The Russian government intends to continue on its course of privatizing state-owned assets in the fuel and energy complex, Russian President Vladimir Putin said at the first meeting of the presidential commission for the fuel and energy complex.
"The government will continue on its course of privatizing state-owned assets in the framework of previously adopted decisions. I want to emphasize that," he said.
Putin said that "today around 25% of the entire fuel and energy industry is in the hands of foreign investors." Not anywhere near in all countries where energy is so important is there such a situation with a foreign investor presence.
"We have significantly liberalized the fuel and energy complex," he said.
"At the same time, the government will further continue to privatize in the context of previously adopted decisions," Putin reiterated.
"Without a doubt, given the special importance of the fuel and energy complex's contribution to the budget process, issues related to energy security - we must also pay special attention to that," Putin said.
Yet it is only feasible to privatize Russian power generating company OJSC RusHydro (RTS: HYDR) after its investment program is completed, Putin added.
"One should not sell today what will obviously cost $40 billion tomorrow, at an estimated $7.5 billion!" Putin said, referring to expert appraisals.
"We know which projects will be introduced in the near future: the Boguchany Hydroelectric Power Plant (HPP), the Sayano-Shushenskaya HPP will be completed, Far Eastern assets will be consolidated," he said, adding that all of these activities will sharply boost RusHydro's value.
Putin said the commission would discuss the participation of OJSC Rosneftegaz in the privatization of fuel and energy companies.
"We can't describe Rosneftegaz's participation as privatization in the truest sense of the word, but we will be acting in the framework of the law. We have to bear in mind that we have limited income for some or our companies with a number of previous government decisions, and they need recapitalization. They can and must be helped to obtain fairly cheap money to develop their operating activity," Putin said.
Putin has signed a decree to enable Rosneftegaz to buy into fuel and energy companies slated for privatization and that "need recapitalizing for their development." Analysts have named Federal Grid Company (FGC) (RTS: FEES), Inter-District Grid Company Holding (IDGC Holding) and RusHydro (RTS: HYDR) as the main candidates for quasi-privatization.
It is thought Rosneftegaz will buy 85 billion rubles in new RusHydro stock and consolidate a blocking stake in the company.
Putin said the state would not limit itself to privatization involving Rosneftegaz. "Of course we must and we will be striving for pure privatization, but this must be absolutely transparent and fair to all citizens," he said.
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