Substantial Financial Aid Received from Government bodies
Government subsidies of MRSK Holding in 2012 accounted for only 0.03% of total revenue (160 million rubles), which is 34.16% less than in 2011.
The Russian Federation, as the principal shareholder of the Company, participates in financing SDCs’ capital investment programs by means of contributing cash to the Company’s authorized capital, with a view to subsequently transferring the received cash to the authorized capital of the relevant SDCs.
In 2012, the funds received from the federal budget into the Company’s authorized capital were used to finance the following programs and projects:
- program of preparations for the XXII Olympic Winter Games and the XI Paralympic Winter Games in Sochi in 2014 and the development of Sochi as a mountain resort
- program of measures to renew 6–110 kV cable lines in Saint Petersburg
- comprehensive program of measures to reduce above-average electricity losses in distribution networks in the North Caucasus
MRSK Holding participates in implementing the program of preparations for the XXII Olympic Winter Games and the XI Paralympic Winter Games in Sochi in 2014 and the development of Sochi as a mountain resort. Under this program, approved by Resolution of the Government of the Russian Federation No. 991 of December 29, 2007, the Company is building power facilities. The capital investments projects for Sochi are primarily financed from the federal budget, and federal budget funds are to be contributed to the Company’s authorized capital for subsequent transfer to the authorized capital of Kubanenergo. Under Federal Act No. 371-FZ of November 30, 2011, On the Federal Budget for 2012 and the Planning Period of 2013 and 2014 (as amended by Federal Act No. 247-FZ of December 3, 2012), an amount 14,707,079,000 rubles was contributed to the Company’s authorized capital in 2012.
The Federal Act on the 2012 budget specified 5,044,000,000 rubles of budget funds to be used as a contribution to the Company’s authorized capital to finance the program of measures to renew 6–110 kV cable lines in Saint Petersburg and the comprehensive program of measures to reduce above-average electricity losses in distribution networks in the North Caucasus. It is planned to channel the received funds into the subsidiaries responsible for the implementation of the programs.
TABLE 12. MRSK HOLDING’S PROGRAMS INVOLVING THE USE OF FEDERAL BUDGET FUNDS
| Implementing Entity | Program |
2012 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Capital Investment, million rubles | Commissioned Fixed Assets, million rubles | Financing, million rubles, inclusive of VAT | MVA | Kilometers | |||||||
| Planned | Actual | Planned | Actual | Planned | Actual | Planned | Actual | Planned | Actual | ||
| Kubanenergo | Construction of Olympic Games Sites | ||||||||||
| LENENERGO | Renewal of Cable Lines of 6–110 kV | – | – | ||||||||
| IDGC of Siberia | External electricity supply to the Raspadskaya Mine | – | – | – | – | – | – | – | – | ||
| IDGC of Northern Caucasus | Comprehensive program of measures to reduce above-average electricity losses in distribution networks in the Republic of Dagestan, the Republic of Ingushetia, and the Chechen Republic | – | – | – | – | – | – | – | – | ||