Investments

OAO IDGC of Urals’ investment program for 2018-2022 and alterations to the Company’s investment program, introduced by the decree^[23], alterations introduced by the decree^[24], adopted by the Board of Directors on 31.03.2017^[25], were approved by the Russian Ministry of Energy^[26].

Value (capex, commissioning, funding) and physical (commissioned capacity and power line length) investing parameters of the reported period are presented in the figure below.

Key parameters of the Company’s 2017 investment program:

• Capex: RUB 6,179 million or 97% of the target;
• New fixed assets: RUB 5,790 million or 97% of the target;
• Funding: RUB 7,100 million or 98% of the target;
• Commissioning of transformer capacity: 284 MVA or 98% of the target.
• Commissioning of power lines: 1,844 km or 110% of the target;

Directions and structure of investment funding

Implementation of the investment program includes handling of the following problems:

• maintenance of operability of equipment that provides reliable, no-break and high-quality power supply;
• execution of liabilities under connection contracts;
• enforcement of security for equipment and personnel performance;
• provision of transmitting capacitance of networks for sustainable performance of the sector and connection of consumers;
• increase of anti-diversionary protection and counter-terrorist security of energy facilities.

The bulk of the 2017 funding (42%) was channeled to connection. Reconstruction, upgrade and refurbishment got almost the same amount of investments (41%). A 13% share of the total funding was spent on other investment projects (ready-to-operate devices, IT projects, etc.). Greenfield construction got only 4% of the funding.

Investment funding structure, RUB million, plus VAT

Internal resources (RUB 5,377 million or 75.7%) contribute the most to the total 2017 funding. Income from connection fees to be used as investments totaled RUB 770 million or 10.8%. Other resources contribute 13.2% or RUB 934 million. Borrowings totaled RUB 19 million or 0.3%. We have no facilities, constructed with the aid of the federal funds.

Key outcomes of our 2017 investment program

Outcomes achieved in 2017 due to activities from the investment program, as stated by the decree^[27]:

• transformer substation load targets are 100% completed;
• evaluation of changes in the share of net supply formed by meters integrated into the data collection and transmission system:
  Roll-out of metering systems on retail electricity market (0.4 kV). Upgrade/build-up of MIS	G_PE12	1.75
  Roll-out of metering systems on retail electricity market (0.2 kV). Upgrade/build-up of MIS	G_PE13	0.05
  Roll-out of metering systems on retail electricity market (6, 10 kV). Upgrade/build-up of MIS	G_PE14	0.02
  Roll-out of metering systems on retail electricity market. Upgrade/build-up of MIS (4,227 devices)	G_SE549	0.03
  Roll-out of metering systems on retail electricity market (0.4 kV). Upgrade/build-up of MIS (2017) (1,168 devices)	H_SE1139	0.01
  Roll-out of metering systems on retail electricity market (6-10 kV). Upgrade/build-up of MIS (169 devices)	G_SE553	0.02
  Roll-out of metering systems on retail electricity market (110 kV). Upgrade/build-up of MIS (4 devices)	G_SE551	0.05
  Roll-out of metering systems on retail electricity market (6-10 kV). Automation of data collection from MIS (278 devices)	H_SE554	0.45
  Roll-out of metering systems on retail electricity market (0.4-0.22 kV). Upgrade/build-up of MIS. Installation of meters with remote data collection (2017)	H_CHE1385	0.02
  Roll-out of metering systems on retail electricity market (0.4 kV). Upgrade/build-up of MIS	G_CHE11	0.01
  Roll-out of metering systems on retail electricity market (0.2 kV). Upgrade/build-up of MIS	G_CHE12	0.02
  Roll-out of metering systems on retail electricity market. Upgrade/build-up of MIS	G_CHE665	0.19
  Roll-out of metering systems on retail electricity market (6,10 kV). Upgrade/build-up of MIS (replacement of metering transformers)	G_CHE10	0.03

• total connection liabilities executed under the investment program reached 5,015 connections;
• maximum capacity of connected consumers, power generating facilities, grid facilities owned other grid operators or other entities totaled 1,169.25 MW.

Long-term investment program

OAO IDGC of Urals investment program for 2017-2022 was approved by the decree^[26] and stipulates RUB 33,922 million (plus VAT) funding, RUB 28,655 million (net of VAT) capital expenditures and RUB 29,904 million (net of VAT) commissioning. The Company’s 2018-2022 investment program is prepared with due allowances to regional development plans, equipment health, importance of grid facilities and current domestic environment.

Funding of the Company’s investment program for 2018-2022, RUB million (plus VAT).

Capital expenditures of the Company’s investment program for 2018-2022, RUB million (net of VAT).

Commissioning of the Company’s investment program for 2018-2022, RUB million (net of VAT).