From IGA to EPC
Intergovernmental instruments signed on 28 May 2026 form the legal foundation of the Balkhash NPP project, and Unicase analysed their commercial and regulatory implications in the previous edition of this newsletter.
The Agreement between the Government of the Russian Federation and the Government of the Republic of Kazakhstan on the Basic Principles and Conditions of Cooperation on the Construction of a Nuclear Power Plant on the Territory of the Republic of Kazakhstan (the IGA) establishes the state-level framework within which everything else in this project operates: the roles of the parties, the structure of the Consortium, the financing, the regulatory environment, the tax and customs regime, and the rules for resolving disputes.
The EPC contract signed on 3 September 2026 sits within that framework. Under the IGA, where there is any inconsistency between the IGA and any contract concluded under it, the IGA prevails. For sponsors, lenders and prospective Consortium participants, this is the starting point: before the EPC contract is analysed, the IGA must be understood.
The Consortium Is Defined by the IGA
The IGA defines the Consortium in terms that matter. It is explicitly described as a specific coordination arrangement for the project and explicitly stated not to constitute a joint venture under the laws of either state. Rosatom leads through AtomStroyExport as General Contractor; KNPP acts as Customer; International Suppliers from third countries may participate.
As the Consortium is not a joint venture, the default liability rules that apply to joint ventures under Kazakhstani law do not apply. The allocation of liability between Consortium members for delay, defect, cost overrun and regulatory non-compliance must be addressed explicitly in the Consortium documentation.
Prospective International Suppliers should not assume that their position in the Consortium is defined by the EPC contract alone. Their inclusion requires mutual agreement between the General Contractor and the Customer, and their obligations are governed by the IGA hierarchy.
30% Thresholds
Participants should be careful to distinguish between two separate 30% figures that apply to this project from different legal sources.
The IGA sets a target localisation level of 30%, meaning 30% of goods, works and services used in the project should be of Kazakhstani origin. This is an aspiration, qualified by the requirement that Kazakhstani content meets the standards set by the EPC contract. It is not a binding obligation.
Kazakhstani law sets a mandatory cap of 30% on the proportion of works under a prime construction contract that may be subcontracted, calculated by reference to total contract value. This is a hard statutory ceiling that cannot be contracted around.
These are separate instruments with separate legal effects. The IGA’s localisation target and Kazakhstani construction law’s subcontracting cap operate in parallel. Consortium documentation needs to address both, and the distinction between Consortium co-performance and subcontracting is a critical structural question, because how works are characterised will determine which threshold applies.
Regulatory Stabilisation
Under the IGA, the project is implemented under Kazakhstani law as it stood on the date the EPC contract was signed. For commercial participants, this is a significant protection against adverse legislative change.
However, the IGA immediately carves out the categories that matter most in a nuclear project. Changes to legislation on nuclear safety, radiation safety, physical security, environmental protection, public health and licensing are notstabilised. If Kazakhstani law in any of these areas changes after the EPC contract is signed and those changes adversely affect the project’s schedule or cost, the IGA does not guarantee compensation; it requires only that the competent authorities and authorised organisations negotiate in good faith to agree compensating measures.
For lenders, this is a material drafting point. The stabilisation representation in any financing document needs to reflect the carve-outs in the IGA accurately.
For sponsors and Consortium participants, the practical implication is that Kazakhstan’s nuclear safety and radiation protection framework, which, as Unicase has noted in previous publications, is still under active development, remains a live regulatory risk for the duration of construction.
Procurement Law Does Not Apply
The IGA suspends the normal Kazakhstani procurement framework entirely for contracts between authorised companies. All such contracts are concluded by direct negotiation: no tender, no auction and no competitive procedure is required.
This is commercially significant for two reasons. First, it means International Suppliers are selected by negotiation, not competition, and their inclusion in the project depends on commercial agreement with the General Contractor and mutual approval by the Customer, not a tender outcome. Second, it means that any participant who believes their position in the project is protected by procurement law or public tender rules is mistaken. There are no such protections here.
This client alert has been prepared by Unicase Law Firm for general informational purposes only. It does not constitute legal advice and should not be relied upon as such. The contents reflect the state of the law and publicly available project information as at September 2026. Specific legal advice should be sought before taking any action based on the matters discussed herein. Unicase Law Firm accepts no liability for any loss arising from reliance on this publication. © 2026 Unicase Law Firm. All rights reserved.