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

. Last Updated: 07/27/2016

First Private Power Plant Is Approved

The government cleared the way for construction to begin on the country's only privately funded power plant, as Russia seeks to double electricity generation and avoid shortages that could slow the country's economic growth.

"This is a milestone'' for the state effort to reorganize the power sector, Industry and Energy Minister Viktor Khristenko said Tuesday during a ceremony at the site of the plant near the town of Noyabrsk, in the oil-rich region of Tyumen. The project will cost about $150 million, Khristenko said.

Intertekelektro, a private utility investor, is building the 124-megawatt station to power the nearby operations of Gazprom Neft, the oil unit of Gazprom. The plant will burn natural gas pumped by Gazprom Neft.

"We'll monitor the progress of this project very closely," Khristenko said.

Tyumen's electricity demand is the third-fastest growing in Russia, after that of Moscow and St. Petersburg, the country's two biggest cities, the minister said.

The Tyumen plant will be 30 percent company-funded and 70 percent financed by loans arranged by BNP Paribas, said Artyom Bikov, chairman of Intertekelektro, at Tuesday's ceremony.

E.On, the German power utility, is providing technical advice on the project and General Electric is supplying the turbines. Gazprom Neft will supply gas extracted during its oil production, or so-called associated gas, to the plant. The station is scheduled to begin producing electricity late next year and is the first of six Intertekelektro plans to be built in oil- and coal-producing regions in Siberia.