2 information about the company i activities ii development prospects iii contents
TRANSCRIPT
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Information about the Company
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Activities
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Development prospects
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Contents
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Information about the Company
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Incorporates 29 companies in 15 countries of Europe and Asia
Controls energy production and distribution assets in Russia and abroad
Total number of employees — 15,000 persons
HQ — Moscow, the Russian Federation
Taking dominant position in Russia in the
area of power export-import
Active investment activity
INTER RAO UES — transnational energy holding
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INTER RAO UES: reference
RF home market
Import
Operations w/o transit via RF
Purchase of electric power, million MW
37.1 38.1
24.3
2004 2006 2007
33.8
2005
Source: calculations of INTER RAO
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INTER RAO UES: reference
Diversified operations and a wide portfolio of energy assets in Russia, Armenia, Georgia, Moldova, Kazakhstan, Ukraine, Northern and Eastern Europe
Presence in 15 countries with above-average indicators of economic growth
Team of skilled managers with proven work history
Value of current assets has increased since the merger with INTER RAO UES
Principal import-export trader (over 90%) of electricity in Russia
A leading company in electricity trading in Armenia, Belarus, Georgia, Moldova, Kazakhstan, Ukraine, Azerbaijan
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Nikolai Anoshko
Evgeny Dod
Sergei Kiriyenko
Vyacheslav Kravchenko
Grigory Kurtser
Alexander Lokshin
Sergei Maslov
Yuri Petrov
Kirill Seleznyov
Igor Sechin
Sergei Shmatko
Board of Directors
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Chairman of the Management Board:Evgeny Dod
Evgeny Dod has been the head of JSC INTER RAO UES since 1999 and after the Company’s reorganization became Chairman of the Management Board of OJSC INTER RAO UES
Under the leadership of Evgeny Dod, the company has become a dynamic international enterprise, operating in all segments of the energy market. The Company is successfully developing and its activities are constantly expanding.
Before coming to the electric power industry, Evgeny Dod had a successful career as a manager in a number of investment companies.
In 1995 Evgeny Dod graduated from the Moscow Aviation Institute with a specialism in “economy and management of an enterprise”. He got the second higher education in Academy of Management of the President of the Russian Federation.
Evgeny Dod has Ph.D. in economics.
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Uses the latest methods of corporate management and the most up to date technologies in the electricity industry
Directly or indirectly assists in expanding generation capacities and the development of a grid infrastructure within the RF
Participates in implementation of investment projects
Making a significant contribution to the international economic activity of Russia
INTER RAO UES —a successfully developing company
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Foreign trade activity:
Electricity export and import
Sales and purchases of electricity outside the RF
Sales-and-purchase activities on the wholesale electricity market of the RF:
Purchase of electricity for further export
Sale of imported electricity
Purchase of electricity and supply to the Kaliningrad Oblast
Sales and purchase of electricity on the domestic wholesale market
Additional sales of electricity.
