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Wärtsilä to Deliver First Privately-financed Municipality IPP to Russia

Posted on July 13, 2006

Wärtsilä Corporation was awarded a contract to deliver a 17 MW CHP plant to the city of Eisk in southern Russia. The plant, which consists of two Wärtsilä 20V34SG gas engine driven generating sets with heat recovery systems, is to be delivered in spring 2007. Wärtsilä’s share of the contract is valued at more than US$12.7 million. The plant is also the first customized commercially operating pilot power plant optimized by Wärtsilä for Russian municipalities.

After more than three years of development with Russian investors and financial institutions, OOO Eisk TES was able to secure the necessary financing from Russia. This is a remarkable step for Russian municipalities, proving that it is possible to obtain private investment for their power production.

For more than twelve years, Russian government investments into the power sector have mainly focused on grid maintenance and capacity replacement for large centralized power plants. These investments have not included smaller municipalities and consequently, they have been unable to upgrade their power and heating systems.

In order to speed up the refurbishment of the power sector, the Russian government is currently promoting private investment into the power industry. The Eisk plant serves as a sign of this new policy in that it is the first Russian privately financed and privately owned combined heating and power plant to be built. The town will buy all its electricity and district heating from the plant.

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