Bloomberg News

Russia’s Federal Grid May Invest 180 Billion Rubles This Year

January 23, 2009

Federal Grid Co. may invest 160 billion ($4.9 billion) to 180 billion rubles this year as Russia’s long-haul power distribution monopoly seeks to cut spending, Chief Executive Officer Andrei Rappoport said.

The state-controlled company will present its investment plans to the government next month, Rappoport told the Vesti-24 television channel in an interview today. The company is reducing its four-year spending program by 25 percent, which would affect construction in regions such as oil-rich Tyumen, he said.

The power distributor said in November it planned to sell 146.5 billion new shares this month to build new electricity lines and transmission plants. The sale, which was due to be open to the public, may now be reduced in size as the government readjusts spending to lower oil prices, Sergey Arinin, an analyst with JPMorgan & Chase Co. in Moscow, said in a report today.

“The government may cut state-sponsored electricity investments in favor of social spending and anti-crisis rescue measures,” Arinin said. He expects Federal Grid to increase reliance on bank loans, a more expensive source of funding.

Russia passed a law in June that says the state will boost Federal Grid’s capital by 51.7 billion rubles at the start of 2009. The monopoly had planned to spend 840 billion rubles on new capacity and upgrades through 2012.

To contact the reporters on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net.

To contact the editor responsible for this story: scasey4@bloomberg.net


Coke's Big Fat Problem
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus