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September 22, 2008

VII International Investment Forum Sochi-2008

The VIIth International Investment Forum Sochi-2008 was held in Sochi on 18‑20 September. The Republic of Dagestan presentation was one of the most impressive: over 60 investment projects were presented, the most promising including two hydro-electric projects:

Construction of small HPPs using the Prometheus technology.

Construction of the Cascade of Andiiskaya HPPs;

Dagestan already has over 10 HPPs, the smallest with a capacity of 270 kW and the biggest – 1,000,000 kW, but only a small portion of its hydro-electric potential has been tapped. The capacity of Dagestan’s rivers is assessed at 55 billion kW, whereas, so far, only 10% has been utilized. The remaining reserves and possibilities are great and their use is a strategic area of our activities, above all investments.

On the one hand, construction of small HPPs is a new business in the hydro-electric power industry. On the other hand, in the 1930s-40s, quite a few small HPPs were built in Dagestan, though construction of big and medium-sized power stations later took over and small ones were undeservedly forgotten. This mistake is now being put right and Dagestan has once more become, to some extent, a pioneer in this sphere.

The main advantage of building small HPPs is that they can be erected in close proximity to the consumer and do not require large stocks of water, this making it possible to save on constructing grids and to avoid loses during electric power transmission. Such a small power station can provide power to several villages.

The investment project “Construction of Small HPPs according to the Prometheus Technology” involves construction of 11 facilities in different parts of Dagestan – in the Rutulstsky, Akhtynsky and Charadinsky districts.

Andiiskoye Koisu is a unique canyon, very convenient for building a hydro-electric power plant, making it possible to avoid inundating agricultural land, which is particularly important in a mountainous area. The building site for the cascade of HPPs is on the flood plain of the River Andiiskoye Koisu, an uneven, mountainous area without buildings or farmed land. In all, the Cascade of Andiiskiye HPPs includes five power stations:

·   Agvalinskaya

·   Tsumadinskaya

·   Botlikhskaya

·   Inchoiskaya

·   Tantariiskaya

Their aggregate installed capacity will be 520 MW, and the average multiyear electric power output will be 2.22 billion kWh. Investment of 22.48 billion roubles, exclusive of VAT, will be needed for construction. The pay-back period of this investment project will be 11 years.

As to the social effect of building the cascade, it is planned to create a total of 3,00-4,500 jobs during the construction period at all the five facilities.

The smallest of the 5 plants in capacity terms will be the Agvalinskaya HPP, with an eventual capacity of 200 MW and an annual electric power output of 980 million kWh. It is to be built on the flood plain of the River Andiiskoye Koisu in the vicinity of the village of Echeda in the Tsumadinsky District. Own and raised funds will amount to 10 billion roubles less VAT. The main structures of the HPP will include a concrete, arched dam 210 metres high, a number of hydro-engineering buildings and structures, a dam-side building of the HPP with 4 hydraulic units with a capacity of 50 MW each.

The other 4 HPPs have the identical parameters: they will all have 4 units of 20 MW each. Own and raised funds will vary between 3 and 3.3 billion roubles.

The Director of the Dagestan subsidiary of JSC RusHydro, Timur Gamzatov, commented thus on the prospects for the projects presented at this year’s Sochi forum: In recent years, the national economy of Dagestan has been finding its way out of a crisis and requires increased electric power output. Construction of small and medium-sized HPPs will undoubtedly promote growth of the population’s well-being in rural localities and in remote mountainous areas; moreover, construction of hydropower facilities will help create new jobs in the mountainous areas of Dagestan where there is still a high level of unemployment, especially among young people. So these 2 projects have major prospects.




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