Page 125 - RusRPTFeb22

730MW of capacity due for construction (selected in 2017-18), of which 253.4MW is already in construction and 473.2MW is at the development stage. Along with that, Rosnano is to continue its cooperation with Fortum in the 1.4GW of renewable projects selected in September 2021
On Tuesday 11 January, Market Council decided not to fine Enel Russia for the delay to the Kola wind farm in December 2021, as well as for January and February 2022, due to the force majeure situation related to the flood affecting the supply of equipment and spare parts via the bridge near the station. This decision now allows Enel Russia to negotiate with consumers. We remind readers that at the end of 2021, Market Council declined to lift the fines.
Analysts see the news as slightly supportive and note the following.
● The Kola wind farm was due to be commissioned in December 2021 and the official expectation is for it to be launched in May 2022.
● During the 9mo21 conference call, management noted the possibility of further delays from May 2022, so we remain cautious, although at the end of 2021, Enel Russia expressed the expectation that further delays would not happen.
● The fines that have been cancelled only cover three months and have yet to be approved by each and every consumer. So, the decision does not automatically lift the fines: last time, with the Azov wind farm, Enel Russia managed to sign agreements with 50% of large consumers (waiving 28% of the capacing penalty), and the Market Council also did not approve it the first time around.
● Moreover, Enel Russia has already reserved these fines, so the agreement with consumers could imply their partial reversal.
● At the same, we estimate the monthly size of the fine at RUB 73mn currently (Enel Russia previously estimated it at RUB 60-65mn per month before the growth in OFZ rates), thus, this is not market moving for profitability. However, any potential further delays are key for the investment case, as they would directly affect the possibility to deliver on the elevated dividend due to be paid in 2023 (the one on the 2022 results and the delayed dividend for 2020).
9.2.11 Metallurgy & mining corporate news
125 RUSSIA Country Report February 2022 www.intellinews.com
● Gold & Diamonds
Alrosa sales of rough and polished diamonds in 2021 totaled $4,169mn, including proceeds from rough diamond sales of $3,977mn, and polished