RusHydro secures US$256 million loan from European Bank for Reconstruction and Development

MOSCOW, Russia 12/13/11 (PennWell) — The European Bank for Reconstruction and Development will provide a long-term loan of 8 billion roubles (US$256 million) to fund balance sheet optimization of RusHydro’s subsidiary in Russia’s Far East region.

RusHydro – a state-controlled company – is the world’s second-larges hydropower generator and has signed memorandums of understanding with several hydroelectric developers to expand that capacity even further.

The loan was agreed upon after maturities on local capital markets shrank dramatically due to current financial turbulence, according to an EBRD release.

The EBRD funding will enable RusHydro to go ahead with a planned restructuring of recently-acquired subsidiary OJSC Energy Systems of the Far East (ESV), the release said.

RusHydro will use the loan to refinance ESV’s short-term debt as part of corporate restructuring that also calls for the unbundling of the company’s electricity networks from its generation capacity.

It’s hoped that this overhaul will “improve productivity by bringing operating performance up to the highest Russian and international standards, including in terms of efficiency and reducing power losses,” according to the release.

RusHydro currently accounts for 12 percent of Russia’s installed electricity-generating capacity and produces about 165,000 GWh of power per year.