Kazakhstan to spend $2 bln on grid upgrades

ALMATY, Sept 26 (Reuters) - Kazakhstan plans to spend $1.8 billion to upgrade its Soviet-era electricity grid to help curb energy losses at a time when domestic demand exceeds supply, a senior sector official said.

The oil-rich Central Asian states depends on electricity imports for its western and southern regions and suffered from energy shortages last winter due to extremely cold weather.

Almasadam Satkaliyev, Chief Executive of the state-owned grid operator KEGOC, said his company and the government were trying to raise sector efficiency by upgrading the grid to cut losses incurred during transmission.

"Total investment into this project is approaching $800 million," he told Reuters in an interview.

Like most other ex-Soviet states, Kazakhstan still operates a network of crumbling power utilities and pipelines built in Soviet times when energy-awareness was low on the official agenda.

The World Bank and the European Bank for Reconstruction and Development are co-financing the project, he said.

"As for the grid as a whole, we see total investment at $1.8 billion by 2015," Satkaliyev said.

He said Kazakhstan hoped to compensate domestic shortages by importing electricity from neighbouring Russia and -- at peak hours -- from Kyrgyzstan this winter.

(Reporting by Tatiana Seroshtanova; Writing by Olzhas Auyezov)