Hydro-OGK to Combine 50 Power Plants

Hydroelectric power generator Hydro-OGK will unite 21 separate firms and around 50 power stations, including one part-owned by Gazprom, when it floats shares in 2008, the company said Thursday.

Hydro-OGK board member Vasily Zubakin said the Zagorsk hydroelectric power station, of which gas monopoly Gazprom owns about 30 percent, had agreed after protracted talks to join the structure that will generate one-fifth of the country's electricity.

A source close to Hydro-OGK said Gazprom had been unhappy with the Zagorsk generator's valuation and the fact that its stake would be illiquid while details of Hydro-OGK's consolidation were worked out.

Hydro-OGK expects to complete the legal process to consolidate most of the generating subsidiaries, including Zagorsk, by January.

Two other firms, the Irganaiskaya and Kaskad power stations, would be integrated by June, the company said in a statement.

The resulting company would have total generating capacity of about 24 gigawatts, making Hydro-OGK the biggest producer of renewable energy in Europe and second in the world only to Canadian state-controlled Hydro-Quebec.