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How should power industry capex be financed in Russia?

Data:Unified Energy System of Russia www.rao-ees.ru/en

The current market situation has highlighted the difficulties for companies to finance capex in the power industry without a clearly formulated tariff policy. Without this, banks and other investors are unable to calculate any future cash flows, which in turn lead to the inability to provide much needed funds.

The opportunities to revitalise the Russian power-generation industry following the final liquidation of United Energy Systems bring with them financing challenges for the new owners of OGK and TGK power blocs. Owners are preparing plans to increase efficiency, reduce emissions and find a winning place in the Russian power generation and distribution market.

In particular, great effects must be made to secure low-cost fuels in the form of long-term gas supply and coal contracts, financiers must see a marriage between fuel supply cost and power offtake revenues that allow long-term financing to be reliably achieved.

SMBC group will put its immense experience in Asia, the Americas, Europe, and the Arab World at the disposal of Russian power generation companies, including its knowledge of renewable energy and emissions reduction.