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. Last Updated: 07/27/2016

Nuclear Industry Overhaul Planned

The government plans to restructure the nuclear energy industry into a vertically integrated holding, a move that would simplify management in the sector and attract the cash necessary for its further development, a top official said Monday.

Federal authorities are reviewing the creation of a fully state-controlled umbrella company, under which several major holdings will be formed, embracing all enterprises operating in the nuclear sector, said Victor Opekunov, chairman of the State Duma subcommittee for nuclear energy, part of the Energy, Transport and Communications Committee.

The restructuring of the industry would involve "privatizing" all Russia's nuclear enterprises -- in other words, incorporating them into joint-stock companies -- with the state becoming their only shareholder, Opekunov said.

In spite of nuclear sector companies being state-owned, their management would be allowed to run the business much like a private enterprise, making operational decisions and attracting corporate financing, Opekunov said.

At present, only 15 percent of Russia's energy needs are served by nuclear power. President Vladimir Putin has called for that figure to rise to 25 percent in 15 years, a target that will require the construction of 40 new nuclear reactors and investments to the tune of $60 billion, according to calculations by Sergei Kiriyenko, head of the Federal Atomic Energy Agency.

A working group set up by the atomic agency to draft a strategy on how to restructure the industry and meet these targets has proposed that the new vertically integrated holding, provisionally called Rosatomprom, include three smaller holdings, Vedomosti reported Monday.

The first holding would operate power stations, the second would unite all companies operating in mining and enrichment of uranium, and the third would be in charge of the manufacturing of machinery for the nuclear sector.

Sources close to the Federal Atomic Energy Agency said Monday that state nuclear fuel monopoly TVEL was the most likely candidate to serve as a platform for the new holding.

Opekunov noted, however, that the working group's proposals were far from being rubber-stamped. "What you see are conceptual sketches. A bill for this has not been written yet," he said.

Russia's main nuclear enterprises include Rosatomenergo, which runs all power stations; TVEL; Atomstroiexport, which builds nuclear power stations abroad; and Tekhnabexport, the export arm trading in nuclear machinery and fuel. All are currently supervised by the Federal Atomic Energy Agency.

Most of Russia's nuclear companies are so-called federal state unitary enterprises, which means they are controlled by the state but their capital is not divided into shares.

By becoming joint-stock companies, nuclear firms would gain the possibility to attract strategic investors, borrow cash on the debt market, float shares on the stock market or apply for bank loans.

While some industry insiders said the document for reform would allow the possibility of private investment, including foreign investment in individual projects, the Federal Atomic Energy Agency denied this was the case.

"No one is planning to sell anything," an agency spokesman said.