PRESS: Rosseti to raise investment by 30% in next 10 years

MOSCOW, Jun 11 (PRIME) -- Russian state power grid holding Rosseti plans to raise investment by more than a third in the next 10 years mainly to build power grids for the Baikal–Amur Mainline (BAM) and the Trans-Siberian Railway (Transsib), Kommersant business daily reported on Friday.

Under the baseline scenario of the company’s long-term development program, approved by the government’s commission for the power industry, tit will raise revenue to 1.686 trillion rubles and the net profit to 224 billion rubles in 2030. The power transmission tariff will grow in line with inflation minus one percentage point until 2024 and inflation minus 0.1 percentage point after that. Payments for power reserves and technological connections will be introduced.

Under the pessimistic scenario, when the current regulatory parameters remain, revenue will rise to 1.43 trillion rubles in 2030 and the net profit fall to 7 billion rubles from 68 billion rubles in 2021.

Construction of grids for the BAM and Transsib will have a serious impact on the financial results of the company. Under the negative scenario, the investment program expands to 355 billion rubles in 2021 from 271 billion rubles in 2020 and further to 386 billion rubles in 2023, staying high after that.

Dividends that Rosseti receives from the interregional distribution grid companies (IDGCs) and Federal Grid Company of Unified Energy System (FGC UES) will amount at 26–33 billion rubles until 2030 under the pessimistic scenario, with the company’s ratio of debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) growing to 4.3x in 2030 from 2.2x currently. The baseline scenario sees investment program unchanged, but the debt to EBITDA ratio will fall to 1.3x thanks to a higher in revenue.

The strategy also says that the company should maintain ownership in the subsidiaries intact, which means abandonment of privatization of IDGCs at least until 2030 to reduce transaction costs and increase manageability.

The company also plans to raise non-tariff revenue by developing a chain of power filling stations for electric cars and by improving micro-grid services and systems for demand management. The company also wants to raise capitalization through a long-term stock option plan for its management and through a new dividend policy.

(72.1974 rubles – U.S. $1)

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