Maxim Bakiev connected to cryptominers
Kloop found out the name of the Kazakh electricity supplier for the largest mining company Solarcoin. But there is reason to believe that in reality there is no supply, and Solarcoin, like a vampire, continues to draw scarce current from the energy system of Kyrgyzstan. And that people around him help him with this Maxim Bakiev.
Solarcoin’s rich appetites have been attracting attention since last spring. In March-May 2023, this mining company, associated with senior energy officials, was listed the second largest consumer of electricity in Kyrgyzstan. Then in three months it spent 48.47 thousand megawatt-hours. And in July, according to KERC data, it completely became record holder: almost 20 thousand megawatt-hours per month.
As is known, due to a lack of electricity, miners in Kyrgyzstan are prohibited from connecting to the general state power grid. However, in July 2023, Kloop stated in its investigation that Solarcoin buys electricity from the state.
Two days later the president of the country Sadyr Japarov was forced to confirm this. But he immediately tried to justify himself: miners, they say, bring big income to the state by buying “surplus” electricity from it, “which we cannot sell to anyone.”
And a couple of days later the Minister of Energy Taalaibek Ibraev accused journalists that the state budget is losing revenue from mining. According to him, after media investigations, Solarcoin allegedly refused to buy domestic electricity, and since August 1, it has been purchasing it from Kazakhstan.
Kazakh journalists asked their energy minister Almasadama Satkalieva, is it true. That answeredthat there are no specific agreements with the Kyrgyz mining farm. But theoretically, at “certain hours,” Kazakhstan can export excess electricity to its neighbors. Therefore, the minister admits that some “negotiations at the level of energy enterprises” are underway.
The minister of the neighboring country did not specify which enterprises we might be talking about. But this was ultimately done by the Ministry of Energy of Kyrgyzstan. In response to Kloop’s request, the department reported: Solarcoin is now purchasing electricity from GES-Energo Almaty LLP. After studying this company, we discovered a lot of interesting things.
Screen for Max
Kazakhstani LLP “GES-Energo Almaty” has existed since 1998. According to SPARK, the company belongs to its permanent director Alexey Feoktistov and a certain German citizen Waldemar Miller.
It was not possible to contact the founders and employees of GES-Energo Almaty: one of her phones does not work, the other does not belong to her. But it turned out that in the past this small company, on the contrary, supplied Kyrgyz electricity to Kazakhstan. In 2010 she bought it from the Kyrgyz state enterprise Electric Stations, requesting volumes of up to 1.5 billion kilowatts.
One of these deals ended in a corruption scandal. The head of the export department of Electric Stations, Kutbidin Nazhimidinov, extorted money from Feoktistov for extending the contract for the sale of 15 million kilowatt-hours to Kazakhstan at 2.8 cents per kW. Moreover, in Kazakhstan itself, electricity then cost at least 8 cents.
Moreover, as Kloop discovered, the company GES-Energo Almaty LLP was associated with the son of the former president of Kyrgyzstan, Maxim Bakiev. And with the fraudulent privatization of 80% of the shares of the state monopolists Severelectro and Vostokelectro, which supply electricity to the Chui, Naryn and Issyk-Kul regions.
In 2010, at an investment competition, the company GES-Energo Almaty imitated competition so that the shares of these state-owned companies could be bought for next to nothing by Maxim Bakiev’s Chakan HPP OJSC. In a criminal conspiracy participated Director of Chakan HPP Rustam Yunusbaev is a constant participant in the corruption schemes that Bakiev Jr. and his accomplice built in the energy sector of Kyrgyzstan Alexey Shirshov.
In 2013, after the overthrow of the regime Kurmanbek BakiyevThe Pervomaisky Court of Bishkek sentenced Maxim Bakiev, who had fled abroad, to 25 years imprisonment. From sentence It became known about a criminal conspiracy with the director of GES-Energo Almaty, Alexey Feoktistov, thanks to which Bakiyev’s company was able to buy out 80% of the shares of the state-owned company Severelectro at 45 times cheaper than their cost.
