Russia seeks foreign investment for two gencos

Russia’s state-owned power utility, Unified Energy Systems (UES) is looking for foreign utilities to take charge of two generating companies that it will spin off by 2006.

Four or five foreign utilities look set to submit bids, including RWE and Electricité de France. The incentive for the companies would be to get a first hand experience of trading in Russia through low-risk management contracts.

UES has already drafted plans to restructure the country’s power system by creating ten competing federal generators. However, a second reading of a package of bills that would pave the way for restructuring was delayed in November. The second reading is now scheduled to take place in mid-December, although some observers believe that the bill is unlikely to be passed ahead of parliamentary elections in 2003.

Each generator would have a capacity of 6000-10 000 MW supplying power to regions across Russia, and would be a key part of the reformed market.

Hungary taps KWI, Accenture

Hungary’s state-owned electricity generator, MVM, has selected KWI and Accenture to provide an energy trading and risk management platform to support the opening of the country’s electricity market.

Hungary is opening its electricity market in order to comply with laws that will give it accession to the European Union by 2004. MVM says that KWI’s technology will help the company to prepare for and become more accustomed to the new market.

Second power plant slated for Fujairah

Fujairah, in the United Arab Emirates is to be the location for a new $1bn, 800-1000 MW and 455m l/day desalination plant under plans revealed by the Union Water and Electricity Company. The plant will be built near the 656 MW, 455m l/day water and desalination unit already under development in Qidfa.

The Union Water and Electricity Company is seeking both consulting and prequalifying construction companies to undertake the engineering, procurement and construction contracts for the planned project. The contracts will issued by mid-2003.

A foreign partner will be offered a 49 per cent stake in the project, a deal that mirrors the Abu Dhabi Water and Electricity Authority’s (Adwea) Taweelah A2 and Shuweihat independent water and power projects in the UAE.

Moldova power privatization grinds to a halt

Modolva’s sale of three electricity distribution companies to Spain’s Union Fenosa is in jeopardy after the country’s Supreme Court highlighted legal discrepancies in the deal.

The Supreme Court cited contract irregularities, but it has been suggested that this decision is just a smokescreen that will allow the government to cancel the sale. The deal was signed in February 2000 by the previous administration, and required Union Fenosa to pay $25m for the assets and to invest $67m over five years.

The courts have ordered the annullment of the contracts to start, a move which is likely to be contested by the Spanish group. It is not clear whether Union Fenosa will receive compensation.

Opposition parties are accusing the government of chasing out foreign investors to replace them with business partners of the current government. One allegation is that the Communist government, which has followed a pro-Moscow line since it came to power last year, intends to sell the three electricity companies in question – RED Centru, RED Sud and RED Chisinau – to Russian investors. The accusation was dismissed by Russia.

Russia to build world’s first floating nuclear power plant

Russia looks set to be the first country to implement a floating nuclear power plant. The Atomic Energy Minister Aleksander Rumyantsev has signed the approval for the new plant, which will be operational by 2008.

The northern region of Arkhangelsk will build a ship that will carry the 70 MW unit, which will supply Severodvinsk, a city of 250 000 inhabitants. The cost of the plant is estimated to be around $100-200m and it will take 4-5 years to construct.

The plant will be located offshore, but can be moved to other locations as demand dictates. The Atomic Energy Ministry drafted the project jointly with the Russian Shipbuilding Agency as well as other organizations, including Rosenergoatom. It says that China has expressed an interest in the technology.

The Atomic Energy Ministry believes that plants of this design could supply several regions in Russia, including Sakhalin and Kamchatka.

News digest

Bulgaria: More than 60 companies have expressed in writing their interest in the privatization of the seven Bulgarian electricity distribution utilities. BNP Paribas was appointed in September as a consultant for the sale, which is still in its initial stages of preparation.

Iran: Tender documents for setting up two gas fuelled power plants (Zanjan I and Zanjan II) in Zanjan province, with a combined capacity of 1 GW, will be made available this month said Bahman Masoodi, deputy head of the power generation and distribution organization.

Nigeria: Nigeria will unbundle its state-run National Electric Power Authority next year and double generation capacity within three years ahead of privatization, says President Olusegun Obasanjo. The country also plans to have 10 000 MW of generation capacity by 2005, compared with its present 4500 MW.

Poland: Poland’s treasury ministry has received three bids for a stake in Elektrownia Kozienice power generator despite the air of pessimism surrounding the sale. The three bidders are thought to be RWE Plus, Electricité de France and Electrabel.

Romania: The World Bank and Romania signed the Grant Agreement for the Energy Efficiency Project. The agreement was signed by the Chief of the World Bank Office in Romania, Ziad Alahdad and Romulus Moucha of the Romanian Energy Efficiency Fund. The objective is to foster a large increase in energy efficiency investment in Romania through the development of self sustaining, market based mechanisms.

Russia: Lenenergo’s Andrei Likhachev, CEO, said that the company is scheduled to receive a $40m loan from the European Bank for Reconstruction and Development. The loan will be issued for seven years, with a two year grace period. The loan will be guaranteed by E.ON Energie, which holds a 9.3 per cent stake in Lenenergo.

Tajikistan: Tajikistan and Russia signed a $1m contract to complete the construction of central Asia’s largest hydropower station. The landmark deal, between Tajikistan power company Barq-i Tojik and Russia’s Baltiiskaya Stroitrlnaya Kompaniya, has been hailed as a major step forward for the poverty-stricken central Asian republic.

Turkey: Voith-Siemens is in line for a contract valued at g17.7m for the supply of electromechanical equipment to the Akkopru hydroelectric dam project. The contract would call for the supply of two 59.3 MW Francis-type hydraulic turbines.

UAE: Work is underway to establish a 33 kV power line to link Khasab power plant with Al Ghalilah power plant, according to Oman’s Minister of Housing, Electricity and Water.