The 400 MW Yaivinskaya CCGT plant reaches efficiencies of 56.6 per cent<br>Credit: E.ON Russia
The 400 MW Yaivinskaya CCGT plant reaches efficiencies of 56.6 per cent
Credit: E.ON Russia

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When a geographic region covers about one-eighth of the world’s land surface, the term ‘country’ takes on a whole new meaning. Stretching from Kaliningrad to Big Diomede Island in the Bering Strait, the territory of Russia is blessed with an abundance of natural resources. They have granted Russia the status of global energy giant.

The vast amounts of coal, oil and gas in particular have traditionally provided Russia’s heavily industrialized economy with the comparative advantage of cheap energy. Powered by this cheap electricity, the economy regained traction after a transitional decade of decline in the 1990s.

With the World Bank forecasting GDP growth of 3-4 per cent in the coming years, Russia’s outlook is stable and promising. But in spite of the abundance of natural resources, its policy makers struggle to define a model that will both sustain affordable energy and attract investments into its ageing power sector. The sector’s various stakeholders now have the common goal of coming up with a harmonious model to power modern Russia.

Created during Soviet times as the backbone of a planned industry-oriented economy, the majority of electricity assets of Russia’s unified electric energy system were transferred into the open joint-stock company Unified Energy System of Russia (RAO-UES) by the new government of the Russian Federation in 1992.

When Anatoly Chubais was appointed president of RAO-UES in 1998, he was tasked with what would subsequently be recognised as one of the most ambitious reform processes ever undertaken. Launched in 2001, the large-scale reform of the electric power sector was aimed at increasing private ownership by 2008, ensuring price liberalisation and full competition in power generation by 2011, and granting third party access to network infrastructure.

While the government has retained control of the power grid, its dispatching system, the nuclear sector and most of the hydroelectric power plants, the inflow of investors in the generation niche resulted in a significant increase in capacity.

Russian oligarchs, together with three European utilities – Germany’s E.ON, Enel of Italy and Finnish Fortum – were allowed to enter the market on the condition that they would invest in new capacity and plant modernization. They were welcomed by a government incentive plan, known as Capacity Supply Agreements (CSA), and a promise of attractive returns on investment (ROI) through the deregulation of electricity tariffs. However, the subsequent price hike has resulted in additional pressure on the country’s industrialists – the highest consumers of energy. Tasked with keeping these industries cost-competitive, Russian policy makers have a significant task ahead them.

A second wave of reforms?

Sergey Novikov   “The most important aspect is to find a balance between the interests of the investors and the consumers of electricity,” says Sergey Novikov, head of the Federal Tariff Service. When asked about the recent increase in electricity tariffs, Novikov reflects on the period 2010-11 when the decisions of the regional regulatory authorities, which are independent of the Federal Tariff Service, led to a hike in tariffs.
Sergey Novikov, head, Federal Tariff Service of Russian Federation

Commenting on the impact on small to medium-sized businesses, Novikov recalls that “they saw their prices increasing abruptly, by 30-50 per cent, urging us to adjust the regulatory framework.

“Today we also have the very important task of protecting investors. Apart from finding the right balance, we therefore also need to make the right decisions. Capital structures need to be balanced out so that financing can come from tariffs, the budget or from investments,” he concludes.

Although the CSA model is approaching its natural end, generating companies remain puzzled over what will replace it. While still profitable today, generation companies in Russia are anxiously waiting for further reform of the power sector to justify their much-needed investments in the modernization of their facilities. On example is Gazprom Energoholding. With its 80 power plants totalling over 37 GW, it is the largest generator in Russia and one of the top-ten worldwide. Without further reforms, however, the company, which is majority state-owned, will see its assets increasingly challenged by depreciation.

Denis Fedorov   “I can say that today 35 per cent of the equipment in our power plants has been in use for more than 50 years. If we do not start to invest in modernization now, by 2020 almost 50 per cent of our equipment will have an operating life of more than 50 years,” explains Denis Fedorov, general director of Gazprom Energoholding.
Denis Fedorov, general director, Gazprom Energoholding


Maxim Shirokov   “The current electricity prices do not provide for payback even at a moderate rate of return of 13 per cent,” says Maxim Shirokov, CEO of E.ON Russia. Founded on the basis of five former RAO-UES power stations, E.ON Group rapidly became the largest foreign investor in the Russian power sector.
Maxim Shirokov, CEO, E.ON Russia

Today, its Russian subsidiary is the most efficient thermal power generation company in Russia and owns one of the best fleets of the company globally. Nonetheless, to continue investing in energy efficiency and sustain its 10,345 MW of capacity in Russia, the company is urging the Russian government to develop a clear-cut strategy that can provide for the necessary returns.

