The ratings on JSC Kazakhstan Electricity Grid Operating Co. (KEGOC), the fully state-owned monopoly operator of the Republic of Kazakhstan's high-voltage electricity transmission grid, reflect the lack of transparency in tariff regulation, the company's aggressive financial policy, and the expected deterioration of its financial flexibility from 2004-2005, when it starts to repay the principle on its long-term loans. These factors are offset by KEGOC's strategic importance to central government and the subsequent support this brings, its dominant position in electricity transmission in Kazakhstan, and some positive changes in tariff structure. KEGOC operates a total of 23,520 kilometers (km) of high-voltage transmission lines, ranging from 110 kilovolts (kV) to 1,150kV, and in 2001, had revenues of about $75 million. The tariff-setting
