A week after the memorable meeting at which Prime Minister Vladimir Putin gave a dressing-down to the power industry for failing to implement investment programmes, TGK-11 announced that it was cutting investments by more than three times. The company will concentrate on modernisation and abandon plans to build new facilities.
Vladimir Putin's tough remarks at a meeting with power industry officials on February 24 met with a mixed reaction from companies in the field. Some chose to ignore the prime minister's claims, while some tried to justify themselves by citing objective problems and asserting that he had been misinformed. The Sintez Group (which controls TGK-2) promised to increase its newly introduced capacity upgrade from 970 to 1570 megawatts on that same day.
The first company that openly ignored the demands of the prime minister was TGK-11. It revised the investment target from 26.6 billion roubles to 6-7 billion roubles until 2016, the top manager of Inter RAO said at a meeting with analysts yesterday. Investments in 2010 will amount to 2.16 billion roubles, said Sergey Tolstoguzov, a member of the company's board. "We have some money, but it is not unlimited," he said, and if necessary, TGK-11 could end up having to borrow. The company is already 3 billion roubles in the red and is due to repay 1 billion this year.
A cut in investments should not seriously affect the growth of TGK-11 capacity by 2015 (466 megawatts against the previously projected 495). The company will rather revise its priorities: instead of building new power units, it will concentrate on modernising existing stations. The changes have already been confirmed by the Systemic Operator and the Energy Ministry.
The only new project that may be included in the new energy contract is a 285 megawatt unit at the Omsk Thermal Electric Power Plant TETS-6, a project that the region's governor Leonid Polezhayev insists should continue. But it will be written into the contract as an additional item and its implementation will begin after 2014 only if funding is available, Inter RAO executives explain. Perhaps money could be raised by creating a joint venture with the regional authorities or through an additional issue of TGK-11 shares.
Preserving the rate of capacity growth despite investment cuts is exactly in line with the government's thinking: modernisation makes the existing units more effective, which may even be better than building new units, says Sergey Pikin, director of the Energy Development Fund. Slashing TGK-11's investment programme also makes sense. According to Alexander Kornilov, an Alfa-Bank analyst, the company is one of the few that did not raise money from new emissions.
In the meantime, Inter RAO may have to go for broke to consolidate TGK-11 shares.
After cobbling together a package of 32.7%, the generating company submitted its documents to the Federal Financial Markets Service on March 1 in a mandatory offer to other company shareholders. The price of the buy-out has not been announced, but judging from the average price of shares in the last six months, it will be 1.7 kopecks, which is 25% less than the current market evaluation, Kornilov says. In December, persons affiliated with Inter RAO received an additional 16% stake belonging to the TGK-11 holding. Meanwhile, speculation and talks continue around the 6.77% of TGK-11 shares owned by Rosneft (with a possible buy-out) and the 27.45% owned by the Federal Network Company.
Sergei Ispolatov