G8 sale offers strategic value

The Polish treasury ministry has announced that it has received four binding offers for a strategic stake in the country’s largest power distributor, the so-called G8 Group.

The 25 per cent stake is regarded as having great strategic value, and will give the winning bidder a strong position in the Polish and east European electricity markets.

The four bidders are Electrabel, E.ON Energie, Iberdrola and a Polish consortium led by Elektrim. The government wants to close the sale by September 2001, and is expected to grant exclusivity in August.

G8 is a group of eight power distribution companies in northern Poland. The 25 per cent stake is expected to provide the winning bidder with a strong competitive advantage over other players in the region’s market. The investor is also likely to be interested in purchasing nearby generators. leading to vertical integration in Poland’s power market.

G8 has a 16.3 per cent market share and 2.5m customers. It is the second Polish distributor to be sold.

Russia reaches compromise on power sector restructuring

Russian prime minister Mikhail Kasyanov has signed a decree approving a wide-ranging restructuring of the country’s electricity sector. The move has brought an end to several months of debate over the plans, although analysts have noted that some minor details still need to be ironed out.

The plan approved by Kasyanov contains a number of changes to the original document submitted in May 2001 because it takes into account the criticisms of certain parties, including UES’ minority shareholders.

The restructuring will introduce competition in the generation and distribution sectors, and will also liberalize prices. The high voltage grid currently operated by state power company UES will be spun-off into a separate subsidiary.

The plan will ensure proportional distribution of shares in future UES generating companies. Minority shareholders had expressed concern that they would be disadvantaged by the reforms.

Sudan orders Hydromatrix

The Sudanese power supply company National Electricity Corporation has placed an order with Austria’s VA Tech Hydro for a ‘Hydromatrix’ power plant for the Jebel Aulia dam on the White Nile. The order is VA Tech’s first for its new hydropower generation technology.

VA Tech will install 40 pairs of turbine generator sets in 40 of the dam’s 50 openings. The first unit is scheduled to enter operation within 16 months, and the entire contract will be complete in 23 months.

Hydromatrix is a new hydropower technology developed by VA Tech that can be installed in existing dam and weir structures. Cost savings are made as little or no civil construction is required.

Project will strengthen Nigeria’s transmission network

The National Electric Power Authority of Nigeria is to install a new high voltage transmission line and several substations to improve the security of bulk power supplies in the south of the country. The utility has retained PB Power as its engineering consultant.

A new 330 kV line will be constructed between the towns of Alaoji and Calabar while a new 330/132 kV substation will be built at Calabar and a 330 kV line bay at Alaoji will be refurbished. The project will be completed in early 2003.

PB Power will work in conjunction with local consultant Jiyoda Engineering to provide project management, tender evaluation, design review, supervision and other services. Much of the engineering work under the $45m contract will be carried out in the UK.

Constanta upgrade

Romania’s electric transmission company Transelectrica has awarded ABB a L19m ($16m) contract to rehabilitate the Constanta Nord substation. The project will enable Romania to be connected to the western European power transmission network.

The project will be the first turnkey project without government guarantees undertaken by a foreign company in the Romanian energy sector. The project will commence in 2002 and will be completed in 2004.

Russia opens to spent fuel

Russia has signed a law allowing the import of spent nuclear fuel for storage. The country will now be able to generate $20bn of revenue over the next ten years through spent fuel imports.

The country also created a commission to monitor the spent fuel imports.

News digest

Bulgaria: An internationally backed fund to support the decommissioning of Bulgaria’s Kozloduy nuclear power station has been formally put into action. The funding from the European Bank for Reconstruction and Development and several EU countries will focus international support on the essential investment projects for the Bulgarian energy sector.

Estonia: NRG Energy will acquire a large stake in Narva Power of Estonia together with Estonian Oil Shale. The company has promised to invest $290m in Narva Power to increase the output of power stations while reducing pollution.

Georgia: The World Bank has given Georgia a $27.4m loan to establish a reliable supply of electricity and improve efficiency in the country. The project will involve rehabilitation and modernization of transmission and dispatch measuring equipment, telecommunications and control systems, and restoring the transmission substation at Zestaponi. It is hoped that these efforts will rule out an energy crisis in winter.

Israel: Alstom Power has been awarded a $13m contract from Israel Electric Corp. to supply equipment to the Reading Power Station in Tel Aviv. The equipment will allow the power station to switch from crude oil to natural gas.

Jordan: General Electric is to build a new unit at the Rihab power station in Jordan. The new unit, which will cost an estimated $34m, is being financed by the Jordanian government to increase the plant’s power capacity to 360 MW. Work on the new unit will start immediately and last 19 months.

Qatar: Qatar Electricity and Water Company (QEWC) is seeking a $160 m loan for the 380 MW extension to its Ras Abu-Fontas B plant. QEWC is looking for a long term loan over 15-18 years to fund the extension work being carried out by Alstom Power. A second-phase expansion of the plant is also planned, involving 123-134m litres per day of desalination and the installation of heat recovery boilers.

Ukraine: A new shelter will be constructed above the destroyed reactor at Chernobyl NNP, costing an estimated J780m ($681m). Three versions of the design are currently under discussion: a framework, an arc and a console. Domestic and foreign firms will be invited to submit tenders on design completion.

Uzbekistan: The Ansol international trading group will loan Uzbekistan $59.3m to complete construction on the first phase of a thermoelectric power station in Kashkadarya. The loan will finance delivery of equipment and completion of construction of the 800 MW unit at the Talimardzhan state district power plant.