Energy you can’t see
And now, according to the Ministry of Energy, this former participant in Bakiyev’s “schematism” is selling Kazakh electricity to Kyrgyz miners. Or is he going to sell: although Energy Minister Ibraev says that miners receive it from August 1, there were no electricity supplies as of August 8.
Do they even exist?
According to the CIS Electric Power Council, the company “GES-Energo Almaty” has a mini-hydroelectric power station with a capacity of 0.43 MW-hour. As energy expert Ernest Karybekov notes, this is too little to provide electricity to the Solarcoin mining farm in Bystrovka: in the spring she consumed on average 22.5 megawatts per hour, and by the end of July, according to Energy Minister Taalaibek Ibraev – already 25.
In principle, GES-Energo Almaty can obtain the missing electricity from the general energy system of Kazakhstan, admits Karybekov. But, judging by the company’s financial results, it has not sold such volumes in recent years, and its tax payments from 2015 to 2021 fell almost six times.
The benefits of Solarcoin from connecting to Kazakhstan are questionable – even if Kyrgyzstan, violating the ban, sold state electricity to miners not cheaply, but as expected, at 5.04 soms per kW. The minimum retail price of electricity in Kazakhstan is now, in terms of approximately 4.47 soms per kWand for miners 4.5 som. In addition, you have to pay 23 tyyn for the transit of each kilowatt through the energy network of Kyrgyzstan and service cross-border payments. What’s the point of exchanging awl for soap?
Of course, you can also buy electricity in bulk. But in September list There are no subjects of the wholesale electricity market of Kazakhstan of the company “GES-Energo Almaty”. This means that it cannot buy electricity directly on the wholesale market – only through an intermediary for an additional fee. However, GES-Energo Almaty is not in list consumers of the electric power market in Kazakhstan for September 2023. That is, it does not buy electricity even from intermediaries.
And here are the questions for Solarcoin: why did it choose GES-Energo Almaty for supplies, and not one of the subjects of the wholesale electricity market of Kazakhstan? And why does this supplier not seem to have sufficient volumes of electricity – neither its own nor someone else’s? Maybe this company, out of habit, pretends to be something other than what it is, and Kyrgyz miners get electricity somewhere else?
From Bakiyev’s son to Japarov’s matchmaker
Kloop has already reported that Solarcoin is connected with a member of the board of directors of the National Electric Network of Kyrgyzstan. Zhyrgalbek Turuskulov and with Farhat Iminov – Member of the board of state “Electric stations”. Considering that these people manage millions of kilowatts in their homeland, their mining partners are unlikely to have any desire to buy electricity in Kazakhstan at all.
Let us remind you that GES-Energo Almaty was also connected with Electric Stations. In 2010 the company bought This state-owned enterprise has cheap electricity for resale to Kazakhstan. And an official of Electric Stations in the past extorted money from the director of GES-Energo Almaty for extending the contract.
The connection between Solarcoin and GES-Energo Almaty is not the first trace of Maxim Bakiev we have found in Kyrgyz mining. In the summer, the government of Kyrgyzstan, under the pretext of releasing “locked” electricity, gave 30 megawatts from the state-owned Kambar-Ata hydroelectric power station-2 to the mining company “MBT Stroy”, associated with Bakiyev.
All this gives reason to assume that, against the backdrop of an acute shortage of electricity, the Minister of Energy of Kyrgyzstan Taalaibek Ibraev is hiding from us the facts of the ongoing supply of state electricity to miners.
Moreover, the energy crisis raged in the country and under Bakiev, when Ibraev led energy companies and didn’t denythat he worked with Shirshov. Let us recall that after the overthrow of Bakiyev, a criminal case was opened against Ibraev for corruption in the energy sector.
