Amount of not repaid loans received by RAO UES reaches $675.08m - 23 October, 2002

The total amount of not repaid loans received by RAO UES of Russia reached RUR21.4bn ($675.08m), RAO UES Financial Director Dmitry Zhurba declared at a conference today. RAO UES owes RUR14.96bn to commercial banks ($471.92m), RUR74.6m ($2.35m) to the EBRD, and RUR2.3m ($73,000) to the Finance Ministry of Russia.

Zhurba declared that while earlier RAO UES subsidiaries received credits mainly from their suppliers (through advance fuel supplies), the energy holding company had been pursuing the policy of rejecting the system of 'loans in kind' recently in favor of obtaining short-term external loans. Among the negative factors in the obtainment of loans for RAO UES, he mentioned inefficient regulation of tariffs, aging assets of RAO UES and it subsidiaries, the high levels of credit and debit indebtedness of the energy holding company, as well as a lack of confidence in the results of the company's restructuring among investors.

Additionally, RAO UES plans to give more freedom to its subsidiaries in choosing credit policies. RAO UES will control only the amount of loans received by its subsidiaries.

Zhurba added that RAO UES planned to use the policy of "loans in exchange for long-term contracts for power supplies" to attract investments in completing the construction of large power plants.