Targets and Objectives

The strategic objective of the Integrated Energy Systems holding company is to establish an interregional power corporation with a majority stake in four territorial generating companies (TGCs), and a leading retail company.

The corporate strategy requires the successful resolution of two key objectives:

1. Intensive participation in the reform of the Russian federal and regional electric utility industry with a view to the promotion of a free competitive market of power resources in which the Company would be amongst the top rank.
2. Organization of a full-service power utility catering for a wide range of industrial and residential consumers. To this end, core assets are being consolidated, advanced production technology is being implemented and business management refined.

Priority Lines of Business Development:

• promotion of the energy market;
• asset consolidation;
• customer orientation;
• employ a multi-utility approach;
• efficient management of resources and investments;
• skillful risk management;
• employment of advanced technology.

Promotion of the Energy Market

• A clear corporate vision of the development and implementation of the reform of the electric utility industry.
• Involvement in the organization of regional power generation facilities in regions where IES operates.
• Promotion of the wholesale power market.
• Participation in the development of federal and regional rate policy.

Asset Consolidation

• Obtaining control over generating facilities through participation in the privatization of the Russian electric utility industry (public WGC sale, increasing the share in TGC equity).
• Asset consolidation with a view to establishing reliable resources, providing more efficient generation and marketing power, via an incipient vertically integrated generating company.
• Obtaining control over combined regional infrastructural assets in order to establish and develop an efficient utility company.
• Pooling the assets of core companies engaged in power facilities construction, engineering and maintenance in the Urals, Eastern and Western Siberia to form one leading power engineering corporation.
• Optimizing the overall assets pattern to create an efficient combination of vertical integration and a regional agglomeration of electric power generation and combined and infrastructural services.

Customer Orientation

• Creation of a loyal customer base through the offering of competitive conditions of power supply and high-quality services.
• Renovation of generating capacity, upgrading of power utilities based on the existing requirements of the market and consumers.
• Integrated approach to customer problems. The development of customer-oriented, unique products and solutions.

Multi-utility approach

• Combine electricity, heat, and gas distribution businesses to achieve synergies.
• Offer several power supply options based on a diversified range of energy resources.
• Use a consolidated engineering infrastructure.
• Use a unified system to coordinate power resource supplies and manage cash flows.
• Employ an integrated approach to improve the performance of energy infrastructure in regions by optimising the resource potential.

Efficient Management of Resources and Investments

• Implementation during the course of business formation and development, of an efficient system of consolidated assets and resource control.
• Application of international business development standards.
• Implementation of advanced operational management techniques.
• Implementation of efficient cash flow control techniques.
• Enhancing the investment appeal of the Company’s businesses.

Skillful Risk Management

• Resource cost minimization based on the price and technology risk mitigation of the Company’s businesses (diminishing the dependence of power generation prices on prices of energy products).
• Structural and financial business optimization through efficient management and operational cooperation. Vertical integration of key businesses.
• Minimization of investment risks through diversification of the Company’s power business.
• Efficient use of power resources based on optimized capacity utilization. Exploring every opportunity to combine resources for electric power generation and distribution.

Employment of Advanced Power Generation and Distribution Technology

• Building state-of-the-art cost-effective generating facilities.
• Ensuring the optimal combination of: production efficiency, investments, improvements in power supply, quality, and reliability.
• Increasing the profitability of power generation and utility services via improvement in cost effectiveness.