Production and investment activities
Management of electricity assets in the RF and abroad
Activity areas
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2004 2005 2006 2007
Installed capacity of the Holding power stations, MW 2495 6915 7365 7578
Electricity generation by the Holding companies, bln. KWh 4,02 7,842 11,742 12,325
Electricity exports under company contracts, bln. KWh 9,98 20,93 20,52 18,14
Electricity imports under company contracts, bln. KWh 11,46 10,14 5,11 5,62
Average number of employees in the Holding companies, thsd. 4,47 17,10 16,41 14,48
Electricity transmission lines of the Holding (length), thsd. km 3,1 32,7 32,7 35,3
Key performance indicators of JSC INTER RAO UES Group and Company in 2004-2007
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2004
2005
2006
2 495
6 915
7 365
2007 7 578
Since 2004 the installed capacity of the INTER RAO UES Group’s power plants has increased more than 3 times
MW
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3 100
32 700
32 700
35 300
2004
2005
2006
2007
And the length of the power transmission lines has increased more than 10 times
km
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1997
JSC INTER RAO UES was established as a 100% affiliate
of RAO UES of Russia
INTER RAO UES: stages of development
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1997 2001
INTER RAO UES: stages of development
Commencement of projects for supply of non-Russian electricity on foreign markets
Supply of electricity produced by the Ignalinskaya AES (Lithuania) to Belarus and Russia
Three affiliates established for operation on foreign energy markets
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1997 2001 2002
INTER RAO UES: stages of development
Commencement of independent electricity export from Russia to Scandinavia (Nord Pool)
Commencement of own production of electrical power at a leased facility of the Iriklinskaya GRES
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1997 2001 2002 2003
INTER RAO UES: stages of development
Rosenergoatom became a shareholder of the Company, purchased 40% of the stock
Export-import contracts of OJSC RAO UES of Russia transferred to JSC INTER RAO UES
Generation and distribution assets in Georgia and Armenia purchased
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1997 2001 2002 2003 2004
INTER RAO UES: stages of development
The Company started trading on the RF wholesale electricity market
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1997 2001 2002 2003 2004 2005
INTER RAO UES: stages of development
Expansion to Central Asian markets; purchase of generation assets in Kazakhstan and Tajikistan
Purchase of distribution assets in Armenia and generation assets in Moldova
Expansion in own production of electricity in RF by means of additional leasing of the Kaliningradskaya TETs; and increase in the share held in the Severo-Zapadnaya TETs
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1997 2001 2002 2003 2004 2005 2006
INTER RAO UES: stages of development
INTER RAO UES JSC manages a group of companies, operating in 15 countries of the world
Issue of CLN valued at USD 150 mln is organized
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1997 2001 2002 2003 2004 2005 2006 2007
INTER RAO UES: stages of development
On February 9, 2007, the Board of Directors of OJSC RAO UES of Russia approved the main provisions of JSC INTER RAO UES strategy
A decision on the incorporation of the generation assets below into JSC INTER RAO UES authorized capital is made:
JSC Severo-Zapadnaya TETs
JSC Ivanovskiну PGU
JSC Kaliningradskaya TETs-2
JSC Sochinskaya TES
JSC Sangtudinskaya GES
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1997 2001 2002 2003 2004 2005 2006 2007 2008
INTER RAO UES: stages of development
Acc. to Decree of the RF President OJSC INTER RAO UES is incorporated into GK Rosatom
Vneshekonombank approves the funding plans of the OJSC INTER RAO UES investment program through credit arrangements and participation in the Company’s authorized capital
Shares of the Company are quoted on Russian stock exchanges
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Tasks of the Company
» A steady increase in business value
» Ensuring a stable and active presence on target markets
» Expansion of areas of activity
» Transformation of the Company into a vertically integrated holding with a wide range of activities in the electricity industry
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Activities
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AssetsManagement
InvestmentActivities
Export-Import
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Trading activities of OJSC INTER RAO UES
2008
* Maximum capacity of crossflows is indicated in the main directions
Import to RFExport from RF w/o transit via RF
Finland1,460
Lithuania400
Belarus900
Ukraine 250
Kazakhstan (North)
1,000
Azerbaijan350
Georgia 365
Latvia700
TajikistanMoldova
Romania
Kazakhstan (West)
350
Mongolia 180
Kazakhstan (South)
China50
Kyrgyzstan
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Trading activities of OJSC INTER RAO UES
INTER RAO UES participates in parallel in the work of the energy system of RF by providing emergency capacity reserves and ensures the reliability of the RF energy system through transmitting electrical power via neighboring countries (Kaliningrad, Northern Caucasus, etc.)
