OREANDA-NEWS. December 29, 2010. JSC “FGC UES” (Federal Grid), the operator and manager of Russia’s unified trunk electricity transmission grid system, announces today the approval of its investment programme for 2010-2014. Board of Directors of Federal Grid approved an investment programme of RUB 952.4 billion (circa EUR 22.9 billion) covering a five year period from 2010 to 2014. The programme provides for high-scale construction and renovation of the electricity grid, removal of network restrictions, technological connection and providing network capacity for newly built power plants throughout the country.

Investment programme highlights:

construction of 73 new substations with wattage of 220-500kW and total capacity of 89,180 MVA;

construction of 123 new high-voltage power lines with wattage of 220-750kW and total length of circa 21,000 km;

new construction will receive a share of 65.5%, and renewal of transmission assets will receive 32.9%, of the total investment.

The new five-year investment programme has already been approved by the Energy Ministry of Russian Federation. It was developed from the previously adopted investment plan for 2010-2012 as part of the Federal Grid’s transition to five-year regulatory period.

The main elements of the investment programme include the following:

Renewal of fixed assets

Development of backbone network in Russian regions

Network extension and upgrade as part of the federal priority development programmes (including Sochi Olympics)

Provisioning for the capacity of nuclear, hydro and thermal plants

Upgrading grid facilities in Moscow, St. Petersburg and Tyumen region

The investment programme will be financed mainly from the company’s own funds and borrowing, as well as a comparatively small contribution from government funding and technological connection fees.

Oleg Budargin,  Chairman of the Management Board of Federal Grid, commented:

“This is a unique and carefully designed investment programme that will help to modernize Russia’s high-voltage electricity grid and bring it in line with the rapidly increasing electricity demand in the growing Russian economy. We aim to cut over half the number of unconnected generating assets, considerably reduce the possibility of system faults, provide transmission capacity for c.23 GW of newly commissioned power generation and remove technological restrictions to power transmission within the system.

In the nearest future we are planning to complete some of the most important and complex infrastructure projects, such as provision of power supply for the Olympic Games in Sochi and construction of the East Siberia – Pacific Ocean Oil Pipeline.

This investment programme will be financed primarily from the company’s own funds and the funds borrowed on the international capital markets, with the government investment dramatically reduced compared with previous years.

We are proud of what we have achieved so far at Federal Grid, and we are looking forward to meeting the new challenges.”