Establishment of the Holding JointStock Company Kazakhstan Holding

Establishment of the Holding Joint-Stock Company Kazakhstan Holding on Management of State Assets “Samruk” (hereinafter – the Holding) was established by: § Decree of the President of the Republic of § Kazakhstan of January 28, 2006; Decree of the Government of the Republic of Kazakhstan of February 23, 2006 that approved Memorandum on Major Operating Principles of the Holding. 2

Purpose, Operating Principles PURPOSE To maximize long-term value of state-owned companies by means of improving corporate governance PRINCIPLES §To improve competitiveness and economic efficiency of the Companies’ performance §To introduce best international practices of corporate governance §To assist the Government in achieving mid-term objectives on development of the Companies §To develop conceptual nationwide and inter-sector investment solutions §To ensure implementation of investment projects THE PRINCIPLES ARE PRACTISED BY MEANS OF § performing functions of the shareholder and representation in relevant Boards of Directors § performing investment functions 3

Asset Structure HOLDING SAMRUK JSC Oil and gas §NC Kaz. Munai. Gaz JSC Energy §KEGOC JSC §Samruk-Energo JSC § KOREM JSC Telecom and Post §Kazakhtelecom JSC §Kaz. Post JSC Mining §Maikain. Gold JSC Transportation §NC Kazakhstan Temir Zholy JSC §Air Astana JSC §International Airport Aktobe JSC §Airport Pavlodar JSC Mechanical Engineering §NC Kazakhstan Engineering JSC §Repair Corporation Kamkor JSC Other §Samruk Invest LLP §Telecom-Invest Samruk LLP §Chokin Kaz. NII JSC (research institute) 4

Financial and Economic Performance in 2007 Million KZT +8% +17% 5

Establishment of SAMRUK INVEST LLP Samruk Invest LLP was established on July 20, 2007 as recommended by Mc. Kinsey’s Consultants to provide and ensure investment activities of the Holding Samruk Invest LLP is working in the following areas: § Financial, economic and legal analysis of investment proposals and preparation for decision-making by authorized units of the Holding; § Development of conceptual solutions on the structure of implementation and financing of investment projects to be approved by relevant authorized units of the Holding including relevant feasibility studies of project data; § Consulting follow-up of investment activities of the Holding, monitoring at all preinvestment stages (before lender confirms absolute readiness for loan disbursement) of project implementation; § Organization of financing and co-financing, including attraction of investors and lenders. Activities of Samruk Invest LLP fosters implementation of investment projects, reduction of investment risks of the Holding and best terms for the Holding’s investment program. 6

Investment Activities of the Holding and its Companies 7

Existing Investment Projects In Power Sector: § Kazakhstan Electricity Transmission Rehabilitation Project – rehabilitation of transmission system of KEGOC and improvement of dispatch control of the grid § Construction of 500 k. V Second Transmission Line of Kazakhstan North – South Transit– to enhance amount of electric power transmitted to South Kazakhstan from energy excessive North from 650 MW up to 1, 350 MW § Modernization of Shardara HPS – to enhance reliability and capacity of Hydro Power Plant to cover growing deficit in electric power in South-Kazakhstan Oblast § Construction of Moinak HPS on Charyn River – to cover peak and semi-peak power loads, to cover deficit in electric power in South Kazakhstan; installed capacity– 300 MW 8

Existing Investment Projects In Transportation: § Development of transit potential – construction of new close railway lines, set-up of railway network of Kazakhstan § Electrification of Railways – to enhance economic performance of rail transport § Modernization and replacement of rolling stock – purchase of new locomotives: shunting diesel locomotives, passenger electric locomotives, as well as modernization of existing diesel locomotive stock with longer life time § Informatization and communication development – launching most advanced information systems based on highly-performing computing centers united by single digital communication network 9

Existing Investment Projects In Telecom and Postal Services: § Modernization and expansion of telecom network of Kazakhstan – construction of National Information Backbone DWDM, IP-network, IP/ MPLS is launched to meet the demand of domestic market in high-speed data transmission services § Development of mobile communication network of New generation of GSM standard – mobile communication services § Cellular communication of CDMA 2000 1 X standard – mobile communication services § Trans-Asian-European Fiber Optic Communication Line – over 11 thousand km of FOCL to be launched into operation § Installation of telephone services in rural settlements with population over 50 people and ancillary modernization of rural telecom network § Development of Postal-Saving System of the Republic of Kazakhstan Program for 2005 -2010 § Modernization of postal-financial infrastructure and set-up of information and logistic system 10

Existing Investment Projects In Oil and Gas: § Development of resource base: 4 new projects under development (Tyub-Karagan, Kurmangazy, Jemchujiny, Jambai) § Geographic business expansion: establishment of joint venture based on Orenburg gas refining plant (GRP) being arranged § Development of infrastructure to support off-shore operations: construction of Supporting Base for off-shore oil operations at Bautino port and Vessel Fuelling Stations at the eastern shore of Tupkaragnsky Bay; a special landfill for disposal of waste and chipping from off-shore wells. § Development of oil refinery, petrochemicals, marketing of oil and oil products: Reconstruction of Atyrau Refinery is completed and it is planned to set up a full facility to produce aromatic hydrocarbons; opportunities being considered for expansion in European/Mediterranean region (acquisition of share in Romanian Company Rompetrol Group in 2007) § Diversification of routes for hydrocarbon transportation: active work on development of existing and new transport systems, on capacity extension in the existing routes (Atyrau. Samara, CPC, Central Asia-Centre) 11

