Prime Minister Vladimir Putin Wednesday accused Russian tycoons of underinvesting in the country's aging power system and threatened to impose fines or limit their companies' access to the power market.
Prime Minister Vladimir Putin Wednesday accused Russian tycoons of underinvesting in the country's aging power system and threatened to impose fines or limit their companies' access to the power market.

Vladimir Potanin's OAO OGK-3, Leonid Lebedev's OAO TGK-2, Mikhail Prokhorov's OAO TGK-4, and Viktor Vekselberg's ZAO Integrated Energy Systems didn't do what was required in the power industry while benefiting from state funds, Putin said Wednesday at the Sayano-Shushenskaya power plant, according to Russian news services.

Proposals to build out power capacity where there was "guaranteed demand" and government interest, such as the Sochi Olympic site, have come to naught, Putin said.

"The news is negative for the generation companies slated by Putin, and we would expect shares to come under pressure today," UniCredit SpA said. Fines for not fulfilling the mandated investment program are 25% of the program's size, the bank said.

In July 2008, Putin criticized OAO Mechel billionaire shareholder Igor Zyuzin for the pricing of raw materials in Russia , sending the company's American depository receipts down 38%.

Separately, Putin Wednesday said the government will allocate RUB53 billion for constructing new nuclear power plants in Russia . Russian electricity consumption in January returned to levels seen before the financial crisis, he said.

Russian mining giant OAO Norilsk Nickel (GMKN.RS), which owns a controlling stake in OGK-3, declined to comment immediately, as did Potanin's Interros Holding and aluminum company UC Rusal PLC (0486.HK), which each own 25% of Norilsk .

Integrated Energy Systems said in a statement that carrying out its investment program is a "priority." Changes to the original investment program and its timeframe were approved by the Russian power grid's System Operator and are currently being reviewed by the Energy Ministry, the company said.

A spokeswoman for TGK-4 said the company plans to add 230 megawatts of capacity this year in the cities of Voronezh and Kursk but declined to comment directly on Putin's comments.

TGK-2 didn't complete its original investment program because it repaid debt and because a "raider" shareholder restricted its use of the proceeds of a share sale, Chairman Andrei Korolyev said in a statement.

The Micex Power Index climbed 0.4%, the most among eight sector indexes of the Micex Stock Exchange, as investors were encouraged by Putin's comments on the development of a long-term electricity capacity market.

"The approval of the long-term model of capacity market is a positive move and an important milestone for generation companies as it might improve profitability," VTB Capital analysts said.

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