IES buys TGK-7, plans to give control to Gazprom

19 May 2008 – Integrated Energy Systems (IES) has bought control of Russia’s Territorial Generating Company No. 7 (TGK-7) from Russia’s former electricity monopoly Unified Energy System (UES).

IES, also known by its Russian acronym KES, already owns just under 30 per cent of TGK-7, meaning that the acquisition of the further stake will give it control. IES spokeswoman Nadezhda Rukina was quoted by the press as saying that negotiations with Russian gas monopoly Gazprom over TGK-7 were still ongoing.

State-controlled UES is selling TGK-7, along with 19 other major power generating firms, as part of a sweeping reform of the sector that will see the Soviet-era monopoly dismantled and mostly privatised by July 1.

TGK-7 increased net profit 11.5 per cent to 1.803bn rubles ($76m) in the first quarter of 2008 compared to the same period of 2007, the company said in a report. TGK-7, one of the largest territorial generating companies, includes 21 combined heat and power plants with capacity to generate 6900 MW of electricity and 30 700 gigacalories/hour of heat.