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Russian electricity reform gets EUR80 million boost
RAO UES subsidiary will modernise its IT system
The EBRD is lending €80 million to a subsidiary of RAO UES (United Energy
Systems of Russia), the holding company which owns much of the country’s power
sector, as part of a bold government-approved plan to overhaul the electricity
system.
The restructuring of the power sector is pivotal to the economic future of
Russia. Reform of the sector, due to be carried out over the next decade, will
unbundle monopoly activities such as transmission and distribution from
generation and supply to stimulate the development of a competitive
electricity market. Electricity transmission, dispatch and market operation
responsibilities, previously handled directly by UES, have already been split
into three new entities. One is the System Operator (Joint Stock Company
System Operator – Central Dispatching Office for the United Energy System),
which is responsible for the safe and reliable operation of the power system.
The complexity of the evolving competitive power market will require the
System Operator to process ever-increasing amounts of information. The EBRD
loan to the System Operator – the first international finance raised by this
subsidiary of UES since it was created in 2002 -- will be used to upgrade its
technology to ensure reliable and efficient supply in a competitive market
environment.
Implementing state-of-the-art technology of the type used internationally by
most system operators – known as a supervisory control and data
acquisition/energy management system (SCADA/EMS) – will help upgrade the
Russian power system to the standards of its European neighbours. In future,
this should also encourage cross-border trade.
The loan is split into a 10-year, €60 million “A loan” from the Bank itself
and a €20 million “B loan” over seven years syndicated to two commercial
lenders, Raiffeisen Zentralbank Österreich AG and Bayerische Landesbank. It
follows a €100 million EBRD loan extended in 2001 to RAO UES to help set in
motion the restructuring effort. The EBRD will continue close cooperation with
the government throughout the restructuring of the power sector.
The EBRD is proud to be associated with such investments, which promote
liberalisation and competition in a vital sector of the Russian economy, the
EBRD’s President, Jean Lemierre, said at the signing today. Mr Boris Ayuyev,
Chairman of the Management Board of JSC SO-CDU UES, added: “We expect the main
advantages of the new system implementation to be an increased reliability and
quality of operational control, as well as improved efficiency of power system
operation, with substantial overall benefits for the wholesale electricity
markets.”
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