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. Last Updated: 07/27/2016

Grid Firm to Vote on Share Float

The Federal Grid Company, a unit of Russia's national utility, will vote this week to pool the country's electricity transmission operators into a single holding company that may list its shares for trading this year.

If the plan is approved, MMSK Center appropriate 54 transmission companies and six interregional grid companies, according to Federal Grid documents. State-controlled Unified Energy Systems owns most of the country's high-voltage power lines through those 60 units, either directly or through Federal Grid.

"It could be a sure-fire cash cow, especially attractive for portfolio investors," said Alexander Kornilov, an analyst with Alfa Bank. "It's like a second Transneft," he said, referring to the country's crude-oil pipeline monopoly.

As the state plans to exit the thermal generation services and retail segments of the power industry by the middle of next year, it is asserting majority control over transmission. By law, the state must own at least 50 percent plus one share of Federal Grid, and it plans to increase this stake to more than 75 percent this year.

Unified Energy CEO Anatoly Chubais said this week that it would be impossible to meet surging power demand, forecast at 5 percent a year through 2010, without massive, state-supervised investments in power lines. Russia will spend 1.3 trillion rubles ($49.5 billion) upgrading and expanding the grid by 2011.

In all, Federal Grid controls 42 transmission companies and its parent Unified Energy a further 13. The one outstanding transmission company, based in Ulyanovsk, central Russia, will be added to the holding next year, the documents said.