OAO OGK-5, a Russian wholesale power generator based in Yekaterinburg in the Ural Mountains, plans to raise $400 million over the next two years to help fund a $1 billion (€303 million) expansion.
OAO OGK-5 will sell international bonds denominated in rubles either next year or the year after, Nikolai Morilov, head of strategy at OGK-5 said at the Konakovsk power plant in central Russia today. The company said yesterday it hired ABN Amro NV to organize a $200 million loan.
National utility OAO Unified Energy System is spinning off OGK-5 and other units to raise some of the $110 billion the government plans to invest in the power sector over the next four years. OGK-5 last year became the first Russian generating company to sell shares to the public, raising $459 million. Another 25% of the company is to be sold in May. Morilov said OGK-5 is considering building two coal-fired power plants with combined output capacity of 800 megawatts, or about the same as a nuclear power plant.
The company hasn't made a final decision yet, though it has secured supplies of coal from closely held Moscow Coal Basin, Morilov said. Russia is racing to upgrade its largely Soviet-era power network as a nine year economic boom increases demand for electricity. OGK-5 increased output 9% to 40.4 billion kilowatt hours last year, when national electricity use advanced 4.2% to 962.4 billion kilowatt hours. Russia has seven wholesale power generators, or OGKs, and 14 territorial power generators, or TGKs. All are now subsidiaries of Unified Energy. The utility is scheduled to be broken up and dissolved by 2008. (Bloomberg)