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EuroSibEnergo will have an overall capacity of 19.5 gigawatts, making it the biggest private generator in Russia, with a 9 percent market share.
“We are now converting our short-term debt into long-term loans,” Solomin told The Moscow Times.
“And if our structure is transparent, it is easier for banks to understand us, and our subsidiaries will have less difficulty in attracting capital.”
While Solomin declined to give a figure for the new holding’s entire debt load, the publicly traded Krasnoyarsk hydroelectric station and at the end of June owed $40.8 million and $290.4 million, respectively.
EN+, part of Basic Element Holding, said Wednesday that it would consolidate its generating capacities, coal miners, power-sales firms and engineering company.
EN+ holds 50.1 percent in Irkutskenergo and fully controls Nizhny Novgorod-based VolgaEnergo, EuroSibEnergo-Engineering and distribution company Marem+, as well as miner Resursserviceholding and other coal mining assets. Solomin said uniting the power generators with the coal miners would allow greater synergies for EuroSibEnergo.
Unlike most of the power generators that took part in the privatization of the sector in the period from 2007 to 2008, EN+ Group’s generation assets have no obligation to carry out investment programs because they were not a part of Unified Energy System.
EuroSibEnergo is not planning to launch any power stations until 2011 at the earliest, Solomin said. “However, our investment program is very dynamic,” he said. “And we can change it if we see significant positive changes on the market.”
There were some signs of that already, Solomin said.
“We see significant improvements on the electricity market in comparison with the beginning of the year, and we believe the market will stabilize by the end of the year and will slightly grow in 2010,” Solomin said.
“There is currently a drop in consumption, but the fall allows us to use only our most efficient capacities and raise our net interest margin,” he said.
System Operator, the electricity market regulator, said Wednesday that electricity consumption fell 6.6 percent in the first seven months of the year.
And while construction of powers stations has slowed down because of weak demand and a lack of financing, the firm’s engineering unit still gets orders for maintenance.
“Now, it’s mainly overhauls and maintenance that EuroSibEnergo-Engineering gets orders for. … The generators are obliged to spend money on that,” he said.
