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. Last Updated: 07/27/2016

UES Signs Krasnodar Power Deal

SOCHI -- Electricity monopoly Unified Energy Systems on Saturday signed an 83.6 billion ruble ($3.2 billion) deal to expand the energy network in the southern region of Krasnodar over the next five years.

The agreement with the administration of Krasnodar region, where the Black Sea city of Sochi is located, will see UES invest $1.3 billion in new generating capacity and a further $1.9 billion in the region's electricity network by 2011.

UES said in a statement that electricity consumption in the Krasnodar region grew 6.3 percent year on year in 2006. It is expected to grow further in the next few years.

"The agreement ... seeks to improve the reliability of electricity supply to customers and increase the network throughput capacity," the energy monopoly said.

It added that the investment would also prevent power shortages amid surging electricity demand in the region.

The agreement was signed in Sochi, which is bidding to host the 2014 Winter Olympics, by UES chairman Anatoly Chubais and Krasnodar Regional Governor Alexander Tkachev.

Chubais said last week that the company needed 3.1 trillion rubles ($117.7 billion) in investment funds through 2010, or almost $30 billion per year.

Chubais, speaking at a conference to present UES's investment strategy, said the total amount had been revised upwards from a previous 2.1 trillion ruble forecast.