Does the thunderstorm of all corrupt officials, Sadyr Japarov, know about all this? I should know: under Bakiyev, the current president headed the Agency for the Prevention of Corruption. This year, the head of state justified the supply of state electricity to miners.
And last year Temirov LIVE investigative journalists found outthat Zhaparov’s matchmaker Aidar Adylbekov became deputy general director of the state-owned company Vostokelektro. This is one of those companies that was privatized for next to nothing with the help of GES-Energo Almaty by Bakiyev’s son (after Bakiyev’s overthrow it was returned to the state).
An interesting coincidence: after the July investigations by Kloop and Azattyk about the activities of Solarcoin, the Kyrgyz Energy Settlement Center stopped publishing monthly list of the country’s largest consumers.
Mining farm “Solarcoin” mints coins for officials
Amid the energy crisis, the state is selling huge volumes of scarce electricity to the large mining company Solarcoin. In May 2023 alone, almost 18 thousand megawatt-hours were sold to it. This is comparable to the limits of Kumtor, and for the Naryn region this would be enough for a whole week. Kloop found out who is getting rich through mining to the detriment of the country’s residents.
The number of mining farms in Kyrgyzstan is a closely guarded secret. There is reason to believe that there are not just many of them, but a lot. But, according to the State Financial Supervision Service, in the country registered only two mining companies – LLC “Solarcoin” And ViNET LLC.
“ViNET” belongs to businessman, ex-deputy of the Jogorku Kenesh Rakhatbek Irsaliev, owner of several private mini-hydroelectric power plants. In Kyrgyzstan, electricity generated by private hydroelectric power stations is allowed to be used for mining, provided that miners buy it at least 5.04 soms per kilowatt-hour. So this company doesn’t seem to be violating anything.
Wolves herding sheep
Solarcoin LLC was registered in Bishkek back in 2007, but for some reason it underwent re-registration in January 2023.
The founders of Solarcoin are: NBTS KG companyTatyana Olegovna Martynova and Lu Jincheng, and the leader is Aisana Baizakovna Ismailova.
“NBTS KG” belongs large Chinese Internet company The9 Limited. The company announced back in May 2022 that The9 Limited received a limit of 31.5 Megawatts of electricity in Kyrgyzstan, purchased transformers with equipment for connecting to power lines, and also received a station, facilities, the right to use high-voltage equipment and land in Kyrgyzstan for mining.
Tatyana Martynova is a business partner of two important people at once: a member of the board of directors of Electric Stations, Honorary Consul of Mongolia in Kyrgyzstan Farhat Iminov and a member of the board of directors of the National Electric Network of Kyrgyzstan Jyrgalbek Turuskulov. She is connected with them through companies “I-element”, “SFS Development”, “Metrum KG”.
Aisana Ismailova is also associated with Farhat Iminov. Along with Solarcoin, she runs a branch of an international company Gewor Trading LLPwhose director is Iminov. Before that, Ismailova headed a department at the Ministry of Investment.
Well, that’s the icing on the cake. In 2015, Tatyana Martynova, Farhat Iminov and Zhyrgalbek Turuskulov were candidates for the Jogorku Kenesh from the Republic-Ata-Jurt party. The leaders of this party were ex-Prime Minister Omurbek Babanov and Kamchybek Tashiev, who now heads the State Committee for National Security. One of those formidable departments that must combat violations in the field of energy use.
While Kyrgyzstan makes up for its electricity shortage with expensive supplies from abroad, its own electricity goes into private hands for pennies. The Cabinet of Ministers, without competition, gives 30 megawatts from the Kambar-Ata hydroelectric station-2 to an unknown company associated with the Bakiyev clan to supply a “computer center.” Businessmen will receive state energy, which would be enough for a large village, five times cheaper than the population – and, apparently, they will spend it on mining, which is prohibited at state power plants. That is, citizens for whom the government raises tariffs will pay for someone else’s crypto wallet.
