Kazakhstan faces the dual challenge of providing affordable housing for a growing population and addressing significant environmental concerns due to inefficient district heating networks powered by coal plants. To address these challenges, the Kazakhstan Housing Company (KHC), supported by the Asian Development Bank (ADB) and BASE, is promoting energy-efficient, affordable residential buildings. BASE is part of ADB’s expert team looking at optimising building designs that meet both KHC’s cost requirements and ADB’s green criteria.
The role of BASE is to focus on developing new de-risking mechanisms to ensure the proper implementation of energy-efficient measures and standards, particularly in a construction industry still becoming familiar with these green concepts. BASE is also addressing this issue by supporting ADB in adapting the Energy Savings Insurance concept.
The recommendation is to evolve the existing “Construction Completion Guarantee”—a government mechanism similar to a surety bond that covers the risk of building completion—into a “Green Guarantee.” This recommendation is subject to feedback, and if accepted, it will take approximately 1.5 to 2 years to be implemented. This new guarantee will not only ensure the completion of construction projects but also incorporate energy efficiency and sustainability standards. BASE is also assisting KHC in developing a network to inform international reinsurers about the Construction Completion Guarantee that KHC is introducing to the housing industry, and also about the Green Guarantee concept, providing reinsurers with an opportunity to expand their reinsurance services into the Kazakh market.
The project involved several key activities aimed at developing and implementing the Green Guarantee Instrument, such as analysing the existing KHC guarantee framework, incorporating green building certification standards, construction quality tests related to the skin and structure energy efficiency, and the definition of a compensation mechanism for buyers in case developers fail to meet the required standards. Stakeholder engagement and capacity building have been also conducted among project developers, reinsurance companies, and banks to obtain feedback on the accessibility and feasibility of the proposed Green Guarantee Instrument.
These training sessions and meetings also explored collaboration opportunities for implementing the new instruments.
