As a result of the Kurgan region’s fast developing economy, electricity use in the Russian province grew by 5.4% in 2006. However, Kurgan’s generation and network facilities are in a state of disrepair and need to be replaced, RAO UES commented.
The agreement is designed to ensure reliable electricity supply to customers by creating the conditions for new user connections to the power grids and increasing the capacity available for users already connected, while also preventing power shortages as a result of the increased electricity use.
The agreement includes investment projects to build and modernize 450MW of generating capacity, construct substations of different voltage levels with a total transformer capacity of 980MVA, and substations with 200MVA of transformer capacity in the region’s distribution networks.
According to RAO UES, around RUB19.1 billion will be needed to fund the investment programs, of which RUB12 billion will be used to expand generation capacity and over RUB7.1 billion will be invested in the power grid infrastructure.
RAO UES said that to ensure that the projects are properly financed, the region’s government will explore the possibility of setting an economically justified grid connection charge to finance the power grid developments.
RAO UES expects to see similar investment agreements signed with 17 other regional administrations in 2007, including the Volgograd Region and the Samara Region.
