But two years after its approval, the plan, which would supply Crimea's residents with power they once got from Ukraine, has been knocked off course by an obstacle thrown up by the same sanctions, four sources familiar with the plans told Reuters, Censor.NET reports.
The plants were designed to house gas turbines made by a unit of Siemens. But the German engineering firm risks violating sanctions if it delivers them. With no turbines, the project faces delays, the sources said. Siemens officials have always said there were no plans to supply the turbines.
Russia explored buying turbines from Iran, changing the design to accommodate Russian-made turbines and using Western-designed turbines already in Russia. Each alternative had problems, the sources said, leaving officials and managers unable to agree on how to move forward.
The saga shows that the sanctions are having a real impact on Russia, despite official protestations. It also shines a light on decision-making under President Vladimir Putin and the tendency, according to people close to the Kremlin, to make grand political promises that are near-impossible to implement.
"The power stations were designed for Siemens turbines," said Alexei Chaliy, a Crimea lawmaker who in 2014 was one of the two most senior local officials under Moscow's de facto rule.
"In 2014 I warned there would be problems. Over the past 20 years, Russia has lost the ability to produce turbines of that capacity. And so it ended badly."
"They have started to build the power stations... but there are no turbines."
A Reuters reporter visiting the site of one of the two new power stations, near the city of Sevastopol, in February and March, saw the metal frames of several structures already erected, and cranes and dozens of workers building the main hall for the turbines.
The Kremlin said it wanted the power stations partially operational by September and fully operational by March 2018. That is the anniversary of the Crimean annexation and the month when Russia votes in a presidential election. Putin is expected to run for a new term.
"The timetable is going to slip, that's totally certain," the person said.
Russia's energy ministry did not respond to a written request for comment.
Read more: Ukrenerho halts power supply to uncontrolled territory of Luhansk region, - CEO Kovalchuk
In 2014, the European Union, the United States and several other countries imposed sanctions against Russia following its occupation of Crimea and aggression in eastern Ukraine. These restrictive measures were repeatedly extended and expanded. In particular, the talks on visa waiver and a new basic agreement on cooperation were suspended; several Russia's officials were banned to travel to the EU while their assets were attached. Trade, financial, and military restrictions were introduced.
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