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28 August 2007 - Russia's antitrust agency has granted Enel permission to take full control of wholesale generating company OGK-5, making the Italian energy group potentially the first to own a Russian utility.
"The agency has given permission for Enel to buy 70 per cent of OGK-5, which together with its existing stake, represents 100 per cent of the charter capital," an antitrust agency spokeswoman said.
The possible deal for an additional stake in OGK-5, which has four thermal plants with a total capacity of 8700 MW would come on top of Enel's acquisition in June of a 30 per cent stake in the generating company.
Fulvio Conti, Enel chief executive, said in Rimini, Italy, that Enel was waiting for clearance from the antitrust authorities before making a formal bid.
The sale of OGK-5 is part of a sell-off of power generation assets belonging to Unified Energy Systems, the Russian power monopoly, which is spinning off assets to raise more than $100 bn for investment in its ageing infrastructure.
Analysts had feared foreign energy groups could be blocked from taking control of the power utilities amid competition from Russian groups and a policy under President Vladimir Putin that has seen foreign participants relegated to minority roles in strategic sectors.
Finland's Fortum was blocked earlier this year from taking control of TGK-1 for strategic reasons: it serves St Petersburg, Russia's second city.
Steven Dashevsky, head of research at Aton, a Moscow brokerage, said yesterday that Enel's antitrust clearance was a good sign.
"The state will still have control of the business through the regulation of tariffs. But this deal allows foreigners to come in and streamline operations and cut costs. It's a win-win situation."
Enel also has a 49 per cent stake in Russia's largest independent electricity distributor, Rusenergosbyt, with Russia's ESN. The company has so far invested $2.6 bn in the Russian market.
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