After the Ministry of Energy spoke out against financing the deficit of Inter RAO's investment program through an additional issue in favor of state-owned Rosneftegaz, the energy holding began to look for alternative ways to cover the deficit. Inter RAO's investment program for 2013-2017 is 184 billion rubles, of which the holding can spend 124 billion rubles itself, said the company's chairman of the board, Boris Kovalchuk. The government should determine the sources for covering the deficit - the issue is still open, he added.

There is also a dispute over the size of the missing sum. The Ministry of Energy has agreed on the deficit of the Inter RAO investment program at the level of 24 billion rubles for current projects, Kovalchuk said. The valuation of Inter RAO is 60 billion rubles. An additional issue in favor of Rosneftegaz is an ideal option, Kovalchuk explains. According to his calculations, in the event of full coverage of the deficit, the state structure can receive 13-14% of shares in Inter RAO. However, Deputy Minister of Energy Mikhail Kurbatov proposed increasing the debt burden of the energy holding. Yesterday, a representative of the Ministry of Energy did not respond to the request.

Kovalchuk claims that it is impossible to borrow more, otherwise Inter RAO will exceed the debt/EBITDA threshold of 3, set by banks (as of December 31, 2012, the company's debt burden was 2.45). Attracting a strategic investor will not save the investment program either - the market value of 3% of shares intended for the "strategist" (the quasi-treasury package owned by Inter RAO Capital - 13.93%) is too low, Kovalchuk argues. Yesterday, 3% of shares cost 3.96 billion rubles on the Moscow Exchange. Over the past two years, Inter RAO has fallen in price by 4 times.

Kovalchuk believes that an alternative to the additional issue is the sale of non-core assets: the sale of 40% of Irkutskenergo or stakes in the assets of IES Holding (the main owner is Viktor Vekselberg). The sale of the Irkutskenergo stake to Rosneftegaz depends on the government's decision to finance the Kambaratinskaya hydroelectric power station in Kyrgyzstan (estimated at $2.5 billion), Kovalchuk recalls. Preliminary documents oblige Inter RAO to direct funds from the sale of Irkutskenergo to this project. But a representative of Deputy Prime Minister Arkady Dvorkovich (curator of the fuel and energy complex) emphasizes: it is too early to talk about financing - there is not even a feasibility study for the project yet. Inter RAO is negotiating the sale of the Irkutskenergo stake with the majority shareholder, Oleg Deripaska's EuroSibEnergo, Kovalchuk said. But so far, according to him, they have only managed to agree on the payment of dividends: “In July we will receive more than 1 billion rubles.”

The buyer of shares in IES Holding (27.71% in TGK-6, 41.37% in TGK-7, 0.06% in TGK-5 and 2.49% in TGK-9) could be a strategic investor or the holding itself, Kovalchuk said. The sale of all packages in TGK could bring Inter RAO $700–900 million, he estimates. A representative of IES Holding declined to comment.

In addition to the investment program deficit, Inter RAO expects to solve the problem of declining income and profitability. Sales and power generation are “not in the best condition” due to strict tariff regulation and poor payment discipline, Kovalchuk admits. Inter RAO is considering engineering and heat grid businesses as additional sources of income, he claims. The energy holding intends to build “not only in its own markets.” In 2012, it created a subsidiary, Inter RAO Engineering, which currently has 10 projects in its portfolio. The holding plans to develop the heat grid business in those regions where it already has its own generation – Omsk, Tomsk, Bashkiria.

Inter RAO is looking for money