14 Mar 2023 14:49

Rosseti asks govt to find financing for Stage 2 of Russian Railways Eastern Section energy project

MOSCOW. March 14 (Interfax) - Federal Grid Company - Rosseti has asked the government to locate financing for the second stage of the energy supply project for the expansion of Russian Railways' Eastern Section.

"If everything is fine with regard to the first stage of the Eastern Section from the financing standpoint, and all sources have been brought in, synchronized, and are in the program, then there are still questions regarding the second stage," the head of the company, Andrei Ryumin said at a meeting with Russian Prime Minister Mikhail Mishustin.

"The issues of financing sources for the second stage have not been fully resolved. I would like to ask you to instruct the Russian government to work this out," the head of the company said.

"As for the first stage, out of 14 sites, 13 are complete as of now," Ryumin said. This year the company plans to complete the last one by commissioning the 500 kV Ust-Kut - Nizhneangarskaya line and the corresponding 500 kV Nizhneangarskaya substation in Buryatia. "In principle, everything in the first stage is on schedule," he said.

The second stage of Eastern Section expansion will involve the company's seven main power grid facilities, his report said. "This year we plan to power up three of them," he explained. Ryumin also noted that work on this stage is proceeding "according to the schedule" which is synchronized with Russian Railways. "We do not see any risks of disruption or delay," Ryumin said.

As reported, the first stage of expanding the section's power supply involves the construction of 2,500 km of lines and 3,500 MVA of transformer capacity, the total cost of which is about 160 billion rubles. Financing for the first stage is being handled by Rosseti from its own and borrowed funds.

Rosseti previously estimated the cost of the second stage to be about 250 billion rubles. The company has requested funding from the National Wealth Fund for this project in the past. "Possible sources: an additional rail tariff increase, a contribution to our charter capital, or the National Wealth Fund or other state subsidy," Ryumin said earlier, listing potential sources of financing, and citing government support for Russian Railways via an 11% freight tariff increase since June as one example.

The deadline for commissioning the main grid activities for the second stage of the expansion of the section is 2026, it was reported.