Lukoil's power company VDK-Energo may be merged with EL5-Energo

MOSCOW. June 19 (Interfax) - The board of directors of PJSC EL5-Energo has greenlit the signing of a confidentiality agreement with JSC VDK-Energo, EL5-Energo said in a disclosure.

Both companies are controlled by Lukoil )

The agreement's purpose is to exchange information for analyzing, processing, and evaluating data, documents, and processes regarding the business activities and financial, economic, legal and organizational status of the parties and their affiliates in connection with the potential reorganization through VDK-Energo's merger into EL5-Energo, the disclosure said.

In the summer of 2024, VDK-Energo ordered services for a comparative analysis of the company with EL5-Energo. This involved developing the organizational structure of the merged entity. The objectives of the purchase included identifying the potential for improving economic performance of both VDK-Energo and EL5-Energo separately, and for the merged company.

VDK-Energo was established in 2021 and brings together the power industry assets of Lukoil. It's main line of business is electricity and heat generation. The company includes 16 power plants with combined capacity of 3.3 GW, according to its website. The company generates 14% of electricity in the southern Russian energy system and is the region's main heat supplier.

Lukoil became a shareholder of EL5-Energo, formerly Enel Russia, in October 2022 and had amassed a 65.63% stake by January 2025. EL5-Energo has three gas-fired power plants - Konakovskaya GRES, Nevinnomysskaya GRES, and Sredneuralskaya GRES - as well as wind farms in the Rostov and Murmansk regions with combined capacity of 5.9 GW.