INVESTMENT FIRMS
Russia power firms seek state loans to fund capex Reuters via Yahoo Philippines News Schwab Profit Falls 5.9% as Bear Market Erodes Fees (Update2) - BloombergWed, 15 Oct 2008 14:17:48 +0000
In order to avoid a looming shortage of electricity power producers are legally obliged to install a fixed amount of new generating capacity over the next few years. But OGK a major generator controlled by gas export monopoly Gazprom will petition the government to reduce this obligation as financing costs have spiked at a time of sharp growth in demand for power equipment the company said on Friday. Several power firms said commercial banks are quoting rates of percent on loans rendering many new constructions unfeasible. They have thus been forced to turn to the state said Igor Mironov head of the sector s main lobbying group. A lending programme for power companies.would undoubtedly bring stability to the system and create the necessary conditions for the long term development of the sector Mironov said. His organisation the Union of Electricity Producers has already submitted a proposal to the government to set up a lending facility he added. Russia plans to channel billion from its foreign exchange reserves to help its firms refinance foreign debts. The cost of revamping Russia s electricity systems was estimated at more than billion over the next five years by Russia s former power monopoly Unified Energy System . Mikhail Slobodin head of electricity holding Integrated Energy System said the money power generators have on hand from recent share sales will pay for no more than percent of their high priority projects. As a result the generators are at risk of starting a construction project and then not having enough money to finish it Slobodin said in comments e mailed to Reuters on Friday. SCALING BACK Before being broken up in July as part of a sweeping reform of the power sector UES warned that delaying investment could cause large scale blackouts and dampen economic growth by . OGK which has one of the industry s most ambitious expansion programme at a cost of billion roubles . billion to will be the first to confront the government with a request to scale back its construction programme. The board of directors will appeal in a memorandum to the energy ministry to correct the investment programmes of generating companies an OGK spokesman told Reuters. Energy Minister Sergei Shmatko said earlier this month the government will be ready to discuss the obligation of each generating company to build new turbines. We will discuss these difficulties with each company individually he added. 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