Russian President Vladimir Putin has held talks with Anatoly Chubais, chairman of UES on the key points of the electricity sector's investment programme for 2006-2010, as well as the mechanisms for its implementation.

The talks relate to the completion of work on drafting a financial reform concept for the company drawn up on Putin’s instructions. One of the reform concept’s key elements is a programme of measures for attracting investment to the electricity sector. The newly created energy companies hived off from UES aim to raise significant private investment through additional share issues, the document says, which will be used to finance thermal generation projects.

The government gave the programme its approval at a meeting several weeks ago, as has the UES board. Additional sources of funds will include tariff revenues, connection fees, and budgetary allocations. The total amount of funds needed to implement the Investment Programme is more than RUB2.1 trillion. Chubais said that the programme’s implementation will make it possible to resolve the serious electricity shortages a number of the country’s regions have been facing.

The news comes as Territorial Generation Company 4 (TGC 4), one of the recently devolved generation arms of the Russian power mammoth UES, began construction on a two unit gas-fired CHP at Belgorodskaya.

The units will be built under the Rb 22 billion ($824 million) investment programme to 2010 to deliver 804 MW of electricity and 5452 TWh of heat annually.

Two 33 MW GE gas turbines will be installed at an existing plant site, increasing the plant’s capacity to 91.6 MW of electricity and 517 MW of heat.

The total project cost, estimated at Rb 1.7 billion ($63 million), project is expected to be financed for the most part with bank loans with the new capacity scheduled to come on line in late 2007.

TGC 4 comprises the regional generation companies operating in the Tula, Voronezh, Tambov, Bryansk, Smolensk, Lipetsk, Kursk, Ryazan, Oryol, Kaluga, and Belgorod regions.

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