OAO Unified Energy System, the world's biggest utility by installed capacity, plans to raise ``much more'' than $20 billion selling assets this year as investor demand drives prices higher than the company had expected, Chief Executive Officer Anatoly Chubais said.
``It looks like I made a mistake, it looks like I made a serious mistake, because I'll get much more than $20 billion,'' Chubais, 51, said today at the St. Petersburg International Economic Forum. The Moscow-based company had projected in January it would earn about $15 billion from asset sales this year.
Domestic and foreign investors are battling for companies that within three years will be free to charge industrial customers a market rate, President Vladimir Putin said today, also at the St. Petersburg event. The government forecasts electricity demand will grow as much as 5 percent a year.
Russia will complete selling off Unified Energy assets by July 2008 as the government seeks to spur investment in the country's aging power network. The state plans to sell stakes in units engaged in thermal generation, power retail and services and as much as a quarter of the transmission business.
The nation's power network needs another 40.9 gigawatts of capacity, about twice that installed in California, before 2010, according to Unified Energy. The utility started last year to sell off units to help fund the $120 billion it says is needed for upgrades and expansion.
E.ON, Rusal, Fortum
Shares of Unified Energy advanced 0.30 rubles, or 0.9 percent, to 33.72 rubles in Moscow today, valuing the company at 1.38 trillion rubles. Unified's shares have gained 19 percent this year.
Finland's Fortum Oyj, Germany's E.ON AG, and Russia's United Co. Rusal will be among the competitors for the next sale, which is of wholesale generator OAO OGK-4, Chubais said today. OAO Surgutneftegaz, a Russian oil company that supplies gas to the generator's Surgut plant in Siberia, will also bid, Interfax has reported.
OGK-4 plans to sell 32 percent of its equity, which will part-fund the generator's 76 billion-ruble ($2.9 billion) investments over the next five years. The company plans to overhaul plants and add 2,400 megawatts of capacity, equivalent to two large nuclear reactors.
Price per Kilowatt Hour
OGK-4 operates power plants with 8,600 megawatts of capacity near Moscow, in the oil-rich Tyumen region, in the Urals Mountains and in the eastern Siberian Krasnoyarsk region.
Unified Energy probably will raise as much as 700 billion rubles from planned sales of stakes in 20 thermal generation units before July next year, Chubais said May 20. The estimate was made before the latest sale of 25 percent in power generator OAO OGK-5 to Italy's Enel SpA for $1.5 billion.
``Six months ago, a Russian power asset was going for $300 per kilowatt hour, a month ago -- $600,'' Chubais said. The OGK-5 share sale valued the company at $700 a kilowatt hour of electricity versus about $2,000 for European utilities.
``You see how it goes,'' Chubais said, adding that he believes the value of Russian power assets will approach those in Europe ``sooner rather than later.''
Source : quote.bloomberg.com
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