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. Last Updated: 07/27/2016

Mosenergo Chief Seeks $500M in Investments

Itar-TassAnatoly Kopsov
Mosenergo plans to invest $500 million into its aging infrastructure to avoid a repeat of the May blackout, the new chief of Moscow's main utility company said Thursday.

"According to our sober estimates, we will need an investment of $500 million in the next three to four years for our technological overhaul," Anatoly Kopsov said at a news conference.

He said that Mosenergo was in talks with Gazprombank and the European Bank for Reconstruction and Development for each to provide up to $250 million in loans.

Gazprombank holds 30 percent of Mosenergo after it went on a share-shopping spree last year.

Kopsov, who has worked in the electricity sector all his life, was appointed to head Mosenergo in June. He replaced general director Arkady Yevstafyev, who resigned amid criticism over the May power outage, which afflicted Moscow and surrounding regions.

Mosenergo and its parent company, Unified Energy Systems, have said they would significantly increase investment into energy system maintenance and upgrade. Mosenergo's investment budget this year will be increased from an initial 8 billion rubles ($285 million) to 10 billion rubles ($350 million), Kopsov said.

The $500 million loan would go toward a key part of Mosenergo's technological overhaul -- the shift from steam generators to more efficient gas turbines, he said.

"We are indeed in preliminary negotiations. If we can reach a definitive agreement, we hope to be able to sign this deal this year," said EBRD spokesman Richard Wallis.

Kopsov said Mosnergo also expected to reach an agreement with Gazprombank by the end of this year to put up to $250 million in loans and investment for the refurbishment of equipment.

Moscow is short 1.5 million kilowatts, Kopsov said. New investments will allow Mosenergo to add up to 500 megawatts of capacity per year starting in 2008. That investment will carry a price tag of $350 million, he said.

Financing an expansion would eventually also benefit Gazprombank's parent company, Gazprom, the main supplier of gas to the utility.

"This is not a bad option for either Mosenergo or Gazprom," said Andrei Zubkov, vice president of Trust investment bank. "Gazprombank can invest either into particular stations or into Mosenergo, where it already has 30 percent and would like to get a controlling stake."

Yulia Martina, a spokeswoman for Gazprombank, said it was too early to talk about the loan issue to Mosenergo.

 Dmitry Zhurba said he was resigning as financial director of Unified Energy Systems, the third top manager to leave UES over the past 12 months, Interfax reported Thursday.

Zhurba, who has been at UES for five years, said during a conference call that he did not feel he could be of use to the company any longer, the news agency reported. A year ago Leonid Melamed left as first deputy chairman of UES, and this spring board member Mikhail Abyzov also resigned.