Somewhat weak characteristics of Kazakhstan's power sector. A cost-plus tariff regime that in our view lacks transparency, is politicized, and guarantees neither sufficient returns on capital nor timely recovery of costs. An aged asset portfolio that requires extensive modernization. Monopoly position in the stable regulated electricity transmission business, with low operating risk. A large investment program and associated construction risk. High exposure to foreign currency and floating interest rate risks. An aggressive financial policy and examples of covenant breaches in the past. Relatively high leverage. Ongoing financial support from the Kazakh government. Regulated earnings and cash flow profile. Comfortable long-term maturity profile. Standard&Poor's Ratings Services' stable outlook on Kazakhstan Electricity Grid Operating Co. (JSC) (KEGOC) mirrors that on
