Renaissance-Macquarie fund in Russian power deal

A Russian infrastructure fund joint-owned by Renaissance Capital and Australia's Macquarie has made an $83 million investment in power group GSR Energy Investments - its second deal since its formation in 2008.

The fund, the biggest dedicated to Russian infrastructure with $630m under management, has now invested more than $200m in transport and power assets.

The completion of the deal confirms a Reuters report last month that the fund was close to deals in both the power and airport sectors.

Russia needs to replace swathes of crumbling Soviet-era infrastructure to support the movement of people and goods across the vast country, as well as prepare for the Winter Olympics in 2014 and the soccer World Cup four years later.

And power industry experts estimate some $400 billion to $500bn needs to be spent modernising Russian equipment in order to prevent blackouts and accidents such as the Sayano-Shushenskaya power plant explosion that killed 65 people in 2009.

GSR Energy supplies heat and electricity to industrial customers in the Kolpino industrial region of St Petersburg, the Macquarie-Renaissance Infrastructure Fund (MRIF) said in a statement.

"GSR's stable regulated revenues, coupled with an excellent growth profile due to the current expansion of the Kolpino industrial zone, make this investment particularly attractive for MRIF," chief executive Damian Secen said.

He added that the investment would help GSR build new capacity, but declined to comment on how much of GSR it bought with the investment.

MRIF sees opportunities in the rail and air transport sectors, as well as power generation and distribution.

Its only other deal was a $125m investment in private railcar group Brunswick Rail in 2010, as the pace of distributing the fund has been held back by the 2008/2009 economic crisis.