The head of the Cabinet of Ministers, Akylbek Zhaparov, recommended that the state JSC Electric Stations, which manages state energy assets, conclude an agreement without a tender on the modernization and reconstruction of the infrastructure of the Kambar-Ata HPP-2 with the unknown private company MBT Stroy, registered a year ago. This is stated in Resolution of the Cabinet of Ministers No. 303 dated June 16, 2023.
According to the document, MBT Stroy will invest money in increasing the capacity of the energy infrastructure connecting hydroelectric power stations with state networks. And in return, he will receive the right to use electricity from the state-owned Kambar-Ata HPP-2.
Modernization for the sake of privatization
Modernization of energy infrastructure is indeed long overdue. The design capacity of the single Kambar-Aty-2 generator is 120 MW, but due to the low capacity of transformers and power lines, it supplies only 90 MW to the network. According to the resolution of the Cabinet of Ministers, MBT Stroy will invest its money in modernizing the infrastructure (in particular, the Kambar-Ata substation) and freeing up “locked” capacity.
But these freed 30 megawatts will not enter the country’s energy system soon. According to the resolution, MBT Stroy will use them at its own discretion even after it recoups its investments.
What she will do with this electricity is not directly stated in the resolution. But in paragraph 4, the Prime Minister recommends that Electric Stations enter into an agreement with MBT Stroy “for the power supply of the information and computing unit.” And the main activity of the MBT Stroy company since June 2023 is “activities in the field of information technology and computer technology.” In December 2022, Deputy Minister of Energy Taalaibek Tolubaev declaredthat the Ministry of Energy, as an exception, allowed the supply of mining equipment to Kambar-Ata-2. But the press secretary of the Ministry of Energy answered Kloop that there is no mining farm at Kambar-Ata-2 yet, and all the information about what kind of equipment will run on the energy of the state hydroelectric power station will be given to journalists after MBT Stroy delivers it .
It is logical to assume that MBT Stroy will use these 30 megawatts for mining. And the most interesting question: at what rate?
Six times cheaper than for the general public
The Cabinet of Ministers resolution does not directly name the tariff, but the document says in black and white that it will be determined exclusively by MBT Stroy itself – “at the level of the planned production cost” of Kambar-Aty-2 electricity generation.
Attempts by Kloop to find out from senior energy government officials the exact tariff size were unsuccessful.
“There is no agreement now [между «МБТ Строй» и «Электрическими станциями»] no, I can’t say anything now,” Energy Minister Taalaibek Ibraev told us. The National Energy Holding reported that this issue was not within their competence and advised to contact Electric Stations. Press secretary of “Electric Stations” Aida Kadyrova admitted to us that she had not heard about Akylbek Japarov’s resolution at all. The Ministry of Energy promised to clarify the information later. The phones of deputies of the Jogorku Kenesh Committee on Fuel and Energy Complex were turned off. Only one deputy answered Kloop: he said that he did not hear the question and hung up.
So what does this all mean – a tariff “at the level of planned production cost”?
In 2021, expert in the field of electricity Batyrkul Baetov reported to the Kabar agencythat the cost of generating electricity at hydroelectric power stations in Kyrgyzstan is 16 tyiyns per 1 kilowatt. In March of this year, mechanical engineer Arstanbek Asanov clarified, that specifically at the cascade of Naryn hydroelectric power stations (which includes Kambar-Ata-2), the cost of generating one kilowatt in 2021 was 24.9 tyyn. In 2023, taking into account low water levels, the numbers may be higher. Kloop’s interlocutors say that in extreme cases we can talk about 50-60 tiyns.