“Our industry is desperately waiting for the second wave of reforms. The current state of the market is highly regulated and hands-on driven, which is not good for investments,” adds Shirokov. Going forward, Shirokov sees two possible options for the country’s policy makers: subsidized governmental support or thorough reforms. “Frankly,” Shirokov adds, “we prefer the second option rather than the first mainly because one-off government stimuli do not benefit the market as a whole.”

With a continuing vagueness on what shape a potential second wave of reforms could take, 2013 could represent an important turning point for the sector.

Putting the I in ROI

On the one hand, the Russian government has made it clear that new investment into its power sector cannot rely too much on government subsidies while, on the other, the private sector remains reluctant to invest without any government guarantees on ROI. The Russian banking sector, in the meantime, upholds a cost of borrowing that is barely tempting for private investors.

alt   “The foundations of the power sector reforms lay in the fact that modernization would only become possible through market mechanisms. But there is a strong disparity between the money needed for modernization and the revenues that can be raised from the end-user side,” says Ivan Grachev, chairman of the State Duma Energy Committee.
Ivan Grachev, chairman, State Duma Energy Committee

“We need federal investment programmes specific to our energy sector. Moreover, we require better regulations around energy efficiency. All in all, drastic changes are required,” Grachev adds.

Pattern of Russia's electricity consumption over the last 20 years<br>Credit: RusHydro
Pattern of Russia’s electricity consumption over the last 20 years
Credit: RusHydro

Making energy efficiency a national priority has been a noteworthy step forward for Russia, a country where saving electricity or heat in the past would barely imply significant financial savings because of the low tariffs.

The International Energy Agency, for instance, stated that “according to the World Energy Outlook 2011, if Russia had used energy as efficiently as comparable OECD countries in each sector of the economy in 2008, it could have saved more than 200 million tonnes of oil equivalent, equal to 30 per cent of its consumption that year.”

Moreover, as indicated by a joint report by the International Finance Corporation and the World Bank, a more energy-efficient economy would also allow Russia to increase its oil and gas exporting earnings. According to the 2011 report, Russia’s energy intensity costs in the region of $84-112 billion per year in terms of lost export revenues.

These indicators have not gone unnoticed by policy makers, which in 2011 implemented Law 261: On Saving Energy and Increasing Energy Efficiency. The programme aims to reduce energy intensity by 40 per cent by 2020 (compared to 2007). It will be a long journey, but to help achieve this target, President Vladimir Putin has called upon foreign technology providers to partner with Russian companies in the area of energy efficiency.

Looking outside Russia’s borders

Vladimir Babyak   Up to 2007-08, power stations in Russia were still being built by generation companies themselves, through subcontractors. “The last power plant constructed in this method was built near Nizhny Novgorod,” recalls Vladimir Babyak, general director of the medium-sized Russian EPC company Intertechelectro.
Vladimir Babyak, general director, Intertechelectro

As a result of the power sector reform, companies like Intertechelectro rapidly understood that a new market model for power generation would also require a new group of EPC companies.

In just a few years, several of these newly-formed organizations have managed to gain a breadth of experience in new construction. Now, these companies are preparing themselves for a wave of new projects that will focus more on modernization instead.

To rapidly ramp up their competences, this new generation of Russian EPC players looks at – or at least recognizes the value of – pulling in experienced players from outside Russia’s borders. These experienced international EPC companies, in turn, find themselves with a range of potential Russian partners.

“With regard to the construction of power plants, foreign companies eventually have to address Russian partners to submit documentation in order to receive the necessary approvals or permits. Consequently, we operate with a number of foreign partners, each claiming that without the participation – or input – of a Russian company they would never be able to succeed,” he says.

“The first power plant Intertechelectro built comprised of two 62 MW generating units in Noyabrsk. Subsequently, we commissioned power generating units with a 110 MW capacity and a power unit of 230 MW. Consequently, it would be interesting either to commission larger power units or move into coal-fired power plants. Moreover, we would be interested in conducting a project in cooperation with a western engineering company. This would provide us with the opportunity to share knowledge and expertise,” Babyak concludes.

