Russian power firm InterRAO seeks bigger Turkey role

MOSCOW – Reuters

Russian state power company InterRAO board member Ilnar Mirsiyapov speaks during an interview at the Reuters Russia Investment Summit in Moscow, Russia, September 14, 2016. REUTERS photo

Russian state power company InterRAO may enhance its presence in Turkey once relations between Moscow and Ankara are fully restored, a board member told Reuters Russia Investment Summit.

Russian business is looking once again for opportunities in Turkey, which used to be Russia’s fifth largest trade partner before a Turkish jet fighter downed a Russian bomber near the Turkish-Syrian border last November for violating the Turkish air space. 

Business ties suffered after the incident. Both sides agreed to unfreeze relations in trade and economy in July after Turkish President Recep Tayyip Erdogan expressed regret over the shooting down.

“It is possible that with the full normalization of the economic ties we will look at this market. We are open [to possibilities],” said Ilnar Mirsiyapov, InterRAO board member, who oversees strategy and investments at the company.

InterRAO already owns the Trakya power plant in Turkey, which it bought in 2012 for $67.5 million.
One of Russia’s top power producers, InterRAO is headed by Boris Kovalchuk, son of Yury Kovalchuk, a close ally of President Vladimir Putin.

The West imposed wide-ranging sanctions against Moscow for its role in Ukrainian crisis in 2014, but InterRAO is not subject to them.

Mirsiyapov said that Europe’s move towards renewable energy was also an obstacle for the company’s business in that continent, while other markets were of interest for his company.

“We are ready to look at South East Asia, Latin America,” he said during the Summit, held at the Reuters office in Moscow, adding that the company would acquire only a large slice of the market, no less than 10 to 20 percent.

He also said that electricity exports this year would be roughly flat compared to 2015. InterRAO supplies power to a number of countries neighbouring Russia, such as Finland, China, Lithuania and Belarus.

Mirsiyapov provided a forecast of InterRAO’s net income for 2016 of above 60 billion roubles ($922.5 million) under International Financial Reporting Standards (IFRS), up from 23.94 billion roubles in 2015.

The earnings include proceeds from the sale of Irkutskenergo for 70 billion roubles earlier this year, of which InterRAO received 45 billion roubles.

He said that 2016 the dividend will likely be no less than 25 percent of the net income under IFRS.