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Plan for Export of Electricity to Japan Revived

Power generator and exporter Inter RAO has revivified a plan to sell electricity to Japan through an underwater cable.

The company is looking to build a coal- or natural-gas-fired power plant on Sakhalin island as part of the proposal, said Ilnar Mirsiyapov, the firm's chief for strategy and investment. A high-voltage line would connect it with customers on the nearby Japanese islands of Hokkaido and Honshu.

When Russia first proposed the idea to Japan in 1998, it was not clear if it would be profitable, he said. But now that the country has to cut down on nuclear power after the Fukushima reactor meltdown, Japan might give the plan another chance.

Several potential Japanese investors are studying the option, Mirsiyapov said without naming them. Sakhalin is home to a number of major offshore natural-gas projects, which could feed the fuel to burn at the power plants. Some of these projects have Japanese companies as shareholders.

The island also boasts a robust coal mining industry.

Mirsiyapov said Inter RAO is counting on Japanese banks to provide financing for the project because interest rates are lower in that country.

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