Rosseti head Oleg Budargin said about this on November 17 at the meeting with the Kaliningrad region governor Nikolay Tsukanov, devoted to the discussion of the draft Integrated Program of Development of Electrical Grids in the Region for 2014-2022.

The meeting was attended by representatives of JSC Rosseti and its subsidiary JSC Yantarenergo, JSC Bank of Moscow, the Russian Private Equity Fund, the Ministry of infrastructure development, the regional service for price and tariff regulation.

Nikolay Tsukanov underlined that the development of the electrical grid complex is very important for the region and the grid company makes every effort to private reliable energy supplies to consumers, however, they are not enough. According to the governor, it is time to talk about the large scale reconstruction and construction of new grids.

"Today the regional energy grids are very old, their general depletion exceeds 70%. At the same time, consumption increases every year,' Nikolay Tsukanov said. 'We need to start reconstructing electrical grids. Today we have discussed this issue with the Bank of Moscow. A possibility of signing a three-party agreement between the region, the Rosseti subsidiary - JSC Yantarenergo and the bank was considered.'

In his turn, Oleg Budargin informed Nikolay Tsukanov of JSC Rosseti plans to develop the regional electrical grid complex. 'New and most modern electrical grids should be built in the Kaliningrad region within 5 years. The Company intends to provide consumers with reliable and affordable energy supplies. The amount of investments is assessed at 38 bn Rubles. But we cannot include these costs in the tariff,' the CEO of JSC Rosseti noted.

It is planned to attract investments from banks for these purposes.

To remove the bottlenecks the grid company intends to conduct a complete renovation of 17 substations, replacing overloaded transformers at substations of 110 kW and the energy transmission line of 110 kW, almost 36 km long. There are also plans to shift 200 km of pre-war grids with voltage of 0.23 kW (the only ones remaining in Russia) to more modern 0.4 kW standards in Kalinigrad and Chernyahovsk, modernize medium voltage systems in these large cities. Furthermore, the technological connection of technical parks and new industrial zones is planned within the framework of the integrated development program. In particular, there are plans to reconstruct more than 1.5 thousand km of lines and build about 150 km of new lines as well as ensure the output of more than 600MW to facilitate the social and economic development of the Kaliningrad Region.

Apart from this, a project was developed and will be implemented in cooperation with the Russian Private Equity Funds (RPEF), aimed at reducing grid losses associated with grid depletion and energy consumption without contracts. Smart metering devices will be installed in the region in 2 years. The project implementation will help save OSC Yantarenergo funds and channel them to the further grid modernization.

'New metering devices are the first chain in smart grids, enabling to further develop smart grids in the region,' Oleg Budargin underlined.

According to Nikolay Tsukanov, the RPEF suggested a financing option without any funds taken from regional and municipal budgets. 'This model means that they invest on their own and we regulate tariffs. We will additionally negotiate on payoff indicators but I would like to emphasise that the tariff will not be raised,' the governor noted.

The meeting also touched upon the consolidation of regional energy grid assets on the basis of Yantarenergo. According to the governor, this will enable to improve the quality of energy supplies and reduce accident rates.

Following the meeting, the integrated development program of the electrical grids of the Kaliningrad region will be updated. It is planned that the regional government will approve it till the end of this year.