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News
January 24, 2012
IFC METROPOL participates in The Central and Eastern European Forum in Vienna
Investment Financial Company METROPOL acted as
partner of The Central and Eastern European Forum that took place
17-18 January this year in Vienna, Austria.
Every January this forum brings together the heads of governments
and central banks of CEE countries, leading world economy experts,
Russian and European institutional investors to discuss most
relevant questions and issues of economic development of Central
and Eastern Europe, Russia and CIS countries and to determine key
lines of activity for the year ahead.
Within the framework of the official Forum program, 17 January IFC
METROPOL organized round table “Attracting Investments to the
Russian Energy Sector”. “The selection of the workshop subject was
by no means occasional, - emphasized Arthur Plaude, Managing
Director of Department for Debt Instruments and Derivatives of IFC
METROPOL. – Over the few past years, we have participated, as
organizer and co-organizer, in issues of bonds of leading Russian
energy companies, we are the market maker and leading operator of
the bond market of energy industry companies”.
IFC METROPOL invited its partners – representatives of Russia’s
leading energy companies – to take part in the discussion. Session
speakers were Viktor Kudryavy , member of the Board of Directors
of RusHydro and MRSC, Deputy Minister of Energy of the RF in
1996 – 2000, Maria Merzlikina, Deputy Head of Corporate Finance
Department of UES Federal Grid Company, Roman Ponkrashchenkov, Head
of Treasury of Sibir Generating Company MC, and Alexey Rodzyanko,
Chief Executive Officer of IFC METROPOL Pyotr Kadysh, Head of
Division for Analysis of Debt Instruments and Derivatives of IFC
METROPOL acted as the round table’s moderator.
Opening the panel discussion, Kadysh characterized the
current condition of the Russian power industry, stressing the
necessity to make capital investments in the industry. V. Kudryavy
noted that within the nearest 10 years, approximately 150 billion
Euros will be needed for development of the power generating
sector, and about 110 billion Euros – for development of the
national power distribution network. Whereas formerly Russian power
companies were facing the task of preventing ageing of fixed
assets, at present, commissioning of new facilities is vital. A
rise in power supply rates can support fixed assets, but to ensure
output capacity gains, other financing vehicles are needed, many of
which have not been developed to a full measure in Russia yet.
Attractive facilities can be long-term bank loans, project
financing and bond issue. A crucial factor is interest of European
investors and support of financial consultants, who are able to
help energy companies to raise funds for capital investments.
Russian power generating companies are, on the whole, attractive
for investors, because they enjoy state support. Regulating
mechanisms supporting the high credit worthiness of Russian power
generating companies were discussed by representatives of both
generating and distributing companies.
R. Ponkrashchenkov spoke about the system of power supply allotment
agreements, a mechanism that will allow Russian energy companies to
bring back investments in construction of new generating
facilities. In compliance with this system, actually, consumers
will be paying by instalments for the construction of new
power-generating units, the output of which they are about to
consume. The payback period for such investment projects is on
average 15 years, but generating companies hope to reduce the
payback period by cutting their costs. Cost effectiveness
will be also achieved through commissioning new facilities ahead of
the schedule. According to R. Ponkrashchenkov, participation in
this scheme will be very beneficial for Russian generating
companies.
M. Merzlikina of UES FGC noted that implementation of tariff
regulation using the RAB methods makes the basis for the power grid
companies to attract investments. Application of this mechanism
makes it possible to ensure stable cash flows and guarantees
repayment of borrowings raised by energy companies on a large
scale. Even under the recession conditions, companies are realizing
investment programs and searching for new sources of funding in
order to attract investors in debt securities.
Summing up the discussion, Rodzyanko said that, in spite of its
dependency on external market environment, the Russian economy
should feel well in the new year, for the high oil prices have
ensured budget surplus for the country in 2011. He expressed hope
that Russian companies, including energy entities, will not stop in
their implementation of capital investment programmes and will be
able to attract long-term capital, both Russian and foreign, at
relatively low costs.
Rodzyanko: “We have seen substantial interest in the topic of our
discussion among the forum participants. I believe that
interest therein will be only growing as time goes by: vital
infrastructural changes are coming that would pave the way
for offerings of Russian energy debt securities to the
international investment community; via the Euroclear system,
foreign investors will be able to directly purchase rouble bonds
issued by domestic energy companies”.
The prospects of investments in the Russian energy industry
discussed during the round table were appreciated personally by
investors invited by IFC METROPOL to the conference – Ya. Petrov,
Head of Zenit Portfolio Managers MC, D. Yeroshkevich, Managing
Director of Inter Broker, A. Nosarev, Manager of assets of
Portfolio Investments MC, etc.
On the second day of the forum, 18 December, Russia session was
held, with Alexey Rodzyanko as one of the speakers. The speakers
discussed economic conditions of making investments in Russia and
concurred that no substantial deterioration was observed: corporate
balance sheets of Russian companies were quite stable, and sources
of financing were reliable.
Guests of IFC METROPOL highly appreciated the company initiative
for organization of the round table and the trip as a whole.
As V. Kudryavy said, he completely supported the METROPOL
initiative for attracting European investors’ attention to the
Russian energy sector and considered it to be vital and
well-timed:“Company specialists know the state of affairs in the
industry very well. I believe that through joint efforts we have
managed to demonstrate that the industry is very attractive for
investors, due to both the state support and the structural changes
that are under way. I hope, this round table will become a
tradition and turn into a permanent forum for joint work of Russian
power companies, domestic and foreign investors and
financiers”.
R. Ponkrashchenkov noted: “I liked the conference. A very
informative event. It is encouraging that nobody loses optimism in
the crisis situation. Europeans are confident that the current
problems, however serious, are curable. It is obvious that
they have “medications” in stock… Hopefully, European problems will
not materially affect our country. I share the optimistic point of
view that Russia will be growing in 2012. Apart from the very
conference, I enjoyed the atmosphere in the team brought together
by METROPOL. Thank you very much for the invitation!”
M. Merzlikina summed it up as follows: “I liked the conference very
much – first and foremost, because of its business-like atmosphere
that the organisers managed to create and the high professional
level of the discussions”.
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