Results of the Board of Directors meeting on December 3, 2019
December 5, 2019. Moscow, Russia. PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in joint attendance on December 3, 2019.
The Board of directors reviewed divestment of RusHydro Group’s shareholding JSC MEK, operating 565 MW Sevan-Hrazdan cascade of hydropower plants in Armenia.
The Board of Directors authorized management representatives of JSC Hydroinvest, a 100% subsidiary of RusHydro, to approve divestment of JSC MEK and enter into a share sale agreement with JSC Hrazdan Power Company (HrazTES), in respect of 527,085 ordinary shares representing 90% of all issued shares at a price determined by appraiser but not less than the book value of the asset payable in cash.
The deal is conditional on economic criteria as well as assurance of further strategic development of JSC MEK by its potential investors. The deal will be closed only after cancelation of RusHydro’s guarantees on liabilities of JSC MEK before European Bank for Reconstruction and Development and Asian Development Bank t due to full payment by JSC MEK due under respective loans from these banks.
Since RusHydro Group’s acquisition of JSC MEK, the company successfully implemented an investment plan aimed at modernization of the cascade’s hydropower facilities. As a result, installed capacity of Yerevan HPP-1 increased by 10% and a new automated control system was put in place, enabling better operations control and reducing water discharge by 4% during electricity power generation. The company also carried out a number of activities aimed at increasing safety and uninterrupted operations of the cascade’s plants. Overall, the investments for the period improved the system reliability of the facilities.
JSC MEK is one of the largest power generation companies in Armenia. It operates seven hydropower plants with combined installed capacity of 561,4 MW or 14% of the country’s total installed capacity. The cascade of hydropower plants produce 8-10% of Armenia’s electricity per year. The power generation by the plants of the cascade is dependent on water inflows of the Hrazdan river and water discharge from Sevan Lake.
The Board of Directors took into consideration information on implementation of the first phase of two single-circuit 110 kV Pevek-Bilibino power lines investment project.
The company currently carries out a feasibility study and project development.
The project’s first phase for construction of 110 kV high-voltage power lines comes in light of upcoming reconstruction of the Chaun-Bilibino power system following decommissioning of the Bilibinskaya nuclear power plant.
The Board of Directors took into consideration information on status of construction and modernization of thermal power plants in the Far East in accordance with the presidential decree dated 15.07.2019. In the scope of the projects’ requirements and taking into account the geographic location a decision has been made to establish three additional subsidiaries of RusHydro in Republic Sakha (Yakutia), Khabarovsk krai and Primorsky krai.
Four RusHydro projects in the Far East Eastern Federal District with total installed capacity of 1.3 GW were included in the government program on modernization of thermal power plants: Artyomovskaya CHP-2 (420 MW), Khabarovskaya CHP-4 (328 MW), 2nd phase of Yakutskaya GRES-2 (154 MW) and modernization of Vladivostokskaya CHP-2 (360 MW).
The facilities will operate locally manufactured equipment. Reliability of the electricity supply and social economic development of the regions will vastly improve upon start of operation of the facilities.
RusHydro is currently preparing project documentation as well as pre-investment feasibility in respect of these projects. Therefore, preliminary project parameters are subject to change.
The Board of Directors approved the report on Investment Committee’s activities in the 2018-2019 reporting year.
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 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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