To show how cheap it is, let us recall: the uniform electricity tariff for mining in Kyrgyzstan is 5.04 soms. This is ten times more than the “planned production cost” at which MBT Stroy will receive electricity – although exceptions can be made for individual companies the law prohibits. At the same time, the unlimited electricity tariff for the population of Kyrgyzstan has been 3.28 soms since May. That is, even the population of the country pays more than six times more for its excess kilowatt than an unknown and, in all likelihood, mining company. At the same time, the head of the Cabinet of Ministers allows the MBT Stroy company to consume state megawatts even after its investments in infrastructure will pay off – however, on a general basis. Although it is impossible to use government electricity for mining on any grounds.
We prohibit mining, but we will not show the ban
Mining itself is not prohibited in Kyrgyzstan. For a country where most of the electricity is produced by long-paid Soviet hydroelectric power plants with low cost per kilowatt-hour, such a business is quite logical. More precisely, it would be logical if there was enough electricity. And it has been in short supply in recent years. Therefore, on April 4, 2019, National Energy Holding with its by order No. 56-p prohibited mining farms from using electricity from the public network. Miners can only buy electricity from private hydroelectric power plants.
The public grid is the electrical network of state-owned energy companies that is centrally managed. Referring to this order, the State Committee for National Security in recent years has been actively confiscating equipment from miners who illegally connected to state networks and prosecuting them. The scale of this underground business is evidenced by the fact that the National Security Committee calls mining one of the reasons for the energy crisis in the country.
The National Energy Holding confirmed to Kloop that the order banning mining on state electricity is still in effect. But they noted that some changes were made to it. They never told us what these changes were, stating that the order was for internal use. This sounds quite strange: everyone is prohibited from mining at state expense, and the ban itself is kept secret.
However, in December 2022, Deputy Minister of Energy Tolubaev clarified: unnamed miners at Kambar-Ata “were allowed to supply equipment in the summer, the influx is large from April to October.” It turns out that in winter, when the hydroelectric power station is not operating at full capacity, MBT Stroy will be idle? Or will it still take electricity from the national energy grid, which is already insufficient?
So the government allows a select company to do something that other miners are severely punished for. And even without competition. And even on suspiciously preferential terms. The benefit for society and the state is questionable: after all, the company will take back the electricity released during modernization even after its investments have paid off.
Who are these lucky ones?
Traces of Shirshov and Bakiyev’s raiders
MBT Stroy was founded in 2022 in Bishkek as a wholesale trading company. But a year later it underwent re-registration and changed its main activity to “activities in the field of information technology and computer technology.” According to the Open Budget, the company has not paid taxes since its founding.
The founder of MBT Stroy, Alexey Nikolaevich Zaitsev, is the owner and director of one of the largest and oldest metal traders in Russia, the A Group corporation. Zaitsev’s corporation has been trading metal in 19 cities of Russia and the post-Soviet space for a quarter of a century.
In Kyrgyzstan, she owns two companies: A GROUP BSHK and A GROUP Vostok. Like MBT Stroy, both companies are registered in Bishkek at the addresses Murmanskaya 56 and 56A. The Kyrgyztemir production base is also located there. Her fifteen years ago captured by raiders from Maxim Bakiev’s entourage, and the base still belongs to them. It would seem like a simple coincidence. Well, where is the fifth metal trader in Russia with an annual turnover of almost 70 billion rubles – and where are Bakiyev’s accomplices?
However, there is a second coincidence. In July 2022 Zaitsev by decree President Sadyr Japarov received Kyrgyz citizenship. By the same decree, Evgenia Sudets and her husband received citizenship Vladimir Androsik. Evgenia Sudets is the former head of the State Development Bank of Kyrgyzstan, opened in 2022.
In March 2023, the Politklinika publication published an investigation that Sudets’ husband Vladimir Androsik was associated with the raider takeover by Maxim Bakiev mobile operator “Megacom” during his father’s reign. After the Bakiyevs fled the country, the Provisional Government of Kyrgyzstan nationalized Megacom. At the beginning of 2023, it became known that Megacom should come under the control of the State Development Bank, which was headed by Sudets. After the publication of the Politklinik investigation, she resigned as head of the bank.
