Federal Grid May Invest $5Bln This Year

The Federal Grid Company may invest 160 billion rubles ($4.9 billion) to 180 billion rubles this year as the long-haul power distribution monopoly seeks to cut spending, CEO Andrei Rappoport said.

The company will present its investment plans to the government next month, Rappoport said Friday.

The company is reducing its four-year spending program by 25 percent, which would affect construction in regions such as Tyumen, he said.

The power distributor said in November that it planned to sell 146.5 billion new shares this month to build new electricity lines and transmission plants. The sale, which was due to be open to the public, may now be reduced in size as the government readjusts spending to lower oil prices, Sergei Arinin, an analyst with JPMorgan & Chase, said in a report Friday.

He expects Federal Grid to increase reliance on bank loans, a more expensive source of funding.