- Italian utility weighs disposing coal-fired Reftinskaya GRES
- Enel says it doesn't plan to exit Russia `plant by plant'
Enel SpA is considering selling its biggest Russian power plant after losing money in the nation.
While no final decision has been made on selling the 3,800-megawatt Reftinskaya GRES coal-fired power station in the Urals region, the company is “evaluating options for a possible sale,” the press office of Italy’s biggest utility said Tuesday by e-mail. Enel doesn’t plan to sell its four Russian generation units “power plant by power plant,” it said.
Enel last month cut its earnings outlook in Russia for this year after its local unit reported a 48.6-billion ruble ($705 million) net loss for 2015 as the nation’s economy shrank for the first time since 2009 and said it didn’t plan any dividend. Finances should improve next year, it said.
“I expect Enel to eventually offload its Russian business when the economy improves,” said Elchin Mammadov, a utilities analyst for Bloomberg Intelligence.
Russia’s power market guarantees strong cash flow only during the first 10 years of a new unit, when it receives stimulus payments, according to Fedor Kornachev, an analyst at Raiffeisenbank JSC in Moscow. Enel, one of the oldest investors in the sector, will see the end of this period by 2020, he said.
Reftinskaya GRES accounts for 40 percent of Enel’s installed capacity in Russia. It could have been valued at about $600 million before late 2014, when it accounted for 40 percent of Enel Russia PJSC’s earnings before interest, taxes, depreciation and amortization, Kornachev said. Now the market value of the unit, online since 1970, “totally depends” on a potential buyer, he said.
There are four potential buyers for the plant in Russia, Vedomosti newspaper reported earlier Tuesday.