Russian utility advances spin-off of HydroOGK

The board of Russia’s Unified Energy System (UES) endorsed share exchanges and initial public offerings to advance its power reform agenda, including the partial spin-off of giant hydropower generator HydroOGK.

The reforms, approved by the board July 27, are to spin off generating assets from UES, which controls the world’s fourth-largest power network. They eventually are to lead to the dissolution of the power monopoly and the creation of a competitive market.

In its place, territorial generating companies, or TGKs, will group cogeneration plants. Electricity-only generators have been merged into six wholesale generators, or OGKs, each with 8 to 9 gigawatts spread around the country.

HydroOGK will operate as a separate entity under majority state control, while Federal Grid Co., FSK, will remain under state ownership.

Announcing the board’s latest decisions, UES said it set stock swap ratios for investors in individual hydropower plants to acquire shares in HydroOGK, with state-controlled gas monopoly Gazprom getting special ratios. HydroOGK is to hold an initial public offering of stock by the end of March 2008. (HNN 5/16/07)

Norilsk Nickel and SUEK, which both own large power interests, will only be allowed to acquire shares in TGKs and OGKs — but not HydroOGK — via share swaps. The Federal Grid Company will not be included in the swap scheme, which should be put to shareholders on October 26.

HydroOGK is listed with an installed capacity of 23,300 MW and generation of 75.2 billion kWh in 2006. It produces 20 percent of all Russia’s power, acting as the backbone of the power industry by stabilizing supplies and ensuring reliability of the system.

Although HydroOGK is being spun off from UES under sector reforms aimed at introducing competition, the state will retain control. Once the restructuring is complete, HydroOGK will be the world’s second-largest hydro generating company after Hydro-Quebec, combining 50 hydropower stations. (HNN 6/29/07)

Previous articleChina to seek construction, equipment for 117-MW Shihutang
Next articleUPDATE – Canada miner studies another hydro at second DRC gold site

No posts to display