Jan. 31 (Bloomberg) — OAO RusHydro, Russia’s biggest renewable energy producer, has proposed creating a holding company to modernize water and sewage systems.

“The main goal is to make the water and sewage systems safe, to supply people uninterruptedly with drinking water of quality,” Yelena Vishnyakova, a RusHydro spokeswoman, said today by e-mail. Russia’s water system needs modernization as 55 percent of the infrastructure has surpassed its service life, according to the regional development ministry’s website.

Russia’s government is considering the matter and will submit final recommendations on RusHydro’s water proposal to President Vladimir Putin by Feb. 10, Vishnyakova said.

State-run RusHydro dropped 2.5 percent today on the Micex, the most since Nov. 8, on more than twice the average daily three-month trading volume. VTB Capital cut RusHydro shares to sell, saying the proposal raises risks of new spending and may reduce dividends, according to an e-mailed note.

To contact the reporters on this story: Stepan Kravchenko in Moscow at skravchenko@bloomberg.net; Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net