Even though young Russian EPC companies like Intertechelectro, which was established in 2005, now focus on the Russian market, their engineers and experts still enjoy a good reputation abroad. Many of Russia’s engineers have already worked on construction projects in regions such as North Africa and the Middle East.

Aleksandr Yushin   For 80 years, local engineering company ORGRES has been sending its engineers to construction projects across the globe. “These international projects are testament to the brand that ORGRES represents,” says General Director Aleksandr Yushin.
Aleksandr Yushin, general director, ORGRES

“They give us the opportunity to see how competitive we are in foreign markets and help us understand how we can compete in the market of engineering services with new competitors from China, India and other countries. Overall, they help us to understand our place in the market and identify our strong and weak points as an engineering company,” Yushin says.

Although perhaps a little too soon right now, Russia’s new generation of EPC companies may want to leverage their expansive domestic experience, as well as their international partnerships to start operating internationally.

Investment in electrifying Russia

In a heavily industrialized economy that is likely to continue growing annually at 3-4 per cent, under-investment in electrification can be a serious headache. For the period 1990-99, when Russia was experiencing negative economic growth, investments in its power grid were not needed and, therefore, not made.

With soaring GDP growth up to 10 per cent during the following decade however, Russia was soon required to reassess the liabilities of its grids. During the reorganization of Russia’s power industry in the early 2000s, the Federal Grid Company (FGC) was established. The majority state-owned entity operates and manages the country’s unified power transmission grid system, including high-voltage transmission lines.

Oleg Budargin   “Today, wear and tear of our equipment is 50 per cent, which in fact, compared to the rest of the world, could be worse. However, in the past few years, many emergency backup power facilities and transmission lines have been built in other countries. Unfortunately, we still do not have sufficient backup facilities in Russia. Therefore, a major task for Federal Grid’s team is to increase the share of investments into modernization from the current 35 per cent to 50 per cent. This will enable us to renew almost 3000 km of transmission lines and approximately 20 high-voltage substations per year,” explains Oleg Budargin, chairman of FGC.
Oleg Budargin, chairman, Federal Grid Company

“Currently, Russia’s energy sector faces three critical tasks: establishing fair tariffs, enabling access to grid infrastructure, and ensuring that the development of a national grid infrastructure outpaces economic growth as a whole,” hints Budargin. To this end, the Ministry of Energy has approved the FGC’s 2013-17 investment programme, totaling around R775.5 billion ($24.6 billion).

In spite of Russia’s clear-cut investment programme for the FGC, its policy makers face a number of challenges. Today, the transmission and distribution infrastructure from generation facilities to the end consumer is still divided into three parts: the high-voltage grid managed by the FGC, the low-voltage distribution grids grouped under IDGC Holding, and the city grids. The lack of coordination between the management policies of these three entities results in an array of problems.

“Currently, there are almost 100 distribution network companies and approximately 6000 city grids in Russia, and they are not required to adhere to the same technological standards. We could have prevented many of today’s problems, if unified standards for the electric grid system had been established from the beginning,” Budargin protests.

In response, a decree for the creation of a new unified company was signed by President Putin on 22 November, 2012. The new joint-stock company, which will be known as ‘Russian Grids’ from 30 June this year, will unite Russia’s high and low-voltage networks.

High volumes of high voltage

In a country as large as Russia, with around 125,000 km of transmission lines and more than 850 high-voltage substations from FGC alone, many successful present-day equipment manufacturers see their Soviet experience – when the grid was initially constructed – as an important part of their history.

Take the electrical equipment manufacturer ZETO, for instance. The company mainly works in the area of high-voltage equipment up to 750 kV. A main supplier to FGC today, ZETO can look back at an extensive track record of projects from the Soviet period.

Alexander Kozlovsky   “We build on, and keep, our Soviet heritage as it shows the experience we have in the energy market. This experience is testament to the capability we have in bringing together construction services and science, a knowledge base that is not always easy to find today. We combine our experience and look at improving our approach, upgrading our production and modernizing our company. We cannot forget our past. Many companies of the Soviet era, which were given countless opportunities to develop, continue to exist today,” recalls Alexander Kozlovsky, general director of ZETO.
Alexander Kozlovsky, general director, ZETO

“We have taken part in the electrification of our country as well as other nations in Asia, Africa and Latin America, in countries like Cuba. The products that have been supplied to those countries and facilities are still in place, which proves that they are of high quality,” boasts Kozlovsky.

