OGK-1 Relies on the Government

The government controls OGK-1 through its majority stakes in hydroelectric giant RusHydro and the Federal Grid Company, which jointly hold most of OGK-1's shares.

OGK-1 general director Vladimir Khlebnikov announced that the company is in talks about a share offering to the government or one of its structures to finance the project in Urengoi.

Khlebnikov also said the company had secured a loan from Sberbank to help finance the Urengoi project and its everyday operations.

The project to build new power turbines in Urengoi will face a financing shortage of 8 billion rubles over the next five months unless cash is raised soon, Khlebnikov said.

The entire project is valued at 25.6 billion rubles.

Sources close to the company said last month that a state bank might buy a stake in OGK-1, as it is in urgent need of at least $1 billion to carry on with investment.

The generator was the only one of the country's 20 major electricity producers not to find a strategic investor during the reform of the sector. A preliminary deal to have Dubai's sovereign wealth fund invest up to $5 billion in OGK-1 fell apart last month.

Author: Ksenia Kochneva