OREANDA-NEWS. Federal Grid Company of Unified Energy System ("Federal Grid Company" or "the Company") (Moscow Exchange, LSE: FEES), part of the Russian Grids Group of companies and the operator of Russia's Unified National Energy Grid (“UNEG”), announces that Russia's Ministry of Energy has approved the Company's investment programme for 2015-2019. The investment programme will total RUB 563.7 billion.

Federal Grid Company plans to install 42.3 MVA of transformer capacity and construct 10.9 thousand km of transmission lines during the period. The programme's main priority areas are to maintain current levels of reliability by 2019, prevent accident rates from increasing, bring online 11 generating facilities with total capacity of 6.7 GW, and fulfil obligations under state programmes in full, including the implementation of strategically important projects.

A significant portion of the financing for 2015-2019 (more than RUB 186.8 billion) is earmarked for implementing projects in Siberia and the Far East, including developing the infrastructure of the Baikal-Amur Mainline and Trans-Siberian railroads, construction of new facilities and connection of mining and processing plants to the Unified National Electricity Grid (UNEG). Spending on renovation and network development is planned at RUB 108.1 billion, with RUB 122.2 billion allocated for technical connection of consumers. In addition, RUB 33.8 billion from the Company's own funds will be used to increase the reliability of the electricity systems of the Central and North-West federal districts.

Federal Grid Company's core strategic goals are implementation of a long-term investment programme in conditions of tariff restrictions with a reduction of investment spending per unit of 30% by 2017 (compared with 2012) and minimal reduction in physical indicators (additions to fixed assets), completion to schedule of new investment projects of national importance, and maintenance of a high level of reliability.

Additional core goals include optimisation of installed capacity utilisation, reducing the cost of technical connection to the grid, and seeking and using new mechanisms for financing investments in the UNEG to create opportunities for technical connection by using non-tariff funding sources.

In the first nine months of 2014 the Company's revenue to Russian Accounting Standards was RUB 124.3 billion (+8.4% year on year) with net profit of RUB 1.3 billion (against a loss of RUB 3.8 billion a year earlier).

Administrative costs declined by 8%, driven by the Company's cost-cutting initiatives.

Following the successful redemptions of call options in 2014, gross debt has decreased 9% since start of the year to RUB 257.77 billion.

“Federal Grid Company's efforts to improve operational efficiency have helped to offset the negative external macroeconomic environment and maintain economically efficient operations,” said Andrei Murov, chairman of Federal Grid Company's Management Board.

“The company is operating in conditions of severe tariff limitations,” Andrei Murov said. “In these conditions we have created an effective investment programme that is ideally suited to current demands and financing sources while maintaining comfortable debt levels.”