Enel Plans a Vertically Integrated Power Company in Russia

Excerpt from Russian Petroleum Investor by Sergei Chernyshov and Andrei Shlyapnikov

Having carried out in 2007 unprecedented purchase transactions of Russian natural gas production and electricity generating assets, the Italian company Enel has declared plans to use these assets as a foundation for a vertically integrated power company. This is a very bold move for a foreign enterprise during a period of scale transformations in the Russian energy sector. Enel's success will depend on negotiations with Gazprom, along with its own generosity and flexibility. To other foreign companies, such as E.ON, Fortum, RWE, Gaz de France and others, that have or are planning to purchase electrical power assets in Russia, the Enel example will indicate what is possible in the Russian market.

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