| E.ON has not yet decided on investments in Russia The largest German energy concern E.ON at the end of last week announced investment plans for 2005-2007. The total amount of the company's investments, as announced at the meeting of the supervisory board, in the next three years will amount to about 18.7 billion euros, and the only source of financing will be the operating profit of the concern.
At the same time, E.ON intends to invest 12.6 billion euros in the maintenance and development of infrastructure. The company intends, in particular, to repair and modernize existing power lines and gas transmission networks, as well as build new electricity generation facilities. The rest of E.ON's investment program consists of long-term financial investments, primarily the acquisition of new energy assets. The German concern is one of the most active and successful participants in privatization auctions in Eastern Europe.
Despite E.ON’s great interest in Russian gas and energy assets (remember that expansion of cooperation with Gazprom, including the exchange of assets, is currently being discussed), the adopted investment program does not disclose specific plans in this area of business. Most likely, they will be set out in the upcoming general strategy for E.ON’s activities in the Russian market. In any case, as they say at the concern’s headquarters in Dusseldorf, “the strategy contains projects whose implementation is quite probable today.”
A more than stable financial position opens up opportunities for E.ON to select several investment projects that will ensure the further growth of the company. However, Dusseldorf notes that the main selection criteria will remain the strategic importance and efficiency of investments.
E.ON identified Central Europe (including Germany) as the most important investment region. About a third of the planned funds will be spent here - 6.8 billion euros. Part of them will be used to finance two new power plants (coal and gas), the construction of which is expected to be completed by 2007. Against this background, the news that E.ON is going to intensify its activities in the renewable energy sector was almost sensational. And it plans to spend about a billion euros on promising projects in the field of hydropower, wind energy, and the use of biomass.
Another important focus of the investment strategy over the next three years will be financing E.ON's expansion in Eastern Europe. “On the one hand, we are purposefully complementing our shareholding in Central and Eastern Europe, on the other hand, we are investing significantly in ensuring the security of supply for our customers,” emphasized Wulf Bernotat, Chairman of the Board of E.ON. A total of 4.3 billion euros have been allocated for the concern's activity codenamed Pan-European Gas, which is carried out by the largest German natural gas importer E.ON-Ruhrgas. Approximately two-thirds of them will be invested in further acquisition of equity participations in enterprises in the region. The purchase of shares in the gas sector of the Hungarian oil and gas company MOL is named as the largest project. At the same time, a decision was made to intensify E.ON’s participation in the distribution of gas to consumers in this region, for which it is planned to allocate 1.4 billion euros for the construction of new gas networks and storage facilities.
As in previous years, Scandinavia and Britain will be important for E.ON. The concern has allocated 3.7 billion and 2.8 billion euros, respectively, for business development there. It is in the British Isles that it is planned to launch projects for the production of wind energy and the use of biomass. Yuri Shpakov, Berlin |
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