Sechin Set to Join Inter RAO Board

MTSechin's nomination to the Inter RAO board helped the company's shares Friday, which beat the overall MICEX Index.
Deputy Prime Minister Igor Sechin is set to join the board of state-controlled electricity trader Inter RAO, boosting his influence over the sector at a company with operations in Finland, Turkey and across the former Soviet Union.

Sechin, the top government official responsible for the energy industry, has been nominated to the board along with Energy Minister Sergei Shmatko and Federal Property Management Agency chief Yury Petrov, the company said in a statement Friday.

An extraordinary shareholders meeting will be held Oct. 23 to reshuffle the board, which was elected in June, the statement said. Inter RAO is controlled by Rosatom, the state nuclear corporation. The state owns 42.49 percent of the company, which listed shares on the MICEX in July.

Last month, Sechin was appointed to head a new government commission to oversee the electricity industry, which needs billions of dollars of investment to increase capacity and upgrade infrastructure. The government is looking to make sure that investors who bought power generators during the breakup of Unified Energy System follow through with the investment programs they took on while buying the assets.

Sechin has also been increasing his stature internationally after keeping a lower profile as a deputy chief of staff to then-President Vladimir Putin. Last month, he led Russia's delegation to a summit of the Organization of the Petroleum Exporting Countries and visited several countries in Latin America.

The government may have chosen Sechin to lead its representatives on the board because Inter RAO has an international business, said Oleg Zotikov, an analyst at brokerage Veles Capital.

"The role of this company in terms of politics is bigger than that of the other companies," he said, referring to RusHydro and the Federal Grid Company, the other two blue chips that emerged after UES ceased to exist in July.

The Federal Grid Company may also re-elect its board to include Sechin, Zotikov said. A call to the company's press service went unanswered Sunday.

Inter RAO shareholders will pick an 11-member board from 20 nominees, the statement said. One current member, Alexander Voloshin, who served as chief of Kremlin staff under President Boris Yeltsin and at the beginning of Vladimir Putin's tenure as president, is prominently not on the list of nominees.

The company's shares rose 0.7 percent Friday, beating the overall market and MICEX's power index, which fell 2.8 percent.

Sechin had a chance to discuss Inter RAO's plans before the news of his nomination. In September, he met with Fulvio Conti, the chief executive of the Italian utility Enel, to talk about possible joint energy projects in third countries.

Searching for more international deals, Inter RAO signed a strategic partnership agreement with Electricite de France last month that stipulates joint investment projects in electricity generation and trade.

Inter RAO has a generating capacity of 8,000 megawatts at stations in Russia, Georgia, Kazakhstan, Tajikistan, Armenia and Moldova. It is planning to increase that capacity to 30,000 megawatts by 2015. The company also trades electricity in Finland and Turkey.