Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Chubais Says UES Needs $5 Billion

BOSTON — National power grid Unified Energy Systems needs foreign investment "on a grand scale" to modernize its inefficient technology, the company’s chief executive, Anatoly Chubais, said Saturday.

Chubais said the company needs to invest more than $5 billion to update its increasingly obsolete technology or else face a serious drop in energy production capacity in a few years.

"2005 will be a critical juncture — unless the trend changes, we will find ourselves in a situation where Russia will have to become an energy importer," Chubais told the U.S.-Russian Investment Symposium in Boston.

"We declare that what we need is Western investment in our company on a grand scale," he added.

UES is one of the largest and most influential companies in the nation, controlling almost all of the regional power utilities, and is key to any plan to reform the economy.

UES has been embroiled in a conflict for months with minority shareholders who fear plans to spin off generating units would amount to assets being sold on the cheap.

Chubais, speaking by videolink from Moscow, praised the stable political scene in Russia, adding that the government under President Vladimir Putin has done a great deal to reform the economy in a very short period.

On Sunday, Chubais said UES aims to increase electricity exports to energy-hungry European Union countries.

The European Commission recommended last week that the EU should strive for closer cooperation with Russia on energy matters, particularly on rehabilitating oil and gas production and transport facilities.

Chubais told a news conference that electricity should also be part of the East-West "energy bridge."

He said the EU proposal, which followed last month’s protests in Western Europe over high fuel prices, was a good one but would require billions of dollars of investment in the Russian fuel and energy sector.

Chubais also called on the West to stop regarding Russia merely as a source of raw materials. "Besides oil and gas there is electricity, a product of high technology processing, much more advanced in terms of value added," he said.

"We have proven this. We have penetrated the Western European market with our goods, our electricity," he added.

He was referring to a series of contracts signed earlier this year under which UES can export electricity to Germany through Belarus and Poland.

"Russia started exporting electricity to western Germany starting in August," he said. "We understand this is not the full extent of the energy bridge, and we are ready to move further."

Chubais spoke after a meeting of more than 200 industrialists from EU countries and Russia on cooperation in energy and other sectors.

EU Commissioner Erkki Liikanen told the news conference in Moscow that energy cooperation would benefit both sides and would be a key issue on the agenda of an EU-Russia summit in Paris at the end of the month.

"Russia, to be able to increase production and productivity, needs investment and the EU wants to diversify its base of oil, electricity and gas supplies," he said.