Yesterday a memorandum of intentions to sign the first long-term power supply contract in Russia was concluded. The memorandum was signed by OJSC Russian Railways (RRW) and Rusenergosbit for 15 years. Previously only companies of Oleg Deripaska signed the five-year terms contracts against each other. In contrast with other power sales companies being on the verge of bankruptcy because of the financial crisis, Rusenergosbit may become the most profitable sales company in the country. Within the framework of the meeting of President of Russia Dmitriy Medvedev and Prime Minister of Italy Silvio Berlusconi, OJSC RRW and LLC Rusenergosbit yesterday signed a memorandum of intentions providing long-term power supply on the basis of 15-years contracts. As a source in charge of the information told "Kommersant", a final contract will be signed within two months. The parties do not disclose details of the contract but there is information that in order to calculate power price a formula will be applied. Rusenergisbit is one of the largest independent power supply companies in Russia. ESN Group of Evgeniy Berezkin holds 51% of Rusenergisbit, Italian power concern Enel - 49%. Power sales of Rusenergisbit increased 1,5 times in 2007 - up to 35 bln kWh, 85% of them comprised sales to RRW. The annual power demand of RRW amounts to 45 bln kWh. At present no one in Russia has long-term contracts. Rusal has been trying to sign long-term contracts with LLC Rusgidro for several years already, but yet no agreements have been reached. Only Krasnoyarsky Smelter buys power from Krasnoyarskaya HPP (hydro power plant) on the basis of five-year contracts. However both companies belong to Oleg Deripaska. Long-term contracts in terms of global financial crisis are advantageous not only for RRW but also for Rusenergisbit. Many sales companies are on the verge of bankruptcy because of the cash shortage caused by payment defaults and the lack of short-term credits (see "Kommersant" d.d. October, 27). Sales companies in Kaliningrad, the Far East , the Republics of Komi, Maryi L and Archangelsk have already sustained losses. Therefore at the end of October Minister of Energy Sergey Shmatko recommended to power sales companies to hold accounts in and obtain credit lines from core banks. However, many companies have already received refusals from them. Head of the Foundation of Energy Development Sergei Pikin is convinced that after concluding the contract with RRW, Rusenergisbit will be able to obtain any credit. "RRW has a smooth consumption curve, and the scopes of power delivery and price formula, under which the monopoly is going to buy it, will be specified in the contract. Thus, Rusenergosbit will be able to forecast its profit in a long term", - he says. Yet, in Mr. Pikin's opinion, it is unlikely to expect a large number of such long-term contracts in the future. "In order to conclude such contract both parties have to be sure that the duration of their existence won't be shorter than the duration of their contract. And only large state companies may be sure in duration of their existence now",- notes Mr. Pikin. He supposes that Transneft which is already a client of Rusenergosbit may follow RRW example. Alexander Seleznev, Uralsib analyst, presumes that the contract with RRW will help Rusenergosbit to minimize its costs significantly and thus to guaranty profitability. |
