STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan

1. STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan Ministry of Industry and New Technologies of the Republic of Kazakhstan

2. KEY PERFORMANCE INDICATORS STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan INCREASE BY 2015: GDP by 50% of the 2008th GDP; Productivity in manufacturing industry by no less than 1.5 times; Share of the manufacturing industry in the structure of GDP to 12.5%; Share of non-raw materials exports in the total volume of exports to 40%; Share of innovative enterprises in the number of active enterprises to 10%; DECREASE BY 2015: Energy intensity of GDPby no less than 10% of the 2008th.

3. PRIORITY SECTORS OF THE ECONOMY STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan Traditional Mining and Metallurgical Complex Atomic industry Chemical industry Petrochemicals Based on domestic demand Machinery Construction industry Pharmaceuticals Export-oriented Agro-industrial complex Light industry – FES «Ontustik» Tourism - FES «Burabai» Sectors of «thefuture economy» Information and Communication Technology Biotechnology Alternative Energy

4. PROGRAMS OF MULTIPLE SUPPORT STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan BUSINESS ROAD MAP 2020: Development of small and medium enterprises Interest rates subsidies on loans; Development of production (industrial) infrastructure. EXPORT 2020: Promotion of domestic companies on foreign markets Grants for exporters; Trade finance and export insurance; Export support services. PRODUCTIVITY 2020: Improving efficiency through cost reduction Subsidized interest rates on leases and loans; Innovation grants; The introduction of new products for production. INVESTOR 2020: Foreign investment attraction Exemption from customs duties; State natural grants; Tax incentives in FEZ; Measures from BUSINESS ROAD MAP 2020

5. ATTRACTING FDI: “ONE-STOP SHOP” SERVICES STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan Information on investment opportunities and business conditions Rendering assistance in a choice of projects and partners Information on investment projects JSC «National agency for exports and investment «KAZNEXINVEST»provides “ONE–STOP SHOP” services Organization of meetings with official representatives Rendering assistance in reception of measures for state support Assistance in making decisions on administrative questions

6. STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan MINING POLICY Mining policy principles: Resource support for SPAIID projects Promotion of the use of technology for the production Transition to high value added production Enhancement of contractual obligations monitoring Total – 5004deposits Groundwater - 1285/1028Hydrocarbon raw -259 Solid Minerals -839 Widespread minerals -2624

7. STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan DEVELOPMENT OF LOCAL CONTENT By 2014, increase the share of local content to 60% Competitive advantages Prioritized procurement; Use of “conditional discounts”; Minimum long-term public order Participation criterion Production in Kazakhstan; Status of Kazakhstani producer (certificate CT-KZ) Entrepreneur

8. 38% 62% STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan MINING AND SMELTING COMPLEX Niche projects: Non-ferrous metallurgy Alumina – 1500 thou. Tons.; Primary Aluminum – 250 thou.tons.; Copper – 578 thou. Tons.; Zinc – 36 thou.tons.; Ferrous metallurgy Steel – 6000thou. Tons.; Ferrochrome and Ferrosilicochrome – 440 thou.tons.; Granular iron – 500 thou.tons.; Briquetted iron – 2800 thou.tons.; Waste dumps recycling Industrial waste – 20 billion tons.; Non-ferrous metallurgy – 10.1 billion tons.; Ferrous metallurgy – 8.7 billion tons.

9. STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan CHEMICAL INDUSTRY Niche projects: Basic inorganic chemistry Potash – 400 thou. Tons; Soda – 350 thou.tons.; Sodium cyanide – 100 thou.tons.; Basic organic chemistry Polyvinylchloride – 15 thou.tons.; Polyethylene glycol – 10 thou. Tons.; Organic acids – 120 thou. Tons.; Specialty Chemicals Household chemicals Retardants – 250 thou,tons.; Phenol antioxidants – 45 thou.tons.; Super plasticizers – 50 thou.tons.; Agrochemicals – 20 thou,tons.; Oil additives – 38 thou.tons.;

10. STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan MACHINERY INDUSTRY Share of machinery industry in the structure of total imports of the country 41%

11. ALTERNATIVE POWER (Renewable energy sources) STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan Kazakhstan 35 MBT 40 MBT 10 MBT 24 MBT 40 MBT 89,65 MBT 6 MBT 50 MBT 40 MBT 51 MBT 40 MBT 20 MBT WPS 1. Shelek corridor 2. Jungar gates 3. Upper Tainti 4. Kargalinsk 5. Mount. Yermentau 6. Mount. Arkalyk 7. Qarabotan area 8. C. Shefchenko fort 9. Qorday 10. Zhysymndik 10 MBT Small HES 1. Yssyk river 2. Baskan river 3. Koksy river 4. Shelek river 5. Lepsy river 6. Keles river SPS 1. c. Almaty

12. STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan INDUSTRIAL INFRASTRUCTURE Kazakhstan SEZ “Burabay” Qostanay Pavlodar SEZ “Astana new city” Astana Oral Semey Qaraghandy Oskemen SEZ “Petrochemical park” Atyrau Qyzylorda SEZ “IT park” Aktau Shumkent Almaty Taraz SEZ “Sea port Aqtau” SEZ “Ontustik”

13. MEASURES OF RENEWABLE ENERGY DEVELOPMENT SUPPORT STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan Land Priority in reservation and provision of land for the construction of renewable energy projects Transfer of energy Support for connecting objects of RES to networks of power transmission organizations; Energy transmission organizations liabilities to purchase electricity generated using renewable energy Exemption from payment for the transfer of renewable electricity through network of energy transmission organizations Construction Investment incentives and preferences for the construction and operation of the renewable energy sources

14. CUSTOMS UNION: KAZAKHSTAN, RUSSIA, BELARUS STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan Advantages for potential investors: Russia Market capacity is about 170 million people with a total GDP of 2 trillion. U.S.$ • Investment incentives: • Exemption from customs duties on imports of production equipment and raw materials in Kazakhstan for the implementation of investment projects. • - In Kazakhstan mo • re liberal taxation, compared with Russia and Belarus to open and maintain business. Belorussia Kazakhstan Unified trading laws: 1. Unified customs territory; 2. Unifiedtrade policy; 3. Unifiedcustoms rules and code; 4. Free movement of goods in the customs area

15. West Europe – West China – 8 445 км (10 days) Sea route – 24000 км (24 days) ICBC «Khorgos:Western Europe - Western China» STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan ICBC “Khorgos” Russia Europe Kazakhstan China

16. STATE PROGRAM for Accelerated Industrial-Innovative Development of the Republic of Kazakhstan CONCLUSION In general, for implementation of program of forced industrial-innovative development necessary to attract investmenttotaling over $ 60 billion; For current time, more than 300 projects identified sources of funding in the amount of $35 billion; • Advantages of the Republic of Kazakhstan: favorable tax treatment(in 2009 year CIT rate is reduced from 30 to 20%, and by 2011 will be 15%, VAT rate reduced from 13 to 12%) significant reserves of natural resources; low rates on major components of production cost (electricity, gas, railway transportation); in conclusion we should note that with relatively low wages, we have highly educated and skilled workforce.

17. Thank you for attention!