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Inter RAO Signs 25 Year Electricity Deal With China

© RIA NovostiRussia's state-controlled power trader Inter RAO UES signed a 25-year contract to supply 100 billion kW/h of electricity to China
Russia's state-controlled power trader Inter RAO UES signed a 25-year contract to supply 100 billion kW/h of electricity to China - Sputnik International
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Russia's state-controlled power trader Inter RAO UES signed a 25-year contract to supply 100 billion kW/h of electricity to China, the company said on Wednesday without disclosing the amount of the contract.

Russia's state-controlled power trader Inter RAO UES signed a 25-year contract to supply 100 billion kW/h of electricity to China, the company said on Wednesday, in a deal analysts said could be worth billions of dollars.

Inter RAO has not disclosed the value of the deal, but VTB Capital analyst Mikhail Rasstrigin thinks it may earn up to $7.5 billion from the contract, told RIA Novosti on Thursday.

"I estimate the deal at $7.5 billion or $300 million per year," he said. "The deal is profitable for Inter RAO anyway because the company acts as an intermediary. Any long-term electricity export deal made by Inter RAO is profitable [in this case]," Rasstrigin said.

Investcafe analyst Vyacheslav Novozhilov also considers the deal is profitable for Inter RAO as company's electricity prices for China are 20 percent higher than in Russia.

Inter RAO plans to export over 2.6 billion kW/h of Russian electricity to China in 2012, up from 1.2-billion kW/h last year, the power trader said in a statement. Electricity supplies to China will start from March 1.

The power will be delivered by transmission lines with 110 and 220 kV voltages. A new Amur-Heihe 500 kV transmission line has been built to facilitate larger exports.

 

 

 

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