September 19, 2013 / 1:36 PM / 4 years ago

Russia's InterRao eyes assets in Finland, Sweden - exec

3 Min Read

* InterRao trades electricity in Nordic States

* Company eyes both generation, distribution assets - source

* No share offering over next 2-3 years

By Sven Nordenstam and Anastasia Lyrchikova

STOCKHOLM/MOSCOW, Sept 19 (Reuters) - State-controlled Russian power group InterRao is on the lookout to acquire assets in the Nordic States as it seeks to expand into a key export market, a board member told Reuters.

InterRao is a monopoly electricity exporter out of Russia, trading at the Scandinavian Nord Pool energy market, in the Baltic States and in Turkey via its units RAO Nordic, InterRao Lietuva and TGR Enerji.

Foreign generation accounts for around 18 percent of InterRao's total capacity of 33.5 gigawatt and is located in Armenia, Georgia, Kazakhstan, Lithuania, Moldavia and Turkey.

"We are now seriously studying expansion possibilities in Scandinavia... Firstly in Finland. The second are opportunities for our company in Sweden," Ilnar Mirsiyapov, member of InterRao board and head of strategy, said.

He declined to give details but a source with the company said InterRao was looking at both generation and distribution assets.

Mirsiyapov spoke to Reuters in Russian during a business trip to Sweden. His comments were cleared for publication on Thursday.

Finland is a key export market for InterRao, and used to account for around 40 percent of its foreign sales. But supplies to Finland dropped to around 20 percent of InterRao's total last year to 3.8 billion kilowatt/hour as cheaper hydroelectric power took market share.

Mirsiyapov said he hoped total export volumes would remain at 2012 levels of 18.4 billion kWh this year or slightly higher.

No Share Offering Soon

InterRao, which was planning a secondary share offering (SPO) of between $1.5 billion and $2 billion to fund its internal and international expansion, has postponed a deal for at least 2-3 years, he said.

"An SPO is needed when the company is seeking funds for further development... As of now, we don't have approved investment projects which require such money," Mirsiyapov said. He added that the company was still considering London for SPO.

InterRao, Russia's third largest power firm by capacity, was planning to place shares between 2012 and 2014, also to fund its international expansion.

It planned to increase foreign generation capacity to 10 gigawatt by 2015 but scrapped the plans a year ago to focus on the markets it is already in.

InterRao is majority-controlled by the state, with 13 percent owned by Norilsk Nickel, almost 14 percent belonging to InterRao's own unit while 18 percent is held by minorities, including the free float. (Writing by Katya Golubkova; editing by Douglas Busvine and James Jukwey)

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