02:25 GMT +310 December 2018
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    Fortum, ENEL, E.ON mull investment in Russian power assets

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    ST. PETERSBURG, May 19 (RIA Novosti) - Finland's Fortum, Italy's ENEL and Germany's E.ON head the list of energy companies interested in buying Russian generating assets, the head of Russian electricity monopoly Unified Energy System said Friday.

    In addition to the three main potential investors, France's EDF and U.S. company AES have also expressed an interest, Anatoly Chubais said.

    "The list of strategic investors who are showing the strongest interest in generating assets has been drawn up fairly clearly," he said.

    Chubais said all interested companies would be able to take part in auctions to buy any of the generating companies.

    "We intend to operate in a very competitive environment," he said.

    Russia's power sector has undergone radical changes in recent years aimed at increasing the efficiency of power plants and developing the industry by attracting investment. During the restructuring process, specialized structures have been created in place of the old vertically integrated companies.

    By the end of the reforms, potentially competitive parts of the industry - generation, sales and repair companies - will become mainly private and enter into mutual competition. However, natural monopoly functions - power transmission and dispatching - will remain state-controlled.

    Generating assets have been consolidated into interregional companies of two types: wholesale generation companies (WGCs), of which there are seven, and territorial generation companies (TGCs), numbering 14.

    WGCs consist of power plants specializing in electric power generation, and are based in several diverse regions to prevent monopolies forming. TGCs contain predominantly combined heat and power plants, in neighboring districts.

    Chubais said a list of nine generating companies that could hold IPOs in the near future has been drawn up.

    "These nine companies are working with all investors - Russian and foreign, portfolio and strategic," he said.

    In June, between two and four of these nine companies will be selected to hold IPOs, Chubais said.

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