bonds, issued with the UNDP support, are another step in the country's transition to a low-carbon economy based on energy efficiency, reduction of greenhouse gas emissions and a higher share of renewable energy,

This financial instrument is expected to contribute to the country's environmental goals of increasing the share of alternative and renewable electricity to 50% of total energy generation by 2050.

-The UNDP-GEF project in the professional environment is associated primarily with the development of small-scale RES. The project has done a lot of work on the preparation of regulatory changes for the development of this segment. What are the advantages of developing distributed generation? Why do the developed measures not find a resonance in government agencies?

- Currently, there is a global trend towards decentralization of the energy sector. The transition to renewable energy is a global trend, and its development is facilitated by the improvement of technologies, availability of financial opportunities and various incentive programs, as well as public awareness of environmental issues.

According to the latest report of the International Energy Agency, in 2018 the total installed capacity of rooftop solar installations (with a unit capacity of up to 10 kW) reached 58 GW, and this figure is planned to be increased 2.5 times by 2024.

For example, in Germany, the total capacity of distributed generation (SES) was 33 GW, while the installed capacity of home installations was 6.5 GW, and the capacity of commercial and industrial installations

that small and medium-sized businesses install for their own needs was 26.5 GW (more than 60% of the total instal led capacity of the country's solar stations).

In Japan - 34 GW, of which 9 GW are home installations, in Italy - 16 GVV, of which 4.2 GW are home installations. Moreover, these data are relevant only for the electricity supply sector.

It is obvious that there is already a steady trend to increase the total installed capacity of decentralized systems, both commercial and industrial, and installations for households.

It should be noted that for consumers, the use of small-scale renewable energy projects carries a lot of positive aspects. Firstly, the cost of the generated electric energy will not depend on the cost of energy carriers. Secondly, reducing energy consumption and, as a result, saving resources in the medium and long term. Thirdly, improving the comfort of living and fire safety.

Of course, with current cost of electric/thermal energy, the use of such systems will be economically unprofitable without special support measures, but in the medium term the use of these systems will be more than justified.

The simulation of the regional distribution network has shown quite interesting results. Thus, the connection to the electrical network of home installations of solar power plants, on a regional scale, will contribute to improving the reliability of the network as a whole, unloading overloaded nodes and reducing electrical energy losses. At the same time, the implementation of projects of rooftop solar instal lationsin only 5-10% of households in the country will be equivalent to the construction of a large thermal power plant with a capacity of 500-1,000 MW.

Some of the proposed measures have not yet been supported, this, on the one hand, may be due to a general misunderstanding of both the potential volumes of renewable energy capacity in these segments and the ultimate benefits for all stakeholders -the population, the business community and the government, and on the other hand, the existing tariff system in the energy sector and the need to provide targeted help. It is important to emphasize that the country has set goals to achieve carbon neutrality by 2060. However, if the widespread use of various renewable energy and energy efficiency technologies for hot water and heating is not stimulated, the household segment will not be carbon neutral, especially in rural areas. Thus, according to the Bureau of National Statistics, the level of improvement in terms of "central hot water supply and heating in rural areas" is only 3-4%.

It should be noted that distributed generation projects are practically the only possible and economically feasible

way to decarbonize the heat supply sector of individual and autonomous systems (projects of centralized heat supply networks in rural areas are practically unrealizable).

For the implementation of distributed generation projects at the initial stage and in the short term, it will be necessary to set target indicators, including for the heat supply sector by analogy with the share of RES in the production of electric energy. Clear and understandable target indicators will allow, firstly, monitoring the achievement of the country-wide goal of reducing GHG emissions

by 2030 and reducing the energy intensity of the economy; secondly, planning and implementing various incentive measures, which in the Long term will provide systematic approach to carbon neutrality by 2060 in the segment of households and in the heat supply sector in the area not covered by central networks.

-The task of any institute or project aimed at developing is to develop a turnkey solution and leave it to the recipient for further use or scaling. Is there such an understanding in the case of site-specific RE auction and implementation of measures to subsidize rates for the introduction of renewable energy technologies through the "Damu"?

- Our project has tasks to develop an exit strategy, for example, in the case of site-specific RE auction, The project was prepared and the mechanism for the development/preparation and holding of such auctions was handed over to FSC LLP, now the FSC LLP itself is working in this direction. After the test issue of "green" bonds together with the Fund "Damu", it can be noted that the rules on subsidizing "green" bonds by the government were included in the LSI. A strategy is also being developed to exit from the financial support mechanisms for Srvl Es a nd transfer the mechanism itself to the Damu Fund. To do this, the project team is constantly working on training the fund's staff on financing "green" projects (RES and EE).

-   As far as we know, a meeting of the Project management committee (PM C) was held recently. What decisions have been made? How do the donors of the project - UNDP and GEF - assess its interim results?

- It is important to note that UNDP is not a donor of the project, but is engaged in its implementation, with funding from the GEF. The national partners highly appreciated the positive impact of the project on the further development of the renewable energy sector, including the segment of small-scale renewable energy projects.

The project, together with partners, will continue to work in the following areas: improving Legislation on renewable energy support and testing financial instruments together with the Damu Fund.

In addition, at the meeting, the members of the PMC proposed to develop a mechanism for redistributing payments for emissions into the environment. It should be mentioned that the amended Environmental Code of

the Republic of Kazakhstan require that payments for emissions into the environment be directed to solving environmental issues in full. Previously, there was no such requirement and akimats could spend this money on any other activities in their territories.

In turn, we will help develop some kind of action plan, methodology or mechanism for a ki mats, how to redirect these

payments to "green" measures for the implementation of renewable energy and EE projects.

Currently, Almaty region is being considered for the implementation of "green" projects and as a possible pilot.

-   One of the important decisions is the prolongation of the project fora year and a half. What tasks does the project set for itself within the remaining time for implementation?

- During the remaining time of the project implementation, testing of financial mechanisms and tools will continue; conducting various activities to raise awareness and knowledge in the field of renewable energy for various target groups; development of the exit strategy together with the Damu Entrepreneurship Development Fund JSC,

-   Thank you for the interview.