26 Mar 2020 15:43

RDIF, Arab partners pull out of Smart Grids project with Rosseti

MOSCOW. March 26 (Interfax) - Rosseti is now the sole participant of LLC Infrastructure Investments 3, set up to carry out a Smart Grids project and which previously had an entity controlled by the Russian Direct Investment Fund (RDIF) and an Arab company as co-owners, according to SPARK-Interfax.

The change occurred on March 25.

LLC RDIF Asset Management held a 49% stake in LLC Infrastructure Investments 3 and LLC Thirty Seventh Investment Company of the UAE held 51%. Rosseti now owns 100%.

RDIF chief Kirill Dmitriev last spoke about plans to exit the project in December. He said the RDIF planned to exit two projects into which National Wealth Fund money had been invested with the RDIF's involvement. The first is the project with Rostelecom to Bridge the Digital Divide and where "we have invested NWF money and shown return of 30% more than if that money had been invested in securities," he said.

The second is the Smart Grids project with Rosseti "where have installed more than 100 smart meters," he said. NWF has also been invested there with good returns. The project showed "a reduction of 40% for energy losses where our meters are installed."

It was always the plan for Rosseti to increase its stake in Smart Grids to 100%. "Consent to buy [up to 100%] was obtained in order to sign an options agreement as stipulated by the investment project's passport and approved by the Russian government. The option enables us to gain control of the project company if the investors achieve planned project parameters," Rosseti chief Pavel Livinsky has told Interfax.

He was referring to the implementation of a Smart Metering system in the Kaliningrad, Yaroslavl and Tula regions. Smart Metering is the first step towards Smart Grid technology. It was envisaged that Rosseti would lease equipment from Infrastructure Investments 3. Debt financing via bonds would not have exceeded 1.1 billion rubles and the NWF's share of funding would not exceed 40%.

The Russian Accounts Chamber said last year that the Smart Grids project was taking too long and that it must be expedited. "Instead of one year it has taken more than three years," the chamber's auditors said. Only in the Tula and Kaliningrad regions had grids gone digital by May 2019. Work in the Yaroslavl region came to a stop in 2016 and the project's further implementation has yet to be decided on. The chamber also said the meters in use did not always meet all of the required specifications.

Rosseti's Livinsky told Interfax back in 2018 that there had been "certain delays" in the Yaroslavl region and that Rosseti was working "with colleagues to get measures on schedule and make up for the delays."