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.
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