A consortium has agreed to invest in the construction of small hydropower plants in Karelia, a region in the north-west of the Russian federation bordering Finland, via an agreement signed yesterday during the St Petersburg International Economic Forum.
The consortium comprises: The Russian Direct Investment Fund (RDIF); the government of the Republic of Karelia; Karelia-based power operator Nord Hydro JSC; the China Railway 24th Bureau Group and China Civil Engineering Construction Corporation, subsidiaries of Beijing-based state-owned China Railway Construction Corporation.
Last month, RDIF and the government of the Republic of Karelia signed a cooperation agreement to develop a favourable investment climate in the region and attract foreign investment to local projects.
Both parties agreed to provide business advice and legal support, and exchange information to implement investment projects in Karelia with RDIF pledging to support the republic in attracting foreign investors by placing detailed information about investment projects in the region on a government portal dubbed Invest in Russia.
“This project unites RDIF and the government of Karelia in their mutual aim to improve the energy infrastructure and investment climate in the region. By working together we hope to realize Russia’s considerable potential in small-scale power generation,” Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), said.
“The agreement with our Chinese partners marks a new phase in our campaign to engage strategic investors in Karelia. Cooperating with the Russian Direct Investment Fund will enable us to work together to improve the region’s investment climate and implement the most promising projects. The creation of mini hydro power plants, which will be built jointly with Nord Hydro, the China Railway 24th Bureau Group and China Civil Engineering Construction Corporation, is one of these projects. The agreement that we signed today reaffirms our commitment to partnerships and an open investment policy,” Alexander Khudilainen, head of the Republic of Karelia, said.
Under the agreement two small hydropower plants, Byeloporozhskaya HPP-1 and HPP-2, will be constructed, each with a capacity of 24.9 megawatts (MW). The project aims to create new, renewable and environmentally friendly energy sources to efficiently develop the Republic of Karelia’s power system.
If the project is successfully implemented, RDIF will consider the possibility of extending it to other parts of Karelia and other energy deficient regions in Russia.
“We are excited to initiate this partnership to jointly develop the electricity generation of the Republic of Karelia. The combination of our partners' technical expertise, financial resources and deep knowledge of the local market will promote the project,” said Wu Wanliang, chairman of CCECC.
RDIF was established in 2011 to make equity co-investments, primarily in Russia alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. Based in Moscow, RDIF’s management company is a wholly-owned subsidiary of Vnesheconombank.