26 Oct 2010 16:43

RusHydro to determine role in Turkish, Kazakh projects by mid-2011

MOSCOW. Oct 26 (Interfax) - OJSC RusHydro , which operates the majority of Russia's hydroelectric power plants, intends by the middle of next year to determine its role in projects in Turkey and Kazakhstan, senior company executive George Rizhinashvili told the press.

RusHydro is considering buying a business that builds hydropower plants with generating capacity of up to 700 mWt in Turkey. The company is also considering a project in Kazakhstan for the construction of a hydropower station with 200-250 mWt generating capacity.

The project nearest in time is the building of a 125-mWt hydropower station in Vietnam.

Turkey, Kazakhstan, and Vietnam are "three growth points where work has already begun," Rizhinashvili said. There is understanding as regards projects in these countries as to when decisions will be made about RusHydro's participation and when project assessment will be done, he said.

In Turkey, the company is looking at buying a company that has already done some of the construction-project work, particularly the clinching of financial contracts, and has begun working on the building site. Plans call for building a hydropower complex with generating capacity of from 550 to 700 mWt.

Work on this project is being done on the basis of an EPC (engineering, procurement, and construction) contract for the building of a turn-key facility.

Rizhinashvili said that the Turkish market is a promising one from the standpoint of electricity prices, which now stand at more than 15 cents per kWt hour and could rise to 21-30 cents per kWt hour in two and a half years.

RusHydro has already secured a cooperation agreement with its Turkish partners that will give the Russian company exclusive rights to play a role in the project, Rizhinashvili said. A final decision will be made after the advisability of such participation is evaluated - probably by mid-2011.

As to projects in Kazakhstan, Rizhinashvili said that these involve the building of hydropower plants with combined generating capacity of 200-250 mWt. The sites at which the stations are to be built are located in the country's border region. RusHydro has signed an agreement with regional authorities that will allow company specialists to do on-site project analysis.

In Vietnam, RusHydro plans to take part in the building of a hydropower plant with 125 mWt generating capacity. Rizhinashvili said that his company has already "taken a detailed approach to analyzing the investment project," saying that company plans include inking project documents soon. There are a few difficulties associated with Vietnamese law, he said. "It is not ruled out that there could be changes to a range of legal documents [in-country]," he said, and the parties have already discussed this possibility.

These are not the only places where RusHydro plans investment projects, they are just the ones where company involvement has been most worked-through, Rizhinashvili said. The company earlier numbered Eastern Europe, Latin America, and Africa among the regions it is interested in.