Support The Moscow Times!

Inter RAO Seeking to Acquire Nordic Assets

State-controlled power group Inter RAO is on the lookout to acquire assets in the Nordic States as it seeks to expand into a key export market, a board member said in an interview.

Inter RAO is a monopoly electricity exporter out of Russia, trading at the Scandinavian Nord Pool energy market, in the Baltic States and in Turkey via its units RAO Nordic, Inter RAO Lietuva and TGR Enerji.

Foreign generation accounts for about 18 percent of Inter RAO's total capacity of 33.5 gigawatts and is located in Armenia, Georgia, Kazakhstan, Lithuania, Moldova and Turkey.

"We are now seriously studying expansion possibilities in Scandinavia... Firstly, in Finland. The second are opportunities for our company in Sweden,"  said Ilnar Mirsiyapov, a member of Inter RAO's board and head of strategy.

He declined to give details but a source with the company said Inter RAO was looking at both generation and distribution assets.

Finland is a key export market for Inter RAO and used to account for about 40 percent of its foreign sales. But supplies to Finland dropped to about 20 percent of Inter RAO's total last year to 3.8 billion kilowatts an hour as cheaper hydroelectric power took market share.

Mirsiyapov said he hoped total export volumes would remain at 2012 levels of 18.4 billion kilowatts an hour this year or slightly higher.

Inter RAO, which was planning a secondary share offering, or SPO, from $1.5 billion to $2 billion to fund its internal and international expansion, has postponed a deal for at least 2 to 3 years, he said.

"An SPO is needed when the company is seeking funds for further development. … As of now, we do not have approved investment projects that require such money," Mirsiyapov said. He added that the company was still considering London for an SPO.

Inter RAO, Russia's third largest power firm by capacity, was planning to place shares between 2012-14, also to fund its international expansion.

It planned to increase foreign generation capacity to 10 gigawatts by 2015 but scrapped the plans a year ago to focus on the markets it is already in.

Inter RAO is majority-controlled by the state, with 13 percent owned by Norilsk Nickel, about 14 percent belonging to Inter RAO's own unit while 18 percent is held by minorities, including the free float.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more