Putin tells E.ON: ‘no cuts to power sector growth’

1 December 2008 – Russian Prime Minister Vladimir Putin has pledged not to slow the development of the power industry, responding to concerns from Germany’s E.ON.

“All the plans that we set out for this sector, we will fulfil. We will not cut them back,” RIA quoted Putin as saying.

On Friday Putin received E.ON’s chief executive, Wulf Bernotat, at the presidential residence in Novo Ogaryova. Bernotat was reported as saying the planned liberalisation of the power market was a key factor in E.ON’s $6bn acquisition of Russian power producer OGK-4 this year.

Since the acquisition the global financial crisis has knocked Russian share price indexes down by some 70 per cent and many industries have begun to lobby against the liberalisation of electricity prices, which power firms like OGK-4 are counting on to make a profit.

“As far as we are being assured, nothing has changed,” Bernotat said, according to an Interfax news agency report.

“It is important to us to know that all obligations will be fulfilled … It is important for us to have political support,” he was quoted as saying.

E.ON, through its subsidiary E.ON Ruhrgas, owns a minority stake in Russia’s gas export monopoly Gazprom and is a key importer of Russian gas into Europe. It is also working with Gazprom on the Nord Stream gas pipeline