Volts And Jolts: What To Expect As Russia Restructures Its Power Markets Nov 07

Standard & Poors, November 2007

Abstract
Russia's power generation industry reforms are overhauling the sector's structure and risk profile. The changes are coming about partly through the restructuring of RAO Unified Energy System of Russia, or UES (BB/Stable/--; Russia national scale rating 'ruAA''), the 52.7% Russian government-owned holding company that currently owns most Russian generation companies (gencos). Standard & Poor's Ratings Services believes the government is strongly committed to completing the restructuring in 2008, given growing power demand and concerns for a secure power supply, which require heavy investment. UES' generation and distribution subsidiaries are to be spun off, and UES to merge with Federal Grid Co. of the Unified Energy System (BB+/Positive/--; Russia national scale 'ruAA+). The government plans to deregulate power prices and privatize...

Companies mentioned in this report are:
- Endesa S.A.
- CEZ a.s.
- E.ON SE
- Russian Federation
- Mosenergo (AO)
- Gazprom OAO
- Irkutskenergo, AO EiE
- Enel SpA
- RAO UES of Russia
- Fortum Oyj
- Federal Grid Co. of the Unified Energy System

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

- Endesa S.A.
- CEZ a.s.
- E.ON SE
- Russian Federation
- Mosenergo (AO)
- Gazprom OAO
- Irkutskenergo, AO EiE
- Enel SpA
- RAO UES of Russia
- Fortum Oyj
- Federal Grid Co. of the Unified Energy System

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