The crisis does not stop the power generating company At the moment, the power producers, who ask the government for concession loans to finance their investment projects, are trying to solve the issue of borrowing funds using traditional methods. On Friday Mosenergo, a Gazprom affiliated company announced its plans on bond placement in the amount of RUR 15 billion. During the crisis the power producers were confronted with the necessity to undertake debt obligations as by non-fulfilling the investment programs they risk to be subject to heavy penalties. However, according to analysts, the local placement market is closed now. The RBK Daily source is of the opinion that bond placement is one of the methods of obtaining public loans. The analysts have calculated that in total the power producers need to attract about USD 34 billion through debt financing until 2012. While stock markets are going through a shake-up, the power producers need to search for funds to finance their investment programs. Mosenergo, a Gazprom affiliated company does not exclude alternative methods of funding. As the company reported on Friday, its Board of Directors approved the issuance of bonds in the amount of RUR 10 billion and commercial papers in the amount of RUR 5 billion on 16 October. All securities are planned to be placed through public offering. The company does not report the planned date of the placement. It is also not disclosed who will be the provider and potential investors. Power producer have found themselves in the most vulnerable position during the crisis when they urgently need development funds. Generators are obliged to introduce new facilities independent of the situation in the market as before purchasing OGK and TGK the investors signed contracts for capacity provision, otherwise, they will be have to pay heavy fines. Analyst Alexey Buldgakov of Troika Dialog Investment Company says that the initial offer market for local bonds is closed completely and for long to any issues of any companies. Recently private power generators addressed the government with a request to provide concessional loans to finance projects under the power industry investment programs. The government received the same requests from oil and gas companies. The source of RBK Daily in one of the investment banks does not exclude the fact that Mosenergo relies on receiving funding through concessional public loans. It was not possible to get an official confirmation thereof on Friday. The whole power sector is in need of solid loans. According to Derek Weaving, Head of the Power Sector Analysis Group of the Renaissance Capital Investment Group, out of the whole power industry investment program in the amount of over USD 111 billion, the sum of USD 34 billion should be attracted through loans. In his opinion, the following generating companies of Gazprom experience the need for borrowed funds most of all - OGK-2, TGK-1 and Mosenergo, as well as OGK-1, which was not sold at all. "All of them are confronted with the necessity to attract over USD 3 billion", recaps the expert. |
