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Russian grid firm FSK increases investment plans for 2011

In a bid to revamp its operations and upgrade, Russian grid firm FSK is mulling 2011 investments increase of almost 11 per cent. The move will see the energy firm hike its 2011 investment spending to $7.3 billion, as it prepares for a listing on the London Stock Exchange and its part-privatization. A company spokesperson confirmed the move to Reuters, reiterating FSK’s plans for major revamps and upgrades.

FSK is a Russian State-owned entity and it had initially planned to spend $6.6 billion this year as part of a combined 952.4 billion roubles outlay by 2014 to upgrade its worn out network. In its plans, the new increased investment sum will be funded via new loans, estimated at about 20 billion roubles, Reuters reported. According to the spokesperson, FSK will consider a horde of different ways to increase investment, from bond placement to bank loans.

He further stated that the change won't affect household electricity tariffs. In 2010, FSK successfully issued 10-year bonds worth 50 billion roubles ($1.7 billion). However, the firm last month suffered a setback when Vladimir Putin, Russia’s Prime Minister, called for a lower than hoped for limit on electricity tariffs ahead of next year’s presidential elections in the country.

The FSK is currently in the Russian government’s list of companies to be part privatized as part of a 1 trillion roubles ($34.67 billion) fund raising plan. However, the FSK Group needs all the cash it can get to invest in its network. Russia's government has said the renovation of the country's power grid infrastructure by 2030 would require 10 trillion roubles ($348 billion) as part of the country's modernization plan.

Russia's government has said the renovation of the country's power grid infrastructure by 2030 would require 10 trillion roubles ($348 billion) as part of the country's modernization plan.

Last year, the Russian group and French engineering group Alstom signed an industrial and technology cooperation agreement in the field of electric power transmission. The agreement was aimed at establishing a multi-faceted cooperation between the companies for the modernization of the Russian electrical grid through improved local production of electrical equipment and the introduction of advanced smart grid technologies.

The collaboration will cover technical and production process advancements for products such as high and ultra-high voltage power transformers, gas and air-insulated substations, high voltage direct current transmission, flexible AC transmission systems, network management and substation automation solutions.

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