Export rivals strike a deal

3 August 2002

Anatoly Chubais, head of Russian grid operator Unified Energy Systems (UES), and Oleg Sarayev, head of Rosenergoatom, have signed a new agreement that promises to resolve a long-standing dispute over exports.

The agreement provides for the nuclear industry to purchase 40% of the shares of Inter-UES, which operates the electricity grids on the Russian borders. According to the document: "Each company will now have the right to export electricity in an amount proportionate to its electricity share supplied to the internal market." Inter-UES will have the authority to sign contracts for electricity imports and exports on both companies' behalf. Officials of both companies have welcomed the deal.

The disagreement emerged in 1997 after nuclear power plants were transferred to self-financing schemes, due to a shortfall in "normal" funding. UES and Rosenergoatom drew up an agreement to ensure revenue generated from electricity exports would be distributed in proportion to the electricity share supplied by each producer. However, the deal collapsed last year and the issue of distributing the export income - $251 million in 2001 - remains open.

Russia exports 2.4% of the electricity that it generates, mainly to Finland, Belarus and Kazakhstan.

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