Underlining its long-term commitment to the Russian power sector, the European Bank for Reconstruction and Development is providing the wholesale electricity generating company OGK-5 with a 12-year loan of €120 million. This will fund the construction of a new energy-efficient unit at its Nevinnomysskaya power plant in southern Russia.
Despite the impact of the crisis on energy demand, investing in the creation of new power capacity is crucial for Russia’s future and the Bank is ready to help the private companies which took over generating capacity as part of the sector’s successful reform to do this, said Nandita Parshad, Director of the EBRD’s Power and Energy team.
This sends an important signal to the financial markets on whose willingness to lend the future of Russia’s most significant structural reform to date depends.
This further strengthens our relations with EBRD, the second biggest international investor within OGK-5 and is a concrete sign of support to Enel Group’s growth strategy in Russia, commented Dominique Fache, Country Manager and General Director of ENEL S.p.A. in Russia and the CIS.
The agreement is another step forward in the commitments undertaken by Enel towards the Russian authorities in terms of new capacity construction; the new CCGT- 410 MW power unit is scheduled to enter service in 2010, Mr. Fache added.
A new combined cycle gas turbine will replace two outdated units, adding 80 MW of capacity at the Nevinnomysskaya power plant, virtually without an increase in gas usage.
The project, whose total cost is estimated at about €400 million Euros, is expected to cut carbon emissions by around 400,000 tonnes a year, thus enhancing the EBRD’s role as an agent of change, helping clients to raise their environmental performance to new heights.
Since 2001, the EBRD has invested over €1.3 billion in 11 operations linked to the Russian power sector, including this one.
In 2006, the EBRD acquired a 1.1 percent of the shares in OGK-5 at the first international public offering of Russian power assets to raise private funding to renew the sector’s outdated generating stock. The Bank increased its stake to 5.1 percent in 2008, by buying additional shares from OGK-5’s majority shareholder, Enel.