State Bank May Take Stake in OGK-1

A Russian government bank may buy into electricity generator OGK-1, which urgently needs at least $1 billion to carry on with its investment plans, sources close to the group said Monday.

"There are a few options, either canceling the investment program, holding a technical share issue or having a state bank take a stake in OGK-1," one of the sources said.

He added that the government, which indirectly controls OGK-1, needed to make a decision by the end of November. By then, OGK-1 will be in desperate need of about $1 billion, in part to continue work on a turbine unit it began building in June.

The Development Bank, also known as Vneshekonombank, is being considered for this role, the source said.

OGK-1 is the country's only major generating company that has not found a strategic investor during the sectoral reform of the past three years, in which the former state monopoly successfully sold 19 other large generating firms.