Several multinationals are now regretting their commitments to invest in Russia’s decrepit power network after being pushed into a bidding war for several generating companies of RAO Unified Energy Systems.
They’ve met in Moscow after UES’ failed promise of guaranteeing fair Gazprom supply and price to their plants. On Wednesday the introduction of an essential contract system between consumer and supplier was postponed again. Italy’s Enel had promised to spend $US 3.5 billion by 2012 on Russia’s power market but now the company revealed they regretted their commitment. “If I thought it was a bit early, we signed a capacity contract not exactly knowing the rules of the game, you should play a game when you know the rules before,” said Dominique Fache, Vice President of Enel. This week U.S.-led favourites Halcyon Advisors pulled out at the last minute to buy Southern generator TGK-4. Its boss admitted investors could no longer hope for big profits from Russian electricity. “Very few people in fact are expecting windfall returns on these investments somewhere between 4% and 14%,” David Herne, CEO of Halcyon Advisors.