Development Institutions in Investment Projects World Bank

Perspective Investment Projects Project Description POWER Construction of Balkhash Thermal Power Station (TPS) The purpose is to ensure energy independence of the RK and meet growing demand for power in the southern regions of the RK. It is planned to commission two energy blocks with designed capacity 1, 320 MW before 2013, and 4 energy blocks with designed capacity 2, 640 MW before 2017. Kazakhstan Electricity Transmission Rehabilitation Project, Phase II The project provides for modernization of grid elements that have been modernized in the framework of Phase I of Modernization of National Grid. It will include 56 substations with voltage 500/220/35/10 k. V. Construction of Alma substation to be connected to National Electricity Network of Kazakhstan with voltage lines 500, 220 k. V The purpose of the project is to ensure reliability of energy supply to Almaty Region and capacity output designed for construction of Balkhash TPS Scheme of power distribution of Moinak HPS The project implies construction of new open distribution devices of substations, overhead transmission line 220 k. V to be connected to substation Expansion and Reconstruction of Ekibastuz GRES-2 with installation of two blocks № 3 and № 4 The purpose is to increase the plant’s capacity by 525 MW to meet growing demand of Kazakhstan in electric energy. 13

Perspective Investment Projects Project Description OIL AND GAS Exploration and Production Exploration and development of oil-and-gas bearing areas (Satpaev, Shagala, Srednekaspiyskyy, Centralnaya, Darkhan, Mertvyy Kultuk); participation in projects of energy development in Federal Republic of Bosnia and Herzegovina; field development (Imashevskoye, Khvalynskoye) Oil and Gas Transportation Modernization of gas distribution system of South Kazakhstan Oblast; Construction of oil pipeline Burgas-Alexandroupolis; formation of Kazakhstan Caspian Transport System to be connected to Baku-Tbilisi-Ceyhan Pipeline; Kazakhstan-China Pipeline; Pre-Caspian Gas Pipeline; Beyneu-Bozoy-Shalkhar. Samsonovka Pipeline. Development of Infrastructure to Support Offshore Operations Plans for extension of sea ports Aktau and Kuryk, as well as construction of North-Caspian Oil Spill Response Base to provide services and stevedoring Oil Refinery and Petrochemicals Production of road asphalt (Aktay); aromatic hydrocarbons (Atyrau); extension of oil product retails network; establishment of JV based on Orenburg GRP 14

Perspective Investment Projects Project Description TRANSPORT INFRASTRUCTURE Fleet increase in Air Astana JSC Purchase of 10 jet passenger airplanes Boeing, Airbus Development of transit potential Construction of new railway lines (Jezkazgan-Beineu, Khorgos. Saryozek, Eralievo-Kuryk, Mangyshlak-Bautino) subject to development of Caspian oil shelf, growing production and transportation of crude oil and oil products, need for strengthening port infrastructure. Formation of closed railway network of Kazakhstan Electrification of railways Improvement of economic performance of rail transport Modernization and replacement of rolling stock Purchase of new locomotives: shunting diesel locomotives, passenger electric locomotives, as well as modernization of existing diesel locomotive stock with longer life time 15

Perspective Investment Projects Project Description TELECOM To complete construction of National Information Super Backbone DWDM. It is planned to complete construction of junctions with international telecom operators Extension of Backbone IP/MPLS up to 2 GB/s Extension of metropolitan area network Metro Ethernet up to 10 Gbit/s. Extension of port capacity ADS Modernization and Extension of Telecom Networks of Kazakhstan Introduction of digital TV services IPTV Wide use of innovative technologies Wi-Fi and Wi-Max to provide broadband access to Internet Construction of CDMA 450 network in rural areas Creation of metropolitan area networks New Generation Network in six Oblast Centers. Packet switching-based network will be constructed in all large cities of the country in the nearest perspective. Development of local telephone networks will be oriented on SIP-telephony, Hosted PBX, IP Centrex, universal voice mail 16

Perspective Investment Projects Project Description MACHINE BUILDING Set up of wagon assembly enterprise in Kazakhstan To meet demand for wagons in Kazakhstan and CIS Construction of locomotive assembly plant in Astana To meet demand for locomotives in CIS, Baltic States, Georgia and Mongolia. Producing capacity - 100 locomotives per year, based on diesel-generators of General Electric Based on Uralsky Zavod Zenit JSC to arrange manufacturing of special 500 -ton vessels and barges During 2008 -2010 to commercialize production of 500 -ton vessels of new type for the plant in the Republic of Kazakhstan for the needs of Border Guard, Naval Forces and Ministry of Emergencies Construction of facility to produce rail wheels, axles and other hardware in Kazakhstan Designed capacity -100 , 000 rail wheels per year; 40 , 000 rail axles per year 17

Potential Opportunities for Cooperation The Holding and its Companies are ready to cooperate in the following areas: • Power (construction, modernization and extension of generating, distribution and transmission capacities). • Oil, gas and petrochemicals. • Telecommunication. • Transport Industry and Machine Building. • Mining Industry. 18

Holding Samruk, JSC tel: +7 7172 976 551 fax: +7 7172 790 400 www. samruk. gov. kz Samruk Invest LLP tel: +7 7172 790 851 fax: +7 7172 790 851