RusHydro has Signed Contract for Integrated Reconstruction of Cascade of Kubanskiye HPPs
JSC RusHydro (ticker symbol: RTS, MICEX, LSE: HYDR; OTCQX: RSHYY) has signed the main contract with Alstom Hydro France, Alstom LLC and JSC OEK for integrated reconstruction and modernization of Cascade of Kubanskiye HPPs and supplement agreement No. 1 to the contract.
The project implies integrated modernization of Cascade of Kubanskiye HPPs, in particular, of eight hydro power plants and one pumped storage hydropower plant of Cascade. The estimated duration of the project is 10 years.
Under the contract signed, Alstom will design, manufacture, deliver and install the equipment as well as supervise the installation. An essential feature of the project is introduction of automated technologies for Cascade centralized control from the town of Nevinnomyssk. Joint stock company "Integrated Energy Building Corporation" (OEK) will be responsible for construction part of the project. Alstom and OEK plan to engage other subcontractors, both Russian and international.JSC Mosoblgidroproekt (RusHydro's subsidiary) was approved as the general contractor for the design stage of the project.
The Contract was concluded within the framework of a prior agreement between RusHydro and Alstom Hydro regarding the basic terms for engaging the latter as the general contractor, which was signed in December of 2010 in the presence of the Chairman of the Russian government Vladimir Putin and the Prime Minister of France Francois Fillon.
The Contract conclusion signifies a new stage in implementation of RusHydro strategy of integrated modernization of its hydropower facilities - transition from planning to implementation. In future the company will continue progress in this direction and is intended to sign other agreements within the framework of its long-term integrated modernization program this year.
Integrated modernization will enhance stability of the Kuban and Northern Caucasus power system due to use of high technologies and installation of new equipment as well as increase the capacity of the entire Cascade and its component HPPs, which is of crucial importance for the region deficient in generation capacities.
Also within the framework of meeting between the top management of the two companies a protocol of intent was signed according to which RusHydro will hold 50% + 1 Shares in a Joint Venture with Alstom for production of hydro-power equipment. Providing equipment for the integrated reconstruction of the Kubanskye HPP cascade will be one of the pilot projects for the new joint venture.
The signed document confirms companies' mutual obligations in creation of the joint venture and stipulates fundamental principles to be reflected in the shareholder's agreement and agreement on licensing, technology transfer and use of Alstom know-how, as well as in constitutional and other documents of the joint venture.
The Protocol was signed as a part of a previous cooperation agreement concluded between JSC RusHydro and Alstom and concerning construction of a plant manufacturing the up-to-date hydropower and auxiliary HPP equipment-companies' pilot project in Bashkortostan. Agreement on its establishment was signed in this February in Ufa, in the presence of the President of the Russian Federation Dmitry Medvedev. The plant will specialize in manufacture of hydropower equipment for smaller hydraulic power plants with the capacity of up to 25 MW, and equipment for automatic process control systems and integrated security systems. In the long view the venture will be producing the equipment for medium HPPs with the capacity of up to 100 MW and pumped storage plants with the capacity of up to 150 MW. According to preliminary assessment, the first hydropower equipment will be released from the plant in 2013, while manufacture of automatic process control systems will have started by the end of 2011.
Alstom is a world leader in power generation and transmission and railway infrastructure development and is one of the leading companies in the field of development of innovative and eco-friendly technologies. Alstom manufactures the fastest trains and builds the automated underground system with the highest throughput. Alstom provides for integrated decisions for turn-key construction of power plants and accompanying maintenance of various energy sources, including hydraulic power engineering nuclear power engineering, gas, coal and wind. The company offers a wide range of power transmission decisions oriented to intelligent networks. 93.5 thousands of employees in about 100 countries work in the group of companies, its sales in 2010/2011 financial year exceeded 20.9 bln Euro.
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.
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