Russian independent Eurosibenergo (ESE) has completed the purchase of five dams on Russia’s River Angara in Eastern Siberia from state-owned rival Rushydro.
The Bratsk right and left bank dams, the Ust-Ilimsk dam and the Irkutsk right and left bank dams were acquired for a total of 10.9 billion rubles (US$168.8 million).
ESE’s wholly owned subsidiary, Telmamskaya HPP, was the signatory to the deal, the value of which was independently assessed by KPMG and approved by ESE’s board of directors on October 7.
Controlled by Russian billionaire Oleg Deripaska, ESE paid for the assets in a single transaction on November 17 after drawing down loans for the purchase from state lenders Sberbank and VTB. ESE had previously rented the five dams forming the Angara cascade from owner Rushydro, which acquired the facilities in September 2011 for 7.6 billion rubles (US$116.8 million).
“The acquisition of the dams drew the bottom line under consolidation of ESE’s main assets, which enables us to have a single HPP technology and asset package, boost upgrades [and] ramp up reliability and efficiency,” ESE’s CEO Vyacheslav Solomin said in a statement last week.
The purchase follows other major acquisitions made by ESE in the last two years in a bid to reduce operating costs. In June, ESE acquired a 40% interest in Irkutskenergo from state-owned Russian power generator Inter RAO for 70 billion rubles (US$1.1 billion). Publicly listed Irkutskenergo is the region’s largest hydro and thermal electric power provider, generating 12,900 MW.
In July 2014, ESE also bought Rushydro’s 25% share in the Krasnoyarsk hydropower plant (HPP) in Siberia, bringing its combined stake to over 90%. Rushydro and ESE had previously discussed an asset swap for the shares in Irkutskenergo and the Krasnoyarsk HPP in return for a blocking stake in ESE. The deal fell through after Rushydro was unable to reach a purchase agreement with Inter for its 40% shareholding in Irkutskenergo.
ESE is Russia’s largest privately held power generator, providing around 8% of the country’s power supply. The group manages 18 power plants nationwide, commanding a generating capacity of 19,500 MW. Key customers include the Bratsk, Irkutsk and Krasnoyarsk aluminium smelters controlled by RUSAL, which is also part of Oleg Deripaska’s conglomerate EN+.