The Russian hydro power utility said that Rusal had ‘backed off’ from its proposal to freeze construction. Instead, Rusal is to contribute a total of Rouble 1.7B (US$54.6M) over June-July towards the hydro power project, which the aluminium producer again views as a strategic development.

The utility, though, wants to see their new investment agreement signed as soon as possible, and hopes it will happen before the end of June.

The Boguchanskaya plant is under construction on the river Angara, in Siberia. It is to be equipped with nine units, each of 333MW nominal capacity supplied by Power Machines.

The first 7.86m diameter turbine was despatched in Q3-2008, and the next two units are to be sent to site later this year. It is planned that three generating units are to be commissioned each year over 2010-12, which is just over 30 years after work started during the Soviet era.

At full operation, the plant is expected to generate 17,600GWh of electricity per year.

The agreement between the Russian hydro power utility and Rusal would cover the remaining construction work and include details on the timeline, funding required and monthly payments to be made. The cashflow forecast would provide information for the development partners to provide or seek supplementary funds, such as bank debt.

Rusal recently paid Rouble 256M (US$8.2M) towards the project funds and plans to hand over a further sum of Rouble 551M (US$17.8M) before the end of June. In addition, in July it is to transfer Rouble896M (US$28.6M) extra towards the project finance needs.

RusHydro said that a signed legal document on the financing procedure would ensure funds are secured to make prompt payments to the supply chain, and as such would allow the co-developers to focus on construction progress.

Renewal of support for the hydro power scheme comes from Rusal changing plans to ensure the start-up of two smelters, Buguchanskaya and Tayshetskogo, to take advantage of the electricity available. In addition, Rusal has made changes to optimise the construction costs of the smelters.