En+ and China's State Grid might raise $10 billion for construction of 10 gigawatts in capacity in Russia - source
MOSCOW. Oct 10 (Interfax) - Oleg Deripaska's En+ Group and China's State Grid Corp will be in discussion for building 10 gigawatts in generating capacity in Russia.
Government office deputy head Yury Ushakov told journalists that, in the framework of Prime Minister Vladimir Putin's visit to China on Tuesday, a memorandum of intention between EN+ and State Grid would be signed among various other documents. Ushakov did not specify the document's details.
However, a source in the Russian delegation told Interfax that the memorandum will set out the main areas of joint operations for the two companies, including plans to build new generating capacity in Russia. The document foresees discussions of projects with total combined capacity of 10 gigawatts operating on various types of fuel. The projects will focus both on the domestic market and exporting electricity to China. The companies might raise around $10 billion for implementing these projects.
En+ declined to comment on the memorandum's content. When asked whether this document bore any relation to earlier signed agreements between OJSC Eurosibenergo (part of the En+ Group) and China's Yangtze Power, a spokesperson for En+ said that the document to be signed concerns other projects.
By reaching an agreement with State Grid, Deripaska will have the opportunity to build 20 gigawatts in capacity in partnership with Chinese companies. To date, none of the Russian power companies interested in the Chinese market has such agreements. However, OJSC RusHydro announced negotiations with China in electricity generation while Russian gas giant Gazprom recently expressed its intentions for starting up negotiations.
So far, the agreements with State Grid will have a framework character. Both companies will continue to study options for partnership in generation, as well as several other areas. Eurosibenergo has been able to move further with Yangtze Power: both companies formed the joint venture YES-Power in 2010. The JV should commission up to 10 gigawatts in capacity in Siberia and the Far East. Three projects have already been decided: the Lenskaya CHP with 1,200 megawatts in capacity, Nizhne-Angarsk HPP with 600-1,200 megawatts and Transiberian HPP with 400-900 megawatts in Eastern Siberia. Electricity produced by this JV will be sold to domestic consumers in Russia and exported to China. Eurosibenergo and Yangtze Power are also interested in developing production of electricity equipment in Russia.
State Grid Corp is one of China's biggest enterprises. The company holds the monopoly over a portion of the Chinese electricity transport system. The corporation is a state-controlled company.