Regardless of any political affiliations, the world should not forget what these companies were able to achieve 50-60 years ago. They have played an active role in engineering one of the largest power grids in the world and now form an important asset within the current modernization process.

A new nuclear race

When the former US secretary of state Hillary Rodham Clinton visited Prague in December 2012, her words found a ready audience in the Kremlin. “We are encouraging the Czech Republic to diversify its energy sources and suppliers,” Clinton said in an attempt to make the Czech Republic wean itself off its dependency on Russia for fuel. Ever since the government of the Czech Republic said it would ramp up nuclear power generation to reduce its dependency on coal plants and imported natural gas, the country has become a geopolitical battlefield for rival nuclear consortia backed by both Washington D.C. and Moscow.

While the Czechs will not be in a position to announce the winner of the $10 billion contract to build two new reactors at its Temelin nuclear power plant until September, Russia’s nuclear state corporation Rosatom is out to win.

In 2011, the company nearly doubled its overseas construction orders to 21 despite the weak global economy and the Fukushima Daiichi nuclear meltdown in Japan. At the start of this year, the company already had an order book to build more than 30 blocks in Russia and abroad.

Kirill Komarov   “Today, Rosatom is one of the biggest global players in this sector,” says Kirill Komarov, deputy general director, global business development. In addition to a healthy pipeline of NPPs [nuclear power plants] coming on stream, Komarov points out that Russia is more than a leader in NPP construction alone.
Kirill Komarov, deputy general director, Global Business Development, Rosatom

“We are already the number one in the world in terms of uranium enrichment, with a global share of around 41 per cent. In terms of uranium reserves, we moved from seventh to second place in just a few years, thanks to our global presence and several assets around the world. As for nuclear fuel, we are currently number three in the world, owning 20 per cent of the world share,” he elaborates.

For Rosatom to sustain its global leadership, it will need to keep research and development, e.g. by developing fast reactors, at the top of its agenda. Despite being a dominant supplier of raw materials, such as oil, gas and metals, to the world markets, Russia has failed to profile itself as a country that exports in large quantities high-tech competitive products internationally. However, when Prime Minister Dmitry Medvedev held a meeting at Rosatom’s NPP in Voronezh, 515 km south of Moscow, he declared the international promotion of nuclear technologies as a strategic goal for the country.

Rosatom’s Komarov agrees, saying “We definitely believe that nuclear energy can be the sector for Russia to not only export raw materials but also new modern technologies.”

Private partnerships in nuclear

While the nuclear industry will continue to be driven by geopolitical interests globally, the Russians have taken on an increasingly cooperative stance with their international counterparts. Based in Moscow, KomplektEnergo is one of the private companies that has been supplying and servicing nuclear equipment and spare parts to Rosenergoatom since 2002, two years after a change in Russian laws allowed increased participation of private companies in nuclear.

Of the ten NPPs in Russia -which Rosenergoatom operates on behalf of Rosatom – KomplektEnergo now provides equipment or services to eight of them together with its partners.

Olga Dolgova   “The competitive environment is changing quite significantly,” says Olga Dolgova, director general of KomplektEnergo. “Now we can see that the European producers – which in the past did not seek to get into the Russian market – study the needs of Russian customers and make them quite competitive offers. This competition has made the Russian market one of the most advanced in terms of Western technology,” adds Dolgova.
Olga Dolgova, general director, KomplektEnergo

Private companies such as KomplektEnergo function as a gateway to Russia’s nuclear market for many of the leading European manufacturers. “As for our competitive advantages, over the last ten years we have had the opportunity to represent Ukrainian, Czech and German producers in the Russian market,” says Dolgova.

In particular, KomplektEnergo has established a number of long-term partnerships with companies such as Ukraine’s Turboatom, the Czech company Vitkovice Power Engineering and Germany’s Taprogge. These businesses are strategic partners of KomplektEnergo today.

KomplektEnergo is also a participant in one of Rosatom’s most promising and innovative projects. In 2013, KomplektEnergo entered into an agreement with the joint public-private enterprise AKME-engineering to develop, manufacture and supply the steam turbine and additional equipment for a pilot plant incorporating their SVBR-100 reactor, a lead-bismuth eutectic cooled fast reactor.

