Nuclear power comes through with cash
When Russia privatized its crumbling power plants through 2008, new owners pledged to invest an eye-watering $820 billion. But that was before the credit crunch closed money markets, which has forced most energy firms to go back on their ambitious claims. Hugues de la Presle from Standard & Poors says their case for attracting investment is weaker.
“We see Russian utilities as still having weaker business profiles, and also much weaker financial profiles, especially in terms of liquidity.”
The only generator left out of the Big Sell-off was nuclear monopoly Atomenergoprom. It wants to raise its share of Russian electricity production from 17% now, to 25% in 2030. Anton Kovalevsky, Head of Investment at Atomenergoprom says state ownership guarantees its investment promises.
“We have unprecedented backing from the state. It currently provides 60% of our funds, but within 5 years we plan to be raising all money ourselves. Last week we issued a $1.7 billion bond, and will invest $68 billion in Russian electricity production by 2015.”
But the nuclear giant could find those plans derailed by the same state owners. Industry players are counting on being able to charge market rates for electricity from 2011, as the Russian government promised. But experts fear it will now keep price caps in place so citizens can recover from the crisis.