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28 Sep, 2009 06:39

Inter Rao invests for longer term access to Romania and EU

Inter RAO UES is looking to invest millions of dollars in a 45 year old Transdniestrian power station, which will increase its access to EU markets if key contracts with Romania are renewed in the coming year.

The Dnestrovsk, Transdniester, power station began operations forty five years ago, and currently has 1.9 Gigawatts capacity. Using gas, coal and heavy fuel oil, it is one of the biggest power plants in Eastern Europe.

Its versatility served it well during the gas war between Ukraine and Russia early this year, according to Sergey Tolstoguzov, Board Member at Inter RAO UES, which bought the plant in 2005.

“During the notorious conflict, gas to the power plant was cut off and we had to burn coal and heavy fuel oil. To keep people of Moldova warm from the first of January this year we took up the responsibility to supply energy to all Moldova.”

Despite the economic crisis and falling electricity demand the plant has maintained employment for over two thousand people. The president of Transdniester, Igor Smironov, praised the company's management at its 45th anniversary celebrations .

”Inter Rao has shown itself to be socially responsible. There are no unpaid salaries and people did not lose their jobs. And that's despite a 40 percent fall in the industry.”

The plant has also become competitive in neighboring Romania’s energy market despite fierce competition from Ukraine. Located in the unrecognized republic of Transdniester, it’s Russia’s biggest energy asset abroad, and can export to Moldova, Ukraine and also the EU, through Romania’s grid.

Only four power units out of twelve are currently operational but that’s enough to cover the needs of homes and industry in Moldova and Transdniester, and provides additional capacity for export to Romania.

Inter RAO's management is aiming to increase export volumes., and prolong agreements with Romania which expire next year. The current output is less than a half of the plant's maximum capacity.

”Currently the power plant is producing about 700 Megawatts. About 300-400 Megawatts is peak load covering the demand of Moldova and Transdniestrian Republic, about 180-200 we export to Romania.

Inter RAO has already invested more than a hundred million dollars into the ageing power plant. It is looking to invest more than $600 million more with 4 power units out of twelve require replacement or major reconstruction. But that will only pay off if the industry picks up and new markets open.