Deputy Prime Minister Arkady Dvorkovich, quoted yesterday by Interfax, has said that the energy market model, which includes both the wholesale and retail markets, is to be updated by 1H13. According to him, the existing model does not create enough stimulus to raise new private investments in the sector (both gencos and grids). The draft of the new model is to be produced by the end of this year and might come into effect as of 2014.
We welcome any changes to the existing regulation in the sector that could improve its competitiveness and attractiveness to investors. Thus, the new initiative might be welcomed by investors, although more details are needed to assess the potential impact. At the same time, after almost ten years of reforms, we believe the sector could do with several years of stability with no radical changes to the regulatory approach.
Mikhail Rasstrigin, Alexander Seleznev
VTB Capital analyst
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