JSC ROSSETI (LSE: RSTI) ("Rosseti" or the "Company"), the largest power transmission and distribution company in Russia, and State Grid Corporation of China (SGCC) today signed an agreement to establish a joint venture (JV) to invest in the reconstruction of electric grid infrastructure and new power capacity in Russia, and potentially abroad. The signing took place during the official visit of the Chairman of the People's Republic of China Xi Tszinpin to Moscow.
The agreement was inked by Rosseti CEO Oleg Budargin and SGCC Deputy Director General Du Zhigang.
The joint venture will invest in the construction, reconstruction and subsequent operation of electrical grid facilities. In addition, it will act as an EPC contractor for the construction of turnkey facilities, providing engineering, procurement and construction services in Russia and other countries.
Rosseti will own a 51% stake in the joint venture, while SGCC will own the remaining 49%.
“We anticipate that investments in these joint venture projects in the area of distribution and transmission lines could amount to up to $US 1 billion per year”, said Oleg Budargin, CEO of Rosseti.
The projects will be financed in part by the shareholders themselves, with additional funds to be raised from Chinese and other international financial institutions.