One of the main tasks of the company is use of trading activities to increase the presence and influence of RF on the target power markets of the company
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Azerbaijan
Georgia
Norway
Lithuania
Finland
Ukraine
Belarus
Latvia
Kazakhstan
China
Mongolia
54%
15%12%
19%
8%
6%
2%
1%
0,2%
Electric power exports structure in 2007
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Export of electricity by JSC INTER RAO UES in 2007
Supplies: 18.14 billion kWh(2.38 billion kWh less than in 2006)
Main buyers:
Finland (over 54%)
Belarus (15%)
Kazakhstan (12%)
Latvia (8%)
Lithuania (6%)
Border trade: to Norway and northern regions of Finland from dedicated hydroelectric generators of Borisoglebskaya GES, Rayakoski GES, and Kaitakoski GES
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IIIName
2002 2003 2004 2005 2006 2007
Volume of electricity deliveries, billion kWh
Volume of deliveries, in total 0.85 13.35 14.52 22.12 21.17 19.14
Export 0.85 7.91 9.97 20.93 20.52 18.14
CIS countries 0.70 7.02 5.46 9.19 5.95 5.38
Other foreign countries 0.15 0.89 4.52 11.74 14.57 12.76
Deliveries w/o transit via RF 5.44 4.55 1.19 0.65 1.004
Dynamics of electricity supplies as per contracts of INTER RAO UES in 2002–2007
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Import of electricity by INTER RAO UES in 2007
Total volume: 5.62 billion kWh(up 0.51 over 2006)
Insignificant change in imports from Kazakhstan to Lithuania in comparison with 2006
Imports from Ukraine and Moldova increased
59%
17%
8%
6%5%
4%
Kazakhstan Ukraine Lithuania Azerbaijan Georgia Moldova
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Azerbaijan
Georgia
Lithuania
MongoliaMoldovaKazakhstan
Latvia
59%
17%
Ukraine
8%6%
5%
4%
1%
0,25%
Electric power imports structure in 2007
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ChinaAzerbaijanGeorgia
Moldova
Norway Finland
Belarus
Latvia
LithuaniaUkraine
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2005 2006
Export
Import
Kazakhstan Mongolia
10,010,5
20,9
10,1
5,1
20,5
Export and Import Turnover in 2004-2007, bln kWh
20,518,14
5,62
20072004
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Electricity sales
During 2007, the Oryol affiliate company sold electricity on theretail market of the Oryol Oblast as a provider of last resort in acc.with Order of the Tariff Service for the Oryol Oblast No. 01-06-16.
Covered by the service are:
6 cities
17 districts of the region
196,000 consumers
28% of the total consumption of the Oryol Oblast
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AssetsManagement
InvestmentActivities
Export-Import
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Principles of management of foreign assets
Improve financial and economic indicators of the activities of these foreign companies
Expand operating and sales activities, gaining a supplementary benefit on external markets
Increase the company’s capitalization
Increase the business value for shareholders via:Improvement of the quality of operating activitiesStability of payment for electricity soldParallel work with UES of Russia in energy systems of neighboring countries Expansion of the geographical spread of export-import operationsOrganizational and technical preparations for access to new energy markets
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Severo-Zapadnaya TETs
Kaliningradskaya TETs-2
Ivanovskiye PGU, Stend
Orel Region Branch
Finland
Moldova
ArmeniaGeorgia
Ukraine
Tadzhikistan
Kazakhstan
Sochinskaya TES
The Group’s assets are located in a number of countries of the world
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IIIDistribution
Trading
Assets of OJSC INTER RAO UES
Generation
?
,
, .
