Kazakhstan and South Korea signed $5 billion worth of long-term energy and technology agreements on Wednesday in a move allowing South Korea to increase its presence in the oil-rich Central Asian nation. The agreements, signed during the visit of President Lee Myung-bak to the former Soviet republic, include deals in power, technology and other sectors, a Kazakh official said, Reuters reported.
"We estimate the agreements are worth more than $5 billion," Kairat Kelimbetov, head of the Kazakh state Samruk-Kazyna holding, told reporters on the sidelines of the visit.
"That is not an immediate investment but will be actively invested in Kazakhstan over the next three to five years."
The agreements include participation by a South Korean consortium in a $2.5 billion power plant in Kazakhstan. Kelimbetov said the project's overall cost was $4.5 billion.
Under the deal, state-run Korea Electric Power Corp (KEPCO) (015760.KS) and building company Samsung C&T (000830.KS) will hold a 65 percent stake in the Balkhash project. Samruk will hold 25 percent, and London-listed copper major Kazakhmys (KAZ.L) will have 10 percent.
The plant, to be built in southern Kazakhstan, is scheduled for completion by 2014 and will have a power generation capacity of between 1,200 and 1,500 megawatts.
Kelimbetov said Samruk would also set up a joint venture with another consortium of South Korean companies to invest about $1 billion in Kazakhstan's power and coal mining sectors but gave no details.
"South Korean companies have plenty of experience in industrial production," he said, adding the two nations would also cooperate in the technology and Internet promotion.
Kazakhstan's ambition is to diversify its economy, currently heavily dependent on oil, and develop new sectors and modernise its Soviet-era infrastructure. South Korea, for its part, is keen to gain access to Central Asian energy sources.
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