“The project is being implemented within the framework of the federal target programme New Generation Nuclear Power Technologies for 2010-2015 and Future Trends up to 2020, and is one of the projects of the Presidential Commission for the modernization and technological development of Russia’s economy within the framework of the New technological platform: closed nuclear fuel cycle and fast-neutron reactors, says Dolgova.

“The project is very attractive in a number of different ways, from the cooperation with a fully-fledged government-private company, to the economic perspectives of the project and market demand for the small modular reactors under construction, ending with the large-scale manufacturing of SVBR-100 reactors,” Dolgova concludes.

Head above water

Home to the world’s largest natural gas reserves, the second largest coal reserves and the eighth largest oil reserves, renewable energy never really stood a chance to develop in Russia. And despite the government’s recent ambitions to develop their share in the energy mix, solar and wind power have barely gained more than 1.5 per cent to date.

KomplektEnergo collaborates with Turboatom<br>Credit: KomplektEnergo
KomplektEnergo collaborates with Turboatom
Credit: KomplektEnergo

As a highly industrialized BRIC nation, Russia now sees itself forced to take steps against the increasing competitive pressure from heavy industries in neighbouring China. As one of its many countermeasures, the Kremlin has sent RusHydro to support industrial development in Siberia and the country’s Far East region.

“When the government decided to provide us with the assets of RAO-UES of Far East, around 9000 MW of installed capacity, several networks in that region were also added. We are currently working on the synchronization of our investment programmes with the construction of comprehensive infrastructure in Siberia and the Far East. We now have expansive investment projects focused the modernization of the energy sector and the construction of new facilities in that region,” says RusHydro chairman Evgeny Dod.

Looking at the bigger picture, Russia is now focusing on tying up with several governments to replicate the capabilities of its national hydro champion in other parts of the world.

“For certain regions such as northern Canada, Brazil’s Amazon region, Central and Western China, low-cost energy through hydropower can certainly be the engine of industrial development,” explains Dod. Potential investors will also find it hard to ignore the fact that with 35.2 GW of capacity RusHydro has already grown into the world’s second-largest hydropower player, based on its Russian assets alone.

Starting small in a big country

Mikhail Shapiro   Cheap energy has kept many Russian manufacturers puzzled about what incentive there is to invest in energy efficiency. There is, however, a second reason behind Russia’s very low efficiency score. “Another element was the fact that Russia had numerous state companies, which were driven by different targets and objectives. Back then, profitability was not the main driver and competition levels were different than today,” explains Mikhail Shapiro, general manager of Danfoss in Russia.
Mikhail Shapiro, general manager, Danfoss Russia

Although its head office sits in Denmark, Danfoss has already invested more than $64 million in its Russian manufacturing sites to supply the country’s industrial facilities with energy-saving heating, refrigeration and frequency converters.

“Now that many of these companies have been privatized and they actively need to compete with new entrants in the market, price levels have dropped and a focus on profitability has gained increasing momentum,” Shapiro adds.

“Russia hosts large volumes of industrial activities of various types. From a certain perspective, these can all be considered gold mines because of their required modernization. We currently see a situation where the market dictates the price pressure. Ongoing privatization has been forcing industry to look at how it could reduce cost and how save energy,” he says.

In some cases, such as frequency converters, only limited investments are required to achieve an ROI of less than two years. “It really is the most effective way for a commercial enterprise to reduce cost and increase competiveness in quality” Shapiro adds

Mealomania, But the good kind

The Roza Khutor substation built for the 2014 Winter Olympics in Sochi<br>Credit: FGC
The Roza Khutor substation built for the 2014 Winter Olympics in Sochi
Credit: FGC

During Russia’s rapid recovery from the financial crisis in 2009, policy makers successfully attracted a number of bids for international mega-events, resulting in a boom in construction activity. Now, the country is ramping up its infrastructure to host the 2013 Summer Universiade, the 2014 Winter Olympics and the 2018 FIFA World Cup.

The Kremlin is well aware of the international exposure that will be generated by the 2014 Winter Olympics in Sochi, which are expected to be the most expensive Games ever at $50 billion.

For the power engineering industry, these projects could become an opportunity to demonstrate their capabilities to modernize Russia’s power infrastructure.

