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MOSCOW MILLS — Russia's state-run gas giant Gazprom said Friday it will ask the government for 100 billion rubles ($3.58 billion) to help fund capital-intensive power projects next year, the state-run RIA-Novosti news agency reported.
The bulk of the money is needed to fund the development of TGK-1, a power utility in the northwest of Russia, Gazprom deputy chairman Valery Golubev was cited as saying in St. Petersburg.
Russia recently completed an ambitious privatization of its power assets, which obliged buyers such as Gazprom to meet specific investment targets to upgrade the country's creaking power sector.
But as the global financial crisis deepened, companies such as Gazprom have found it difficult to raise money and have argued that power demand has grown at a slower rate than originally projected. Some have asked the government to postpone a part of their investment commitments.
"This is a federal program. It was initially planned that it would be funded by electricity companies, but the amount of money needed is so high that they have been unable to raise the funds," Golubev was quoted as saying.
Golubev said the company would continue to seek alternative ways to raise the money in case its request to the government is turned down.
Meanwhile, Gazprom also said it planned to cut gas production this year by 3 percent because of a mild winter so far and a fall in industrial demand.
Gazprom holds controlling interests in utilities OGK-2, OGK-6 and Mosenergo, and a major stake in TGK-1.
