"Default Scenario": Energy Companies Scale Back Investment Programs in Siberia
**"Rosseti Sibir," operating in Krasnoyarsk Krai, has announced a pause in their plans for the 2025 investment program due to inadequate tariffs and the inability to secure external funding.
The largest power network company in the region, "Rosseti Sibir," is experiencing a tough time, facing a crucial question about the possibility of fulfilling its obligations, particularly its credit debt, according to TASS, citing the company's statement.
Energy specialists are urging for an immediate solution to the primary issue - "preventing the development of a negative scenario, which potentially could lead to the company's bankruptcy."
The company acknowledges that the situation is particularly dire in Krasnoyarsk Krai, Zabaikal Krai, Khakassia, and Buryatia, due to the fact that tariffs do not account for the actual costs borne by network organizations. Meanwhile, the cost of equipment, materials, labor, and other expenses continue to rise.
Energy specialists have emphasized that by the end of 2024, 7.7 billion rubles were allocated for investment programs in four regions, a significant portion of which was covered by new credits. However, this amount is significantly below the required financing for addressing the problems.
One of the major issues is the technological connection to the grids.
In "Krasnoyarskenergo," for instance, over 8 billion rubles are needed to implement all connection agreements, while only a billion is available.
Due to "unprecedented debt burden," "Rosseti Sibir" cannot attract external financing in 2025.
Tariffs are grossly disproportionate to actual expenses, which results in "the inability to resolve issues related to improving energy supply quality and timely fulfillment of obligations for subsidized technology connection," energy specialists note.
It's worth mentioning that the severe problem is being discussed on a federal level: the situation with energy supply in several regions of the Siberian Federal District is being evaluated as pre-crisis.
Photo: "Rosseti Sibir"
Insights:
- Utilities like Rosseti Sibir may face financial challenges due to insufficient tariffs, lack of external funding, and unfavorable regulatory and market conditions.
- Large-scale investment programs require significant funding, and if they are not adequately funded, they may not be completed, leading to further financial strain.
- The regulatory environment and market conditions can impact a company's financial health, and changes in regulations or market dynamics can affect a company's ability to operate profitably."
- In the light of the financial predicament, energy specialists are urging for a reevaluation of tariffs in the industry to better align with actual costs borne by network organizations, as the current tariffs hinder efforts to improve energy supply quality and fulfill obligations.
- Given the current financial crisis, it is crucial for the finance ministry to prioritize addressing the funding gap for investment programs in the energy sector, particularly in regions like Krasnoyarsk Krai, Zabaikal Krai, Khakassia, and Buryatia, to prevent the potential bankruptcy of companies and ensure energy security and industry growth.
