Sberbank funding for power plant reconstruction

Published time: 25 Aug, 2009 08:22 Edited time: 25 Aug, 2009 12:22

Sberbank, the state-owned Russian bank, says it is ready to fund reconstruction work at the country's largest hydroelectric power plant, following the deadly disaster there a week ago.

The dam is being rebuilt by the company that owns the plant, and is expected to take at least three years. The death toll of the disaster now stands at 71, after rescue workers found the bodies of two more people in the rubble on Tuesday. This leaves four more people unaccounted for.

Sberbank has agreed to repay mortgage loans issued to the victims, and those who lost their homes.

“We are ready to sign an agreement in August and start the financing at the beginning of September,” said the bank's CEO, German Gref. “It’s up to $650 million given on the most favorable terms.”

“By the end of this year, we will be ready to open a credit line of about $320 million,” he continued. “The money will be directed to building a waterway system, and I think that within two weeks we shall make all the necessary decisions to be able to start the funding.”

Meanwhile, an investigation into the reasons for the disaster is still underway. On Tuesday, the acting chair of the hydroplant’s owner, RusHydro, Vasily Zubakin, said that human error was not to blame.

“At the moment we believe the disaster was not caused by human factors, but until the investigation is over, the reasons will not be voiced,” he said while meeting relatives of those killed or missing in the incident.

The main cause of the accident at the hydroplant is believed to have been technical failure in braking system of one of hydroelectric units which was working above limits, said the head of Russian Technical Supervisory Authority, Rostekhnadzor, Nikolay Kutyin. A technical check at the plant, conducted by Rostekhnadzor last year, did not reveal any malfunction, he added.

Last week, the Investigative Committee announced they had dismissed the possibility of a terror act being the cause.

Shortly after the disaster happened on August 17, Emergency Ministry officials named a water hammer effect as the reason, but this was later called erroneous by RusHydro.