UZBEKISTAN GOV’T SELLING INTEREST IN FOUR POWER PLANTS

Asia Pulse
Apr 13, 2005

TASHKENT, April 13 Asia Pulse – The government is selling blocking-off
interest in four power plants. The authorities want over US$150
million while experts doubt that foreign investors will be interested.

The Syrdarja Thermoelectric Power Plant is the largest in Central Asia
(3,000 megawatt). It produces almost one third of all electricity
generated in Uzbekistan. The Mubarak Thermoelectric Power Plant
generates 420 million kilowatt-hours a year, Tashkent 155.8 million,
Ferghana 560 million. All four power plants belong to the state.

A spokesman for FINAM (financial consultant of the government of
Uzbekistan) says that the authorities put up 39.23 per cent in
Mubarak, 38 per cent in Tashkent, 39 per cent in Ferghana, and 39 per
cent in Syrdarja plant for sale. The initial price was set at
$123.581 million, $11.144 million, $6.156 million, and $14.197
million.

Applicants have until May 15 to buy the documents concerning the
future contest and submit applications until June 15. This information
was confirmed by Mokhor Valiyev, assistant to the general director of
the Bureau of Individual Privatization.

According to Valiyev, the authorities do not intend to sell their
interest in the power plants in the next two years. Still, should some
strategic investor come up offering a fair price, the Bureau will
certainly consider the offer. Valiyev and Nikolai Fomintsev, Director
of the Department of Strategies and Business Development of FINAM, did
not say exactly whom the authorities of Uzbekistan expected to attract
as potential buyers. Fomintsev merely said that the circle of
claimants “is pretty clear” – a number of major Russian and foreign
companies. Fomintsev even said that some of them had already
approached FINAM.

Andrei Zubkov, an analyst with Trust Bank, assumes that the future
contest is oriented toward Russian companies first and foremost since
the authorities of Uzbekistan made FINAM their financial
consultant. The Russian Joint Energy Systems is already present in
Tajikistan and Kyrgyzstan where construction of a hydroelectric power
plant is about to be completed. Practically all of the energy industry
of Armenia belongs to the Russian Joint Energy Systems too.

Sources at its PR Department admit that the developments in Uzbekistan
are being viewed with interest indeed but decline comment on the
possibility of the holding’s participation in the contest.

Christian Drepper of E.ON PR Department claims that the company has
concentrated on development in Central Asia and Italy. “I’m afraid
that Uzbekistan is not exactly in the focus of our attention,” he
said. Spokesmen for Enel and AES declined comment.

Experts say that Uzbekistan wants a fair and reasonable price for the
power plants. “The cost of the power plants is roughly equal to the
cost of Russian assets,” to quote Aleksei Minayev, an analyst with
Rye, Man & Gor Securities.

All the same, Uzbekistan may encounter difficulties finding investors.
Alexander Yakubov of CenterInvest says that the assets are pretty old,
and the solvent demand for electricity in Uzbekistan is fairly
low. “That’s a difficult market. Order should be restored there
first,” Yakubov said. “I do not think that many investors will be
interested.” Zubkov added that export of electricity from Uzbekistan
is impossible and that too is a factor disheartening potential
investors.

From: Emil Lazarian | Ararat NewsPress