Affiliate companies
Severo-Zapadnaya TETs900 MW, gas
Ivanovskiye PGU and bench435 MW, gas
Kaliningradskaya TETs-2450 MW, gas
Moldavskaya GRES 2520 MW, gas/coal/fuel oil51% ownership
Sochinskaya TES78 MW, gas Georgia
Мktvari600 MW, gas.100% ownership
Khramihesi I and II220 MWcontrol, hydro
Telasi 75% ownership
KazakhstanEkibastuzskaya GRES-21000 MW, coal,50% in ownership
Armenia
Armenian Nuclear Power Plant 815 MW, control
Sevano-Razdanskiy cascade560 MW, 90% ownership
Electric Networks of Armenia 67% ownership
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III Installed electrical capacity: 900 MW
Installed heating capacity: 700 Gcal
Russia: Severo-Zapadnaya TETs
Heat and power station with a binary combined-cycle plant, the first heat and power station of the new generation of Russian energy sector
December, 2000 — Start-up of the first power unit of PGU-450T
November, 2006 — Start-up of the second power unit
from October, 2007 — heat delivery from unit No. 2
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Russia: Severo-Zapadnaya TETs
Northwestern region is the second-highest in Russia in terms of the rate of energy consumption growth
Priority tasks in 2008:
Completion of technical re-equipment and revamp of the process water supply for power units 1 and 2
Construction of the second evaporative cooling tower, reflux area of 3,200 sq.m. Commissioning date : Q3 2008
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November, 2005: The first power unit of 450 MW was put into pilot operation
2008–2010: construction of power unit PGU-450 MW No.2
2008 — engineering and survey work for construction of a heat pipeline from from Kaliningradskaya TETs-2 to the southern part of Kaliningrad
Heat delivery (preliminary timeframe) — 2010
Russia: Kaliningradskaya TETs-2
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The base of the production complex: combined cycle gas plant of 325 MW
One of the first Russian electricity stations in the country within the scope of the investment program of the RAO UES of Russia Holding
Russia: Ivanovskiye PGU
PGU’s objectives:
New effective technologies development
Creation of spare capacity in the region
Energy and power shortage coverage in the region
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The first combined-cycle electric generating plant in Russia constructed using domestic equipment only
2007 — the first unit of PGU-325 MW is commissioned via two start-up complexes
May, 2008 — the first unit of the Ivanovo Combined-Cycle Plant commissioned
Q2 2008 — commissioning of the third start-up complex
Russia: Ivanovskiye PGU
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Russia: Sochinskaya TES
Equipped with combined-cycle gas units PGU-39:
Russia-best technical, economic and environmental indicators
Up-to-date process control systems
Installed capacity: 78 MW
Annual average production :565 million kWh
Commissioning:December, 2004
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Russia: Sochinskaya TES
Construction of a heat pipeline to Sochi. Commissioning: 2008,funding sources: own funds
Program for technical re-equipment and
development for 2008/2012:
Expansion of the Sochinskaya TES (2nd train) double unit No.3, 80 MW,including autotransformer AT 220/110
- Construction start: 2006- Commissioning: Q2 2009
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Covering 25% of energy consumption in the region
One of the largest electric energy providers of the Oryol Oblast to industrial plants and state-owned organizations.
Furthers the Company’s business diversification
Serving :4 000 legal entities 194 000 individuals6 cities17 districts of the region
Russia:Affiliate in the Oryol Oblast
July, 2005 — established
October, 2005 — started operating
2006 — gained the status of a provider of last resort
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Installed capacity: 1,000 MW(2 units, 500 MW each)
Equity interest: 50%
GRES interest amounts to 10-12%of the overall e/e capacity generatedin the republic
Prospect:
increase in supplies to Russia
e/e generation build-up, consolidation on the local market
KazakhstanStantsia Ekibastuzskaya GRES-2
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Tajikistan.JSC Sangtudinskaya GES-1
Russia-Tajikistan joint venture, established for completion and operation.
