Italian utility Enel has strengthened its presence in the Russian electricity market, becoming the first foreign company to complete a public tender offer for a Russian energy company.
Enel now owns 59.8 per cent of OGK-5, one of six wholesale generating companies being privatized in Russia’s on-going electricity market liberalization process. It has paid around EUR2608 million for the stake in a buyout process that started in 2007.
“We have been in Russia for a number of years now and, step by step (sic), we have built an integrated presence covering the entire value chain,” said Fulvio Conti, CEO and General Manager of Enel. “It is a strategic presence for Enel in one of the largest markets undergoing liberalization in the world, one with excellent prospects for the profitability of our investments.”
OGK-5 was set up in 2004 as part of Russia’s electricity reform plans. It owns and operates four thermal power plants in some of the most developed and fastest-growing regions of the country. In the first half of 2007 it posted revenues of 13 748 million roubles and an operating profit of 1370 million roubles.
In addition to the stake in OGK-5, Enel owns 40 per cent of the Sever Energia natural gas consortium and 49.5 per cent of RusEnergoSbyt, an independent electricity supplier.