The company wants to use money from Russia’s Stabilisation Fund to build a hydro power plant in Sangtudin, according to the company’s Chief Executive.

Anatoly Chubais described construction of the Sangtudin plant as a crucial project to enable Russia to strengthen its position in the region, and said that UES will be looking to the Russian government’s Stabilisation Fund for financing.

The Stabilisation Fund was established on 1 January 2005 to accrue revenues from oil sales at a price of over US$20 per barrel. As of early June 2005, the Stabilisation Fund totalled approximately US$33B. According to a forecast from the Russian Ministry of Economic Development and Trade, the fund will accrue about US$40B by the end of 2005 and about US$80B by the end of 2008.

According to Chubais, the Russian government has supported UES’ mechanism of investment guarantees. He added that the electricity utility plans to hold the first tender in the second half of the year for the construction of new electric power stations using this mechanism.

The Chief Executive said his company was studying regions with electricity shortages for the prospective construction of new electric power stations. UES board member Sergei Dubinin, the country’s former chief banker before the 1998 financial crisis, said that the Ministry of Economic Development and Trade was expected to submit the document on the investment guarantee mechanism to the Justice Ministry for further work.