Page 123 - RusRPTFeb22

signing bilateral contracts and selling I-RECs from 2021 with the counterparties being AB InBev Efes, Beko, PhosAgro, Polyus, Sberbank, Shekinoazot, Sibur, STX commodities for foreign companies. The HPPs allow to supply green energy to the interested consumers and in 2021 hydro generation accounted for 44% of the total electricity generation of the company. At this stage, the premium for the green energy is minimal, but we believe this is set to evolve and allow for higher profits for gencos.
OGK2 has reported its FY21 production results. FY21 electricity production increased 10.6% YoY to 48.9bn kWh on the back of demand growth. Heat generation declined 9.4% YoY due to the weather conditions. We see the news as supportive for the company’s FY21 financials (due in March), even though the pace of growth slowed from the recorded 11.5% in 9mo21 (with record 3Q21 performance). We expect the story to deliver sound profit growth in 2022F on top of the 2021F improvement, and forecast a NTM dividend yield of 11.2% – though we note that to a large extend this is a coal-fired dividend yield (which is an issue for the ESG compliant investors).
RosAtom and Quadra officially announced that RosAtom had bought the 82.47% stake in Quadra from Onexim. All the necessary regulatory agreements have been received. A buyout offer to minorities is to follow. According to Interfax, the deal price was RUB 26bn, which matches the RUB 32.8bn fair valuation by PwC for 100% that was ordered by Onexim. As yesterday’s market close, Quadra’s market cap stood close to RUB 16bn (with the stake's cost at RUB 12.8bn). RosAtom and Quadra expect to achieve synergistic effects, including improvements to efficiency and the quality of heat supply to consumers, the expansion of customer service tools, and the possibility of launching green projects for the integrated development of territories together with the regions. Quadra has been long on sale. RosAtom expressed its interest in purchasing the asset in 2021 and, according to Kommersant, was considering shutting down part of the fossil-fuel generation to increase nuclear production. Vedomosti also noted the aim to reach a 25% share of nuclear generation in the electricity mix and this could be the way forward.
On 27 January, Unipro reported its FY21 production results. Total electricity generation was up 8.4% y/y to 45.2bn kWh, driven by the growth in demand and the colder temperatures during the winter season and the hotter summer. In 4Q21, production was 13.8% higher y/y, with Berezovskaya GRES seeing a 51% y/y increase (vs. zero production in 3Q21), although on the FY21 numbers, it improved generation only 3.8% y/y, despite launching the new unit. Along with that, in FY21 heat generation increased 12.4% y/y to 2,101th GCal due to the weather conditions.
On 27 January, RusHydro reported its FY21 operating results. Electricity generation, excluding Boguchanskaya HPP, was down 3.4% y/y (-3.3% y/y including it) to 126,528GWh. This was affected by water inflows for some
123 RUSSIA Country Report February 2022 www.intellinews.com