OREANDA-NEWS. JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces signing today of the agreement with Power Construction Corporation of China, Ltd on cooperation in development of Leningradskaya pumped storage plant (PSP) in Russia and potentially other PSP capacity. The document was signed by the CEO of RusHydro, Evgeny Dod, and the Chairman of PowerChina, Fan Jixiang.

RusHydro and PowerChina have agreed to establish a joint venture (JV) with RusHydro's ownership at 51% and the remaining 49% held by PowerChina. The partners have also agreed that PowerChina can partner with other Chinese companies to create a consortium.

The agreement outlines a number of pumped storage projects that could be developed jointly in Russia and other countries. At the first stage the JV will focus on development of the Leningradskaya pumped storage plant near St. Petersburg with installed capacity of 1,560 MW (in generation mode) as a pilot project. The cost of the PSP is estimated at RUB 138 bn.

The partners plan to raise 70-75% of required funds as project financing from primarily Chinese and Russian institutions following the review of the feasibility study prepared by RusHydro earlier, project's economic parameters and selection of EPC contractor.

CEO of RusHydro Evgeny Dod commented: "The agreement marks a major milestone in cooperation between Russia and China in attracting Chinese investment, technology and expertise into the Russian power sector. We strongly believe that this cooperation will create value for our shareholders and benefit the Russian electricity sector, as the development of highly maneuverable pumped storage capacity in Russia is a key to improving reliability of the power system and electricity supply".

Chairman of PowerChina Fan Jixiang commented: "PowerChina attaches great importance to Russia's electricity, infastructure and road development. Today the largest companies of China and Russia - PowerChina и RusHydro - join their efforts to pursue the construction of the largest pumped storage plant in Russia. I am confident that our project has great prospects and will be a success".