The third coincidence: the company “IT Capital” of Vladimir Androsik is also located on Murmanskaya, 56A – where the “Kyrgyztemir” seized by the Bakiyevites is located and where three companies of the Russian metal trader Zaitsev are registered.
The fourth coincidence: Androsik’s company bought a 2.9% stake in the Eurasian Savings Bank, 76.5% of whose securities are owned by the Ministry of Digital Development. Previously, this bank was called “Kyrgyz Credit Bank”, and Maxim Bakiev owned it through intermediaries. And the bank’s securities were managed by the company of the current Minister of Digital Development, Talantbek Imanov. Imanov was the driver of Alexei Shirshov, a friend and accomplice of Maxim Bakiev with interests in the energy sector.
Alexey Shirshov, the ex-finirector of the state-owned Electric Stations company and the author of corruption schemes in the energy sector, was one of those through whom Maxim Bakiev tried to privatize state-owned energy companies. On Shirshova turned on several criminal cases related to fraud and waste in the energy sector.
One of these cases was the Narynhydroenergostroy case. Maxim Bakiev at one time privatized it through companies associated with him. But in 2010, the Provisional Government of Kyrgyzstan nationalized 90% of the shares of Narynhydroenergostroy. And now this state company, by order of Prime Minister Akylbek Japarov, must transfer the Kambar-Aty-2 substation to Electric Stations for the needs of MBT Stroy.
After the overthrow of Bakiyev’s power, the Prosecutor General’s Office ringleader five criminal cases of misappropriation of state property and embezzlement during the construction of the Kambar-Ata-2 hydroelectric station. One gets the impression that the President and Prime Minister Japarov intend to return to the Bakiyev clan not only the seized Kyrgyztemir and Megakom, but also part of the state energy assets.
Kambar-Ata-2 is a category A strategic facility, a sensitive facility where private companies are prohibited from entering. “Electric stations” claimthat to such objects “there is no possibility of secretly unauthorized connection of outside consumers, including mining farms; according to the regulatory and technical documentation, the connection of outside consumers to the power plant’s own needs is prohibited.”
Alexey Zaitsev confirmed to Kloop that his company will invest in the modernization of Kambar-Aty-2. According to him, MBT Stroy is not a mining company, but when asked directly whether it would engage in mining, the owner of the company refused to answer. Zaitsev also did not answer what MBT Stroy will do with the 30 megawatts received. But he admitted that his company would resell electricity at a profit.
“This all needs to be done first. Then we can discuss what we will do next. We are currently doing reconstruction. What we will do next, sell it or something else, seems to be a matter of further discussion,” said the owner of “A Group”. — “MBT Stroy” enters into a contract for reconstruction. Now we will make a reconstruction plan there. Invest money there. A further solution is under development. The equipment is expensive, it takes a long time to build, so first you need to get all the design decisions, understand how much electricity there will be, and then it will be clear what to do with it. We need to do the project first. We are still at the stage of concluding an agreement with the design organization.”
Zaitsev refused to answer questions from Kloop about the size of investments, the price of electricity, and the registration address of his company at Murmanskaya, 56A.
Why a metal trading giant with a turnover of nearly a billion dollars would participate in such a dubious scheme is still unclear. And how you can even enter into an agreement without knowing what you will do with the product received is also unclear. They don’t do this in business, and especially not in a large business with a 30-year history.
For Kyrgyzstan, this story is not at all small. The country’s electricity shortage is 3 billion kWh. The government makes up for it with purchases from Kazakhstan, Turkmenistan and Russia. Kyrgyzstan buys electricity from them for an average of 2.6 soms, paying the difference when selling it to the population from the country’s budget. And with all this, the state undertakes to sell electricity from Kambar-Ata-2 to a private company at about five times cheaper. It is possible that in the future, Akylbek Japarov’s resolution will result in new power outages for the population.