TGC-1 owns and operates hydro power and thermal power plants in North-West Russia as well as heat distribution networks in St. Petersburg. Currently Gazprom Energoholding owns 51.8% of the TGC-1 shares and Fortum 29.5%.
As part of the restructuring, Fortum will establish a joint venture together with Rosatom to own the hydro assets of TGC-1, while Gazprom Energoholding continues with the heat and thermal power businesses of TGC-1. By utilising its present stake in TGC-1, Fortum would obtain a 75-plus-percent ownership in the new hydro power company. Rosatom would have a 25-minus-percent minority holding in the new hydro power company.
Fortum, Gazprom Energoholding and Rosatom have signed a protocol to start the restructuring process. The parties shall agree on the detailed structure, practical arrangements and final commercial terms of the transactions. The new company will be consolidated to Fortum Group as a subsidiary.
Provided that Fortum obtains a 75-plus-percent ownership in TGC-1 hydro assets, Fortum would be ready to participate with a minority stake (max 15%) in the Finnish Fennovoima nuclear power project on the same terms and conditions as the other Finnish companies currently participating in the project.
"These transactions strengthen the cooperation between energy sector companies in Finland and Russia and also with our long-term partner, Fortum," says Mr. Sergey Kirienko, CEO of Rosatom.
"Restructuring of TGC-1 assets will increase Fortum’s total hydro power generation by 60% to 34 TWh, which clearly demonstrates Fortum’s strong commitment to CO2-free production. As we already have more than five decades of experience in working in Russia and with Russian partners, increasing our volume of hydro power in Russia is a natural step for us", says Tapio Kuula, President and CEO of Fortum Corporation.
"Fennovoima’s nuclear project is important for Finland. While Fortum’s participation and competencies are extremely valuable for the project, it will also provide Fortum with possibilities to grow in the area of nuclear expert services", says Mr. Kuula.
TGC-1 is a major Territorial Generating Company in terms of installed capacity operating in the North-West Russia. TGC-1 generates electricity and heat in 54 power plants in St. Petersburg, Leningrad oblast, Karelia and Kola regions and supplies heat mainly in the St. Petersburg area.
TGC-1 owns and operates a fleet of 40 hydro power plants with a total capacity of approx. 3,000 MW. Hydro power generation accounts for 41% (12-13 TWh) of the company’s total electricity generation. In addition, the company owns 14 thermal plants with a total electricity capacity of 4,300 MW (with a production of 17 TWh/a) and has a total heat capacity of 16,500 MW (29 TWh/a). The shares of TGC-1 are listed on the Moscow Exchange (MOEX).
