The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

The start of real reform

A free market for Russia's electricity is within sight as the break-up of the power sector bolts through the halfway mark. Ben Aris reports.

pylons.gif

THE BREAK-UP of Russia's power sector and the move towards a free market for electricity has reached the halfway mark as power monopoly United Energy Systems (UES) gets ready to auction off its generating assets in one of the last big privatizations on the slate.

By this summer, UES hopes to have created 24 super-regional generating companies (gencos) out of 72 existing regional power companies (energos). These will then be auctioned off to private investors.

"There has been a lot of movement and now the energos are already in the process of restructuring in preparation for the sell-off," says David Herne, a UES board member and the head of the restructuring committee that represents minority shareholders' interests to management. "Most of the action is under the surface," he says.

UES daughter companies account for 57% of Russian power sales, with nuclear power plants controlled by state company Rosenergoatom providing the remainder.

Russia launched a trial free market for power towards the end of last year in which energos can sell between 5% and 15% of their output to customers at unregulated prices. All price controls are due to be dropped by 2006.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree