The European Bank for Reconstruction and Development (EBRD) has provided Rb6.3bn (€185mn) in long-term funding to support renewable energy in Russia. The loan will finance a modernisation programme which will extend by at least 25 years the life of nine power stations of the Volga-Kama cascade, one of the country’s largest sources of hydro power.

The bank will be the lender of record for the full amount of the loan to OAO HydroOGK, a fully-owned subsidiary of the main Russian power utility RAO UES, but Rb4bn has been syndicated to nine banks under an EBRD A/B loan structure.

Co-rrangers under the B loan are: Standard Bank, Bank Austria Creditanstalt and ING Bank (Eurasia). Lead managers are: Calyon, Fortis and ZAO Raiffeisenbank Austria. Managers are: ZAO Citibank, Credit Suisse and Banque Societe Generale Vostok.

The B loan is in two tranches, with Rb3.15bn for 10 years (provided by Standard, ING, Bank Austria, Calyon and Fortis) priced at 305bp over Mosprime and Rb850mn, provided by the remaining banks, for eight years priced at 275bp over Mosprime. The EBRD A loan is for 14 years.

Once the reorganisation of HydroOGK has been completed, including through the consolidation of a large number of hydro power plants, it is due to become the largest power generating company in Russia and the world’s second biggest hydro generating company after Hydro Quebec in Canada – with an installed capacity of 23.3GW.