High-Profile DOMESTIC Hydropower projects

Russia hosts four of the 12 largest hydroelectric dams in the world, but two projects drew particular attention in recent years. Sayano-Sushenskaya was the first. The sixth biggest in the world, this hydropower plant hit the news headlines worldwide when a devastating accident in 2009 killed 75 people. Its fast-paced reconstruction, however, became a national priority. RusHydro, its operator, is seeking a completion date of 2014 for what is seen as a flagship project.

Sayano-Shushenskaya, Russia's largest hydroplant, and at 6.4 GW is one of the world's biggest<br>Credit: RusHydro
Sayano-Shushenskaya, Russia’s largest hydroplant, and at 6.4 GW is one of the world’s biggest
Credit: RusHydro

The second major project, Boguchanskaya, grew into what many thought would become a never-ending story. After decades of delays, Rushydro and its partners are now finally bringing the 3000 MW plant – half the capacity of Sayano-Sushenskaya – into operation.

A partner to Rushydro and active participant in the project is the St Petersburg-based Rakurs. Over the years, Rakurs has grown from a company designing software for hydro generator control systems into a turnkey automation provider for both hydro and thermal plants.

It is one of many companies that saw the dissolution of the Soviet Union as an opportunity to develop untapped industrial niches.

alt   Today, Rakurs works with a number of technology leaders, including Siemens, Schneider Electric, GE’s Bently Nevada, Metso Automation and Swiss company Brüel & Kjær. However, of the 500 projects the company has successfully completed Leonid Chernigov, Rakurs’ general manager, identifies Boguchanskaya as the most prominent.
Leonid Chernigov, general manager, Rakurs

“Boguchanskaya is a plant that started construction in Soviet times,” Chernigov recalls. Indeed, during the initial preparatory works in 1974, few would have expected Boguchanskaya to take this long to finish. At the same time, it would have been unthinkable to imagine the plant as one of the most hi-tech projects in RusHydro’s portfolio 40 years later.

“It is one of our most advanced projects as we integrated all subsystems linked to the management of aggregates and auxiliary subsystems,” Chernigov details.

As Russia seeks greater energy efficiency, the drive towards greater automation in its hydropower landscape is set to continue. However, with Sayano-Sushenkaya fresh in the minds of many at least as important is the impact such modernization efforts will have on the overall safety and reliability of these mega-structures. In the next ten to 15 years, RusHydro alone foresees a $10 billion requirement for plant modernization.

Building the next generation

Yuri Sharov   Size matters in Russia, and expectations are big, very big. Inter RAO evolved from an international energy trader into a diversified energy holding which now includes 33.5 GW of generation capacity. In a recent move, the company put Yuri Sharov – a top executive and one of its long-standing board members – in charge of Inter RAO Engineering. According to Sharov, ” the move is a way for the generation company to pursue vertical integration within the law, which forbids generation companies from entering the grid sector. By eyeing the construction of generation facilities instead, Russia’s generation companies are ramping up in size along an entirely new dimension.”
Yuri Sharov, general director, Inter RAO Engineering

Ramping up for the nuclear Renaissance

In Russia in particular, a number of leading equipment suppliers are preparing for a ‘nuclear renaissance’.

Moscow-based Zio-Podolsk, for instance, is one of the largest manufacturers of complex heat exchange equipment for nuclear, thermal and heavy industries. To support its growth ambitions, Zio-Podolsk has embarked on a R6 billion investment programme over the next five years.

Igor Kotov   “We continue to invest significantly in the modernization of our facilities and the acquisition of new equipment. I have not seen any other thermal equipment manufacturer with the same investment programme,” says General Director Igor Kotov. When asked about his first year in charge, Kotov looks back at 2012 as a year in which the company managed to strengthen relationships with its partners.
Igor Kotov, general director, Zio-Podolsk

Although unthinkable in the past, Russian and foreign companies are now looking at various forms of cooperation to jointly develop the traditionally closed sector of nuclear energy in Russia, as well as abroad.

“In addition to the Russian market, we are also looking at other markets outside of Russia’s borders, such as Kazakhstan and Ukraine. Furthermore, we have entered into a licensing agreement with NEM – a leading Dutch engineering company.

“Together we are studying the different markets in which we can cooperate, such as the Middle East or South Africa. We are also operational in India through our collaboration with Ansaldo,” Kotov illustrates.

“Our license agreement with NEM – which produces some of the best boilers in the world – is very competitive. Of course, these products are not fully Russian but we understand the technology and have successfully deployed it at several plants in Moscow for instance,” he concludes.

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