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The European Bank for Reconstruction and Development will give its first-ever long-term ruble loan to Moscow energy utility Mosenergo
The European Bank for Reconstruction and Development will give its first-ever long-term ruble loan to Moscow energy utility Mosenergo, the company said Wednesday. The EBRD said in a news release Wednesday that it "has successfully completed syndication of its 7.2 billion ruble (equivalent to $250 million) loan for Mosenergo [RTS ticker MSNG]." Mosenergo General Director Dmitry Vasilyev said the loan terms were very attractive, due to the company's good credit history. "Mosenergo has always honored its liabilities, including eurobond-related ones following the 1998 financial crisis," he said. "Besides, we have used loans for clear purposes: to replace and modernize equipment." Terms include a credit period for the first $100 million installment of 12 years, and seven years for the second $150 million installment, to be syndicated at leading Western banks, Vasilyev said He said the whole of the loan would go on repairs, modernization, and replacement, which would allow the company to channel its revenue and amortization expenses into construction of new generating facilities in the energy-hungry Moscow region. Replacing ageing equipment was crucial, Vasilyev said, given the strain under which the power system worked during unusually cold spells in January and February, when temperatures in the Russian capital plunged to -32°C (-25.6°F). The energy system was working at peak capacity, exceeding record levels of 16,000 megawatts. This winter, the utility had to cut supplies to some industrial and commercial consumers in order to maintain power and heat deliveries to residential customers and key services, while some regions suffered more serious effects. A failure at a local boiler house in the Moscow region town of Tomilino left 26,000 residents without heat. The EBRD said the deal would advance the reform of Russia's energy sector and liberalization of its electricity market. Mosenergo is the first Russian power company to have completed reforms. Since April 1, 2005, it has been the country's largest regional power generator, integrating 17 electric power stations with a total capacity of 10,600 megawatts. Electricity monopoly Unified Energy System (UES) holds 50.87% of shares in Mosenergo, while natural gas monopolist Gazprom controls more than 25% of the company's stock.
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