Page 97 - RusRPTJul19

9.1.10 Utilities sector news
Russian Rosatom expects to triple its FX-denominated revenues by 2030 by expanding the number and type of foreign projects and new products, the head of the nuclear energy agency Alexei Likhachev told Reuters on June 24. As analysed by bne IntelliNews, the state-owned Rosatom is on a tear and the export of nuclear technology is already one of Russia’s biggest export earners. The company operates 35 nuclear power stations in Russia that produce 28GW of power or 18% of domestic energy needs, and it is actively exporting its nuclear technology to countries around the world. Rosatom has a foreign order book of 36 reactors in 12 states including Belarus, Bangladesh, China, India, Turkey, Finland, Hungary, Egypt, and Iran. Further expansion of exports revenues is the strategic goal of the agency, according to Likhachev, and is seen growing to 70% of the revenue mix by 2030. By 2023 export revenues could grow to $15bn from $6.3bn in 2015, according to him, putting nuclear exports behind grain exports of $25bn in 2018 and arms exports of $15bn. Outstanding contracts for the next decade are estimated at $133bn, out of which $90bn are abroad. Recent reports also suggested that Rosatom could get a boost in state support as it is lobbying for its own National Project entitled “Nuclear science, equipment, and technology,” that potentially involves RUB800bn ($12.3bn) of investment into the nuclear power sector. Currently 12 National Projects are approved with a total budget of RUB25.7 trillion through to 2024, out of which RUB13 trillion would be financed from the federal budget. Reportedly Rosatom is ready to finance 51% of the Nuclear national project from its own funds.
w
9.1.12 Transport sector news
Railway cargo volumes continued falling in May, down 4% y/y to 106mnt, and with the gondola segment accounting for a quarter of that drop. Still, total turnover was 2.3% y/y higher, supporting freight operators’revenues even amid lower volumes. However, the most important event, we believe, was the recent correction in gondola leasing rates. While insignificant (down 1% m/m, from RUB1,925/day to RUB1,900/day), after a period of no gains (since November) this might be the start of a decline, pressured by a balanced fleet and thelack of growth from the biggest market driver, coal. Among other important freights, we see the 9% y/y drop in oil volumes as a one-off, and thus unlikely to affect the oil tanks market.
Coal. Volumes were flat y/y in May, at 31mnt. With the recent drop in global thermal coal prices, we see downside risks for volumes on exporter reluctance to pay elevated lease rates, which remain high.
Oil & oil products. We consider the 9% y/y decline in May to have been a one-off: it was, in our view, caused by the lower capacity at refineries, which started largescale repairs in 2Q19 and decreased processed crude oil volumes 8% y/y in May.
Building materials. Construction cargos lost 7% y/y in May. We believe rail is losing its share to auto and river transportation.
Metals. Iron ore was the fastest growing cargo in May, gaining 3% y/y. We associate the growth with strengthening global prices, which were stoked by a
97 RUSSIA Country Report July 2019 www.intellinews.com