The government will most likely agree to grant credits to the power generating companies that have applied to Igor Sechin, Deputy Prime Minister for help; however the amount of the assistance is still an issue for discussion. This is the opinion of the market analysts regarding the written application of the power generating companies that are the members of the non-profit partnership "Council of Power Producers and Power Industry Strategic Investors" (NPP CPP, to Mr. Sechin, asking for assistance in financing their investment programs. "We expect that the government will not say no to the strategically important power industry, as it concerns the implementation of investment programs of the power generating companies, necessary for steady industry development and economic growth", - say the analysts of Veles Capital Investment Company. By the initial estimates, power producers can borrow up to USD 50 billion at the rate of 12-14% p.a., the experts observe. The experts of Veles Capital give a positive estimation of this initiative of the power producers, as, despite the crisis, concessional loans will contribute to the steady development of the industry. The analysts point out that certain companies, for example, OGK-2 have already declared to the government their wish to make adjustments to their investment programs and, if possible, to review capacity supply contracts. In the opinion of the Veles Capital analysts, the option of adjusting the investment programs of OGK and TGK is a measure of last resort and is unlikely to happen at the moment. In the opinion of analyst Irina Filatova of Brokercreditservice Investment Company, the amount requested by NPP CPP exceeds the real need of OGK and TGK for the implementation of their investment programs. "Most likely, the loan amount of USD 50 billion can be sufficient for almost all power generating companies: OGK, TGK, FGC UES, RusHydro and IDGC", - the analyst says. However, the government just might agree to a certain adjustment of the investment programs of OGK and TGK, she observes. At the same time, Ms. Filatova adds that "we can only speak here about the cancellation of the plans to construct new power generation facilities; hence we cannot expect a big indulgence for the new owners of power generating industry". "Before any decisions are made we can only give a neutral evaluation to this news (regarding the possible assistance from the government). Provision of public loans to power generating and grid companies may have a positive effect on the power industry stock market", concludes Ms. Filatova. We would like to remind our readers that the day before Vyacheslav Sinyugin, Deputy Minister of Energy of the Russian Federation, reported that the Ministry and power generating companies were preparing a letter to the government with a request to provide financing of the power sector investment programs during the financial crisis. According to Mr. Sinyugin, here we speak about a request similar to that submitted earlier by the oil and gas companies. LUKOIL, Rosneft, TNK-BP and Gazprom applied to the government in October 2008 with a request to provide them loans under market conditions. Non-profit partnership "Council of Power Producers and Power Industry Strategic Investors" was created in 2008 on the initiative of the investors to the Russian power generating industry and power generating companies themselves. The founders of the NPP are IES-Holding, Eurosibenergo, LLC, SCEC, Enel, E.On, OGK-3, OGK-5, and "Southern Generation Company TGK-8". The main objective of the NPP is the representation of the interests of power generating companies, cooperation with governmental bodies and development of power generating policy. |