Set up on 16.02.2005 under preliminaryagreements between the Presidents of Tajikistan and Russia and an execution agreement
Is being built on the Vakhsh River 200km away from Dushanbe:
the end of the 80s – the beginning of the 90s — the beginning of construction and its suspension
since 2005 — massive project financing(after negotiations between Russia and Tadzhikistan)
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Tajikistan.JSC Sangtudinskaya GES-1
Design capacity: 670 MW
4 units
20.01.08 — commissioning of the first unit
02.07.08 — commissioning of the second unit
Units 1 and 2 produce 72 million kWh/month each. Design capacity
of the thermal plant after start-up of all four units is 670 MW
Construction of the thermal plant is planned to be completed
by end-2008
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The Company owns:
8,111 transforming substations
24,300km of overhead transmission lines
5,300km of cable transmission lines
ArmeniaCJSC «Electric Networks of Armenia»
Number of consumers: about 950,000
Among the largest enterprises of Armenia
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Sevano-Razdanskiy Cascade of HPPs
Armenia
Capacity: 560 MW
Equity interest: 90%
The cascade consists of 7 HPPs on the Razdan River
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Trust management from 2003
JSC Armianskaya Atomnaya Electrostantsia (Armenian Nuclear Power Plant) is the sole operating atomic station in the Caucasus and neighboring countries (Turkey, Iran, and Iraq)
Effective electricity supply to consumers in
2007 was 2.4 billion kWh
Positive results of management were many
times acknowledged by Ministry of Energy
of Armenia
ArmeniaArmenian Nuclear Power Plant
Capacity: 815 MW
Main consumer is the
energy market of Armenia
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III Installed power: 2,520 MW
A unique station, operated using three kinds of fuel (gas, fuel oil, and coal)
March, 2005 — incorporation in the Group of INTER RAO UES
1st April, 2007 — electricity supplies to Romania
Moldova. Moldavskaya GRES
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GeorgiaJSC Telasi
Supplies electric energy to more than 410,000 consumers:
95% — population
3.7% — commercial sector
5,658km – total length of power transmission lines
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IIIKhramhesi I and Khramhesi II Mtkvari Energy
Georgia
Capacity: 110 MW each
Generated electric energy goes to JSC Telasi for realization
Capacity: 600 MW
The Company owns the 9th and the 10th units of Tbilisskaya GRES
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Ukraine
Activeon the Ukrainian market since September, 2000
Equity interest: 90%
Investment projects support implementation:
In the course of new energy complexes construction
In the course of the existing objects re-equipment and reconstruction
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Finland: RAO Nordic OY
Trading operations on the Scandinavian electric energy market since 2003
Equity interest: 100%
Among the largest enterprises of Finland
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Toward 2008, activities geography has embraced 15 countries of Europe and Asia
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Development prospects
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Means for meeting strategicgoals of the Company
Development of the Company’s generation capacity
Strategic goals of the Company
Heat generation
Hydro-generation
Nuclear generation
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Sales of energy generated by
nuclear stations owned by GK
Rosatom
Energy sales on the markets where the
Company is present
Means for meeting strategic goals of the Company
Развитие генерации Компании
Strategic goals of the Company
Energy wholesale
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Distribution of energy across the territory of the RF together with GK
Rosatom via the CJSC PEK
Means for meeting strategic goals of the Company
Развитие генерации Компании
Strategic goals of the Company
Оптовая торговля электроэнергиейEnergy retail sales
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Electricity sales
Operation of nuclear generation facilities (together with GK Rosatom)
Participation in construction of nuclear generation facilities on RF territory and abroad (together with Atomstroy-export)
Provision of funding for construction of new nuclear generation facilities on RF territory and abroad
Means for meeting strategic goals of the Company
Развитие генерации Компании
Strategic goals of the Company
Оптовая торговля электроэнергиейРозничная торговля электроэнергиейRendering of a new multi-faceted service
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Key objectives of OJSC INTER RAO UES are
Development of new assets
Further penetration into target markets
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Central Asia andthe Far East
South-Eastern Asia
Eastern Europe
Baltic region
Scandinavia
The Black Sea region
Central America
Current assets of INTER RAOPotential acquisition targets
Africa
India
Pakistan
Target energy markets
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* — Credit Swiss First Boston valuation
** — Based on Consortium of independent appraisers of RAO UES of Russia
*** — Target value
Key strategic targets to be achieved by 2015determined by Russian Government
To increase installed capacity up to 30,000 MW:
owned capacity up to 15,000 MW capacity under management & joint-venture up to 15,000 MW
To increase enterprise value to 14 billion US dollars
1,1*
2005 2007 2015
2.9**
14***
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Strategic goals
To create an international vertically-integrated energy holding focused on generation of electricity with a perspective of building vertically-integrated chains on target markets
To make efficient investments in construction of new and modernization of existing energy objects and provide energy objects management services
To provide a solid energy supply, saving and increasing the energy safety both in Russian Federation and other regions of Company’s presence
To execute functions of the operator of electricity export/import. To coordinate commercial and technological activities of external and internal markets’ participants
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Contact information
7 Entrance, 12 Krasnopresnenskaya Embankment, Moscow, 123610
Telephone: +7 (495) 967-05-27
Fax: +7 (495) 967-05-26
www.interrao.ru