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. Last Updated: 07/27/2016

UES Plans Northwest Tender

Power giant Unified Energy Systems will tender for an international utility company to manage one of its most modern power stations, Northwest CHP, the company said in a statement.

The tender winner will also be charged with securing funds to complete a second 450 megawatt combined-cycle gas turbine and some heat networks, said the statement, issued late Friday.

UES said total investment of $227 million would be needed at the plant, which is already equipped with a generator that supplies the St. Petersburg region and exports power to Finland.

It must also improve efficiency at the plant, preparing it for competition that will be introduced gradually into Russia's power market in the coming years.

UES has been seeking ways to ease foreign investors into the domestic power industry, which is plagued by heavy government tariffs, investment regulations and outdated equipment.

UES, which controls the national grid and 70 percent of power generation, will privatize its power plants in the years ahead and the government will liberalize the market, mirroring deregulation in Europe in a bid to bring the post-Soviet economy closer to the West.

Italy's ENEL has been mentioned in the Russian media as one possible bidder. Foreign firms must bid either through Russian subsidiaries or in joint ventures with Russian firms in which they hold no less than 50 percent.

Northwest combined heat and power plant is now 47 percent owned by UES, with another 14 percent owned by Lenenergo, the UES subsidiary that serves St. Petersburg and the surrounding region.

The plant's other founding shareholders include a Gazprom unit and state property agencies.