Company at a Glance
IDGC of Centre is the leading power grid company in Russia. We carry on business in 11 regions of Central Russia and supply electricity to the public, major industrial companies, transport and agricultural enterprises and social facilities, and connect new consumers to the power grids.
The Company was formed in 2004 under the reform of the Russian energy sector and the division of power companies according to the nature of their operations and their subsequent interregional connection. Today IDGC of Centre is one of 11 interregional grid companies.
The Company operates in the regions with prospects of steady economic growth, which is an undisputable advantage against competitors. The client portfolio includes such companies as Oskol Electrometallurgical Works, NLMK, Mikhailovsky Mining and Refining Works and several other enterprises of strategic significance.
The Company’s mission is to ensure reliable and quality energy supply to meet the growing needs of the economy and social sector at tariffs that are economically justifiable for the services provided
are included in the corporate structure of IDGC of Centre
share of JSC Russian Grids1 in IDGC of Centre charter capital
Starting from day one, the Company is striving to operate in accordance with its mission and expectations of the major market participants:
- as far as investors are concerned, the Company is an investment instrument aimed at ensuring the return, security, profitability and liquidity of investments;
- as far as consumers are concerned we are the Company that provides high quality services, secure power delivery, modern and transparent technological connection to power grids;
- as far as the regions and local authorities are concerned, the Company satisfies business demand for power transmission; it is a reliable partner of the Russian territorial units’ governments when it comes to planning and implementing regional programs of local development, an honest taxpayer and employer;
- as far as the Company’s employees are concerned, the Company is a responsible employer and an efficiently organized business with a transparent and clear corporate management system, which allows employees to uncover their potential.
The corporate structure of IDGC of Centre includes eleven branches located in the Belgorod, Bryansk, Voronezh, Kostroma, Kursk, Lipetsk, Orel, Smolensk, Tver, Tambov and Yaroslavl Regions. IDGC of Centre Group consists of five companies: JSC Yargorelektroset, JSC Yaroslavl Power Grid Company (JSC YarESK) and CJSC Innovation and Energy efficiency Centre in Yaroslavl (JSC TSIEEF), JSC Energetik in Tambov and JSC Energy Service Company in Lipetsk.
GROUP BUSINESS STRUCTURE OF IDGC OF CENTRE:
JSC Russian Grids1 is the controlling shareholder in the Company with 50.23% of IDGC of Centre charter capital.
The services of power transmission and distribution in the regions where IDGC of Centre operates are rendered by other territorial grid companies (TGC) as well. Nevertheless, IDGC of Centre is the leading service provider as far as service volumes are concerned, and all Company branches dominate in their regions. Thus, it is safe to say that no competition exists in the areas where the Company operates. However, major TGC providing similar services should be pointed out.
IDGC of Centre controls 83.4% of the power transmission market in monetary terms in the regions in which its 11 branches operate, and 84.3% including JSC Yargorelektroset. Furthermore, the Company leads other interregional distribution grid companies in terms of revenue received from power transmission services.
We estimate that IDGC of Centre controls 87.2% of the market for grid connection, with 100% of this market in Belgorod and Kostroma regions, and 99% in Smolensk region. All other branches compete with other territorial grid companies providing similar services in grid connection.
In 2013, IDGC of Centre acquired the status of a supplier of last resort in the several regions, namely in the Bryansk, Kursk, Orel, Tver and Smolensk Regions. The resolution was passed by the Russian Ministry of Energy after revoking the wholesaler status of several power supplying companies that used to operate in the aforementioned regions. The Company’s “taking over” the functions of a supplier of last resort encompassed several steps, and we have successfully carried out a set of organizational measures.
Acting as a supplier of last resort allowed us to increase the Company’s operating income by the end of 2013.
Besides core operations, IDGC of Centre has successfully been carrying out additional operations and extending the portfolio of its services for several years. Additional services rendered by the Company today is a separate business process aimed at designing, constructing, maintaining and repairing power facilities, which allows the customers to receive a full spectrum of services and the Company to obtain extra income due the fact that all the services are being rendered on a commercial basis.