Will not leave you in trouble

The state will pay for the investment program of Inter RAO UES

An increase in energy exports to China by a third, expansion of the Sochi Thermal Power Plant, reconstruction of the Ivanovo State District Power Plant, construction of a unit at the Kaliningrad Thermal Power Plant-2, purchase of a controlling stake in the Sangtuda Hydroelectric Power Station in Tajikistan. All these plans of Inter RAO will have to be implemented in the context of a significant drop in demand for electricity and a liquidity crisis. However, according to experts interviewed by Vremya Novostei, the company will not experience serious difficulties in financing even its largest projects.

Inter RAO UES is a monopolist in the field of electricity exports abroad. In addition to domestic assets, it owns a number of facilities abroad, including: the Mtkvari thermal station, the Telasi distribution company and two Khramesi hydroelectric power stations in Georgia; seven hydroelectric power stations, nuclear power plants and energy networks in Armenia; as well as Ekibastuzskaya GRES-2 in Kazakhstan, Moldavskaya GRES and 75% of the shares of Sangtuda HPP-1 in Tajikistan. However, the corporation does not intend to stop there. And although, as company representatives noted yesterday during an online conference, the investment program for next year will be reduced by 22.6% compared to this year’s plans, Inter RAO intends to implement a number of large projects. Let us note that this year alone, and only in facilities in the country, 15.5 billion rubles were invested. Thus, the subsidiary of the Eastern Energy Company corporation plans to export 1-1.2 billion kWh to China in 2010, which is 25-30% higher than the current level. In addition, next year the power engineers expect to expand the Sochi Thermal Power Plant with double unit No. 3 with a capacity of 80 MW in preparation for the 2014 Olympics; install a new unit at the Ivanovskaya GRES, and the station’s capacity will increase to 650 MW, and build, with the participation of Gazprom as a co-investor, another one at the Kaliningrad CHPP-2. It is also worth noting that Inter RAO is also responsible for the investment program of OGK-1, in which it owns 61.9% of the shares. The generator’s plans include the implementation of projects at the Urengoy and Nizhnevartovsk state district power plants.

The corporation names several sources of financing for the entire variety of projects. For example, as part of increasing the level of liquidity, Inter RAO plans to list on Western trading platforms. However, experts believe that the main source of payment for the company will be the state. “Financing will be provided in several directions at once. Firstly, through an additional issue of shares. In the fourth quarter of this year and in the first quarter of next year, the company plans to issue an additional 40 to 70% of the current number of shares. Part of it will be bought by VEB and FAUGI, and through Rosatom in March 2010 the corporation will receive a controlling stake in the Sangtuda HPP,” Troika Dialog analyst Alexander Kotikov explained to Vremya Novostei. “Secondly, through borrowed funds. If a state company turns to one of the state banks, then funds will be found, even despite the liquidity crisis.” In addition, the expert noted that Inter RAO has the opportunity to calmly postpone the completion of some projects, since “it has not signed any agreements on the commissioning of new capacities.”

Let us note that, according to a company representative, the holding’s consolidated statements for 2008 indicate that possible tax claims against the group’s companies by the authorities of the Netherlands and Finland are estimated at 5.8 million euros, however, there are also some tax issues that require an assessment of possible claims , by another 38.475 million euros.

Petr GELTISHCHEV