Anatoly B. Chubais,
Chief Executive Officer of the Unified Energy System (UES) of Russia,
has been at the helm of UES for two years and started privatizing the
power sector with the divestiture of five regional energos as part of
a loan agreement with the World Bank.
The restructuring
of Russian power is a key element in the agreement between the government
and the World Bank as part of the SAL-3 structural adjustment loan. The
terms of the deal stipulated that UES create a number of independent electricity
generators. This should encourage the liberalization of the sector and
become a springboard for future expansion.
UES sees three restructuring
stages. UES plans to split up the utilities into generation, transportation,
distribution and service businesses. Keeping the high-voltage grid and
control transmission lines from the regional energos via share swaps,
acquisitions and the offsetting of debt. UES will reduce its ownership
in generation, distribution, and service businesses through the sale to
strategic investors. The development of the wholesale market is the key
at this stage of restructuring, as independent generators will eventually
sell electricity to end-customers on a competitive basis. The first stage
of restructuring will begin in March 2001 and finish in 2003.
UES owns 100% of
a 42,000-km grid of high-voltage transmission lines that transmits electricity
between regions.
Gazprom planned
to reduce fuel deliveries to UES. UES and Gazprom signed an agreement
on gas supplies for 2000.
UES put electricity
exports as a priority and announced several export projects. UES has an
agreement with PVO (Finland) to export 11.3 TWh of electricity to Finland
in the 2000-2004 period. And signed with Belenergo (Belorussia) and PSE
(Poland) to export electricity to Germany through Belorussia and Poland.
UES has negotiated a deal with Ukrenergo (Ukraine), Verbund (Austria),
and RWE and Bayerwerk of Germany. UES and Ukrenergo are to sell electricity
to western European energos, which will resell the electricity to Greece,
Yugoslavia, Yurkey and northern Italy. Exports are expected to start in
2002.
The restructuring
of the utilities should result in a highly competitive environment where
private generators will sell electricity to the wholesale market. This
should lead to better pricing for consumers and improved efficiency in
utilities. The wholesale market is to be broken up into four sectors.
UES is introducing an electricity exchange.
All transactions
will have 100% transparency ensuring the financial stability of the company
and creating an investment-friendly environment.
|