Heat supply in north regions of Kazakhstan is the most relevant issue due to climatic conditions. If, in average for the republic, heating season ends in the middle of April, then, for example, in Petropavlovsk it continues until the beginning of May. Besides, an obsolescence and deterioration of heating networks, as well as above-standard losses increasing from year to year are illustrative for the whole heat supply system of the republic. This is precisely why the increased attention is given to heat supply reliability in the Group of Companies of CAEPCO, JSC. In 2017, we have scheduled a large scope of work on modernization of heating networks in Ekibastuz, Pavlodar, and Petropavlovsk. Also, works on modernization of generating equipment at CAEPCO's facilities will continue the current year.

It is clear that heat supply is the most socially important segment in the power industry. Pipelines of heat supply systems in cities of Kazakhstan that had been laid as early as in the Soviet times were used 30-40 years, and, at the present time they do not cope with increasing demands of the region for heat energy. Modernization of such infrastructure facilities requires capital investments. From 2011 to 2015, the Group of Companies of CAEPCO, JSC implemented a project with the total value of 50 million US Dollars under the auspices of the European Bank for Reconstruction and Development (EBRD) and Clean Technology Fund. In the result, level of above-standard losses when transmitting the heat energy in Pavlodar, Ekibastuz, and Petropavlovsk reduced by more than 30%.

In 2016, this area of focus received a fresh impetus after signing a trilateral agreement on implementation of projects on heat supply system modernization between EBRD, the Ministry of National Economy of the Republic of Kazakhstan, and subsidiaries of CAEPCO, JSC within the "Nurly Zhol" infrastructure development state program. Total amount of investments in modernization of the heat supply systems of Pavlodar, Ekibastuz, and Petropavlovsk for the period from 2016 to 2020 will be 25.95 billion KZT. The signed trilateral agreement is aimed at modernization of heating networks in order to reduce level of their deterioration, reduction of heat energy losses at transportation, and complete elimination of above-standard losses by 2020, as well as at the enhancement of reliability of consumer heat supply. Financial means provided by EBRD consist of two loans of 4.65 billion KZT each for subsidiaries of CAEPCO, JSC – Pavlodar Heating Networks, LLP and Petropavlovsk Heating Networks, LLP. The enterprises will raise the finances in the amount of 9.3 billion KZT under the "Nurly Zhol" state program. In return, CAEPCO, JSC will allocate 7.35 billion KZT to implement the projects. I'm sure that such partnership will have a positive result: implementation of all planned events will help to increase energy efficiency, reduce losses, and improve environmental standards of the heat supply sector.

Enterprises of heating networks of the Group of Companies of CAEPCO, JSC have already set about the implementation of the agreement. Works on all above mentioned areas of focus are carrying out in an integrated manner. Measures for the enhancement of heat supply reliability include replacement of pipelines of the existing heating mains with preinsulated pipes of greater size with polyurethane foamed coat (PPU). In 2017, construction and modernization of pipelines with the extension of 31,88 kilometers and restoration of insulation using PPU at pipelines with the extension of 6.74 kilometers is planned.

In 2017, the investment program will also continue at generating facilities. Since 2016, modernization of the turbine generator set No.6 with the augmentation of rated output power from 110 to 125MW is one of the important projects at CHP-3 of PAVLODARENERGO, JSC. A main part of this work will be performed the current year. Completion and commissioning of the turbine generator set are scheduled for 2018. Also, works on equipping the boiler unit No.4 with an automatic process control system, which will allow increasing efficiency by 1.5% and reducing consumption of consumable fuel and environmental emissions, are currently being performed at the Pavlodar CHP-3. A similar automated system will be also introduced at the turbine generator set No.2 of the Petropavlovsk CHP-2 of SEVKAZENERGO, JSC. In 2017, works on modernization of a discharge device are planned at the same station in order to increase productivity and coal discharge rate.

All measures in progress are aimed at increase in and improvement of performance parameters. In 2017, the Corporation plans to increase generation of electric energy by 6.9% in comparison with the actual figures of 2016 – up to 7526 million kWh and heat energy output by 0.1% in comparison with the actual figures of 2016 – up to 6477 thousand Gcal, due to scheduled volumes of heat energy for consumers.

This year, we will also continue the work on development of occupational safety, environmental policy, and social partnership projects. These areas of activities are under the constant control of controlling authorities at all enterprises of the Group of Companies of CAEPCO, JSC. Implementation of all planned projects complies with the Corporation's mission on improvement of the quality of consumer life and creation of condition for economic development of regions.