Austrian utility Verbund says it will decide by the end of 2007 whether to pursue an 800 million euro (US$1.1 billion) investment in a hydroelectric project in Russia.
“We are seriously looking into this hydroelectric project along the Angara River in Siberia and we want to come to a decision this year on whether we will launch a due diligence,” Verbund Chief Executive Michael Pistauer told a news conference.
Verbund and Russia’s HydroOGK, to be the world’s second largest hydro utility upon Russian utility restructuring, signed a memorandum of understanding in 2006 on cooperating to develop hydroelectric projects in Russia. (HNN 11/15/06) The Austrian utility would hold 49 percent in the joint venture and investment for the expected plant would total some 1.9 billion euros (US$2.6 billion), Pistauer said.
HydroOGK, aluminum producer RUSAL, and banking firm Vnesheconombank signed an agreement in April with regional officials to develop the Lower Angara region. Under the program, HydroOGK is to complete the 3,000-MW Boguchanskaya hydroelectric project to provide power to the Boguchany Energy and Metals Complex, a 600,000-ton-per-year aluminum smelter, and a 732,000-ton-per-year timber processing complex. (HNN 9/13/07)
State-controlled Verbund, which produces 80 percent of its electricity from hydro plants in the Alps and along the Danube, is struggling to expand at home, where almost every hydropower site has been exploited. After a plan to merge with fellow state-controlled oil and gas group OMV failed to win political support last year, Verbund started to explore options to spend its massive cash flow in the Balkans, Russia, and Turkey.
In June, Verbund announced it received approval from the European Union to proceed with a hydropower production joint venture with Turkey’s Sabanci Group. (HNN 6/5/07) Pistauer reaffirmed he was interested in projects in the Balkans and said investments could be financed without tapping capital markets.