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Meeting with Head of RusHydro Nikolai Shulginov

January 11, 2019, The Kremlin, Moscow

Vladimir Putin had a working meeting with Chairman of the Management Board and General Director of RusHydro Nikolai Shulginov to discuss the company’s performance results and plans for the near future.

Public Joint-Stock Company Federal Hydro-Generating Company RusHydro is a Russian energy company that owns most of the hydroelectric power plants in Russia. It is one of the largest generating companies in the country.

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President of Russia Vladimir Putin: What can you say about last year, Mr Shulginov?

Head of RusHydro Nikolai Shulginov: The RusHydro group of companies has shown steady growth in operating performance. The output of the group as a whole, and of each of the hydropower plants, was higher than in 2017, although that year was also a record one.

The capacity of the group’s power plants increased by 335 MW after the opening of a new power plant in Vladivostok – the 140 MW Vostochnaya CHPP. Also, a few days ago, we completed the launch of the third hydraulic unit at the Ust-Srednekanskaya HPP in Magadan, on the Kolyma River. The overall capacity increased by another 50 MW as a result of the modernisation of our hydroplants.

We expect to report good financial results: a revenue of 407 billion rubles, EBITDA at some 102 billion and a net profit of around 30 billion rubles.

We would have reported better results if not for the so-called devaluation, that is, stranded projects in the Far East. However, our profits will be higher than in 2017.

We also expect our dividends to increase by some 35 percent on the previous year. This is what we plan to report to the Government. It amounts to 50 percent revenue under IFRS.

We will pay higher taxes on all budgets, or some 78 billion rubles. I believe we will be able to complete the construction of the Sakhalin GRES-2 and the Nizhne-Bureiskaya HPP. We will also complete the CHPP in Sovetskaya Gavan and the Zaramagskaya HPP-1 in North Ossetia-Alania.

We have held a Board of Directors meeting and adopted a business plan for 2019. Regrettably, our expenses will be higher because the cost of the fuel basket as a whole will increase in 2019 by 10.5 billion rubles, or 17 percent, with coal accounting for 9.5 percent of the rise.

This year we will continue to replace obsolete power stations to modernise the thermal power sector in the Far East. You have approved our projects in the Far East, arising from the poor technical state of the existing facilities.

No decision regarding this has been officially adopted yet, but there are preparations for a Government resolution on the modernisation programme and amendments to the law. We would like to secure your support for some aspects of this programme.

I believe this should be considered a priority, although we are still at the preparatory stage with these projects, which will be launched later.

Second, we would like the implementation of these programmes to be entrusted to RusHydro’s operating companies, namely the Far-Eastern Generating Company, the Far Eastern Distribution Grid Company and RAO Energy Systems of the East.

For one thing, we were instructed earlier to increase our share in all Far Eastern companies to 100 percent. Therefore, we should be responsible for the implementation of these programmes. We must do this.

We would like your support so that our profitability is the same as stipulated in the modernisation programme for the European part of the country, Siberia and the Urals, that is, 14 percent.

Also, these modernisation projects should be financed by wholesale consumers. This model has been successfully applied in Kaliningrad.

We would like to secure such support. There are also other issues I would like to report on in more detail.


January 11, 2019, The Kremlin, Moscow