Russia Announced Its Largest Renewable Power Generating Facilities Construction and Operation Tender

A tender for the construction and operation of renewable energy generating projects with a total capacity of more than 2GW, the fifth of its kind in Russia since 2013, was launched on 29 May and will run until 9 June 2017.

The tender winners will be awarded long-term contracts for the construction and commissioning of wind, solar and hydro-electricity generating facilities between 2018 and 2022. The contracts provide for a return on investment of not more than USD 2,000 per KW of installed capacity for wind and solar power facilities and an internal rate of return of 12% per year.

Last week, the Russian Government approved* a new formula for calculating the required degree of localization of wind power generating projects. Compliance with this requirement is a key condition for securing these contracts. Also, it was clarified that meeting the local content requirement can be confirmed by concluding a special investment contract.

The tender offer has reportedly generated a huge interest among potential bidders, especially foreign investors. As of 30 May, several bids for wind, solar and hydro-electricity generating facilities had been submitted to the tender commission.

Producers of equipment used on renewable power plants or companies interested in investing into this industry should bear in mind that these tenders are conducted annually in Russia and are aimed at increasing the country’s share of renewable power generation from 0 to 4.5% by 2024.

If you have any questions on the matters referred to here, do not hesitate to contact Dr. Artem Rodin.