RusHydro discussing govt funding options, considers project financing
MOSCOW. Dec 5 (Interfax) - The management of RusHydro expects to receive funding from the government and is discussing the format for raising these funds, Andrei Bugrov, who serves as an independent director on the power company's board, told Interfax.
"They've been promised budget money for a whole series of projects that are a priority for the government. They're discussing what this will be - project financing or some sort of borrowing. There are projects for which a financing structure needs to be found," Bugrov said when asked about options for expanding financing sources for the company's investment program.
At the end of November, RusHydro's board approved the priorities for the company's development in 2014, which include work on expanding such financing sources.
Bugrov said management is now working on options for raising money and will later submit them to the board of directors.
Asked whether RusHydro might get money from the National Welfare Fund (NWF), Bugrov said this is one option. "This is also being discussed. As one of the sources," he said.
Asked when there might be some clarity on the issue of government funding, Bugrov said "RusHydro's strategy will be discussed in the middle of the summer of 2014."
It was reported earlier that the Energy Ministry has requested 35.3 billion rubles in NWF funding for RusHydro. The ministry said the money could be used to develop power grid infrastructure in Russia's Far East. Energy Minister Alexander Novak also said that RusHydro could get 100 billion rubles from the NWF on a repayable basis in order to develop thermal generation and hydro plants in the Far East. Subsequently, Novak said that the company could get NWF money after it presents the rationale for building flood-control hydropower plants in the Far East.
Novak has also proposed channelling 65 billion rubles into restructuring the debts of RusHydro subsidiary RAO Energy System of East (ES of East). The energy and finance ministries believe RusHydro projects could be financed by pension funds and government guarantees.
RusHydro has already received 50 billion rubles from the federal budget to build four thermal power plants in the Far East.