Investment Financial Company METROPOL acted as partner of The Central and Eastern European Forum that took place 17-18 January this year in Vienna, Austria. 
Every January this forum brings together the heads of governments and central banks of CEE countries, leading world economy experts, Russian and European institutional investors to discuss most relevant questions and issues of economic development of Central and Eastern Europe, Russia and CIS countries and to determine key lines of activity for the year ahead.
Within the framework of the official Forum program, 17 January IFC METROPOL organized round table “Attracting Investments to the Russian Energy Sector”. “The selection of the workshop subject was by no means occasional, - emphasized Arthur Plaude, Managing Director of Department for Debt Instruments and Derivatives of IFC METROPOL. – Over the few past years, we have participated, as organizer and co-organizer, in issues of bonds of leading Russian energy companies, we are the market maker and leading operator of the bond market of energy industry companies”.
IFC METROPOL invited its partners – representatives of Russia’s leading energy companies – to take part in the discussion. Session speakers were Viktor Kudryavy , member of the Board of Directors of  RusHydro and MRSC, Deputy Minister of Energy of the RF in 1996 – 2000, Maria Merzlikina, Deputy Head of Corporate Finance Department of UES Federal Grid Company, Roman Ponkrashchenkov, Head of Treasury of Sibir Generating Company MC, and Alexey Rodzyanko, Chief Executive Officer of IFC METROPOL Pyotr Kadysh, Head of Division for Analysis of Debt Instruments and Derivatives of IFC METROPOL acted as the round table’s moderator.
Opening the panel discussion,   Kadysh characterized the current condition of the Russian power industry, stressing the necessity to make capital investments in the industry. V. Kudryavy noted that within the nearest 10 years, approximately 150 billion Euros will be needed for development of the power generating sector, and about 110 billion Euros – for development of the national power distribution network. Whereas formerly Russian power companies were facing the task of preventing ageing of fixed assets, at present, commissioning of new facilities is vital. A rise in power supply rates can support fixed assets, but to ensure output capacity gains, other financing vehicles are needed, many of which have not been developed to a full measure in Russia yet. Attractive facilities can be long-term bank loans, project financing and bond issue. A crucial factor is interest of European investors and support of financial consultants, who are able to help energy companies to raise funds for capital investments.  Russian power generating companies are, on the whole, attractive for investors, because they enjoy state support. Regulating mechanisms supporting the high credit worthiness of Russian power generating companies were discussed by representatives of both generating and distributing companies.
R. Ponkrashchenkov spoke about the system of power supply allotment agreements, a mechanism that will allow Russian energy companies to bring back investments in construction of new generating facilities. In compliance with this system, actually, consumers will be paying by instalments for the construction of new power-generating units, the output of which they are about to consume. The payback period for such investment projects is on average 15 years, but generating companies hope to reduce the payback period by cutting their costs.  Cost effectiveness will be also achieved through commissioning new facilities ahead of the schedule. According to R. Ponkrashchenkov, participation in this scheme will be very beneficial for Russian generating companies.
M. Merzlikina of UES FGC noted that implementation of tariff regulation using the RAB methods makes the basis for the power grid companies to attract investments. Application of this mechanism makes it possible to ensure stable cash flows and guarantees repayment of borrowings raised by energy companies on a large scale. Even under the recession conditions, companies are realizing investment programs and searching for new sources of funding in order to attract investors in debt securities.
Summing up the discussion, Rodzyanko said that, in spite of its dependency on external market environment, the Russian economy should feel well in the new year, for the high oil prices have ensured budget surplus for the country in 2011. He expressed hope that Russian companies, including energy entities, will not stop in their implementation of capital investment programmes and will be able to attract long-term capital, both Russian and foreign, at relatively low costs. 
Rodzyanko: “We have seen substantial interest in the topic of our discussion among the forum participants. I believe that   interest therein will be only growing as time goes by: vital infrastructural changes are coming that would  pave the way for offerings of Russian energy debt securities to the international investment community; via the Euroclear system, foreign investors will be able to directly purchase rouble bonds issued by domestic energy companies”.
The prospects of investments in the Russian energy industry discussed during the round table were appreciated personally by investors invited by IFC METROPOL to the conference – Ya. Petrov, Head of Zenit Portfolio Managers MC, D. Yeroshkevich, Managing Director of Inter Broker, A. Nosarev, Manager of assets of Portfolio Investments MC, etc.
On the second day of the forum, 18 December, Russia session was held, with Alexey Rodzyanko as one of the speakers. The speakers discussed economic conditions of making investments in Russia and concurred that no substantial deterioration was observed: corporate balance sheets of Russian companies were quite stable, and sources of financing were reliable.
Guests of IFC METROPOL highly appreciated the company initiative for organization of the round table and the trip as a whole.
As V. Kudryavy  said, he completely supported the METROPOL initiative for attracting European investors’ attention to the Russian energy sector and considered it to be vital and well-timed:“Company specialists know the state of affairs in the industry very well. I believe that through joint efforts we have managed to demonstrate that the industry is very attractive for investors, due to both the state support and the structural changes that are under way. I hope, this round table will become a tradition and turn into a permanent forum for joint work of Russian power companies, domestic and foreign investors and financiers”.
R. Ponkrashchenkov noted: “I liked the conference. A very informative event. It is encouraging that nobody loses optimism in the crisis situation. Europeans are confident that the current problems, however serious, are curable.  It is obvious that they have “medications” in stock… Hopefully, European problems will not materially affect our country. I share the optimistic point of view that Russia will be growing in 2012. Apart from the very conference, I enjoyed the atmosphere in the team brought together by METROPOL. Thank you very much for the invitation!”
M. Merzlikina summed it up as follows: “I liked the conference very much – first and foremost, because of its business-like atmosphere that the organisers managed to create and the high professional level of the discussions”.

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