Moscow. 30 August 2006. The Board of Directors considered a number of questions on reorganization of OAO RAO "UES of Russia" through spin-off of two generation companies.

Pursuant to RAO "UES of Russia" Board of Directors resolution dated 28 July 2006, the reorganization of OAO RAO "UES of Russia" will be implemented in two phases. WGC-5 and TGC-5 will be spun off from RAO "UES of Russia" during the first phase in 2006-2007.

During the second phase in 2007-2008, RAO "UES of Russia" will be separated, and the shareholders of RAO "UES of Russia" Parent Company will receive its shares in target companies of the sector (WGCs, TGCs, FGC, etc.) pro rata to their holdings in the authorized capital of RAO "UES of Russia".

The peculiarity of the first stage of reorganization is that is it will be carried out through spin-off of two "transitional" companies – OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" – from RAO "UES of Russia" Parent Company. Stakes held by RAO "UES of Russia" in WGC-5 and TGC-5 will be transferred to these two companies respectively. In-parallel with the spin-off process, in accordance with the Federal Law of the Russian Federation on Joint Stock Companies, OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" will merger with WGC-5 and TGC-5 respectively.

The selection of WGC-5 and TGC-5 to spin off during the first phase is mostly explained by the fact that the formation of these two thermal generation companies has been fully completed and they are ready for full-scale independent operation including implementation of potential investment projects.

The decision on the first phase of reorganization is within cognizance of RAO "UES of Russia" General Shareholders Meeting.

The decision to convene an extraordinary General Shareholders Meeting and define the price of shares that the shareholders may offer for buy-back will be taken when Directors Board members, representing the State, receive instructions to vote on these agenda items.

Taking in consideration the timetable of corporate procedures, the Board of Directors resolved that the extraordinary General Shareholders Meeting may be held on 30 November 2006 by way of postal vote. The shareholders are to send the voting bulletins to ZAO "Status Registration Company" (1/64 Dobrovolcheskaya Str., 109544, Moscow, Russia) by 30 November 2006.

The list of persons entitled under the laws of the Russian Federation to take part in the Meeting will be made as at 2 October 2006. In accordance with the Board of Directors' resolution, type A preferred shares owners will have rights to vote on reorganization related agenda items.

The Board of Directors also considered the form and text of message to the shareholders on convening the extraordinary General Shareholders Meeting as well as materials to the Meeting including substantiation of conditions and course of RAO "UES of Russia" restructuring. All these documents are also to be approved by the Board of Directors by way of postal vote.

The agenda of the extraordinary General Shareholders Meeting will include the following items:

1. Reorganization of RAO "UES of Russia" through spin-off of OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company";
2. Election of members for OAO "WGC-5 Holding Company" Board of Directors;
3. Election of members for OAO "TGC-5 Holding Company" Board of Directors;
4. Reorganization of OAO "WGC-5 Holding Company" through merger with OAO "WGC-5";
5. Reorganization of OAO "TGC-5 Holding Company" through merger with OAO "TGC-5";
6. Approval of amendments and additions to the Charter of RAO "UES of Russia";
7. Approval of the transaction (associated transactions) regarding the purchase of additional shares of OAO "FGC UES" by RAO "UES of Russia", which is an interested-party transaction.

The Board of Directors recommended the extraordinary General Shareholders Meeting of RAO "UES of Russia" to approve the reorganization of the company through spin-off of OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" simultaneously with merger with WGC-5 and TGC-5 respectively.

The Board of Directors resolved that RAO "UES of Russia" shareholders who totally hold two and more percent of ordinary shares of the company have rights to submit proposals regarding candidates for Boards of Directors, auditing commissions, and sole executive bodies of OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company".

The Board of Directors also instructed its representatives in WGC-5 and TGC-5 Management to approve all necessary corporate procedures for reorganization through merger with OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" respectively.

The distribution of shares during the spin-off process will be based on the following principle:

One ordinary OAO "WGC-5 Holding Company" share with nominal value of 0.148455449093326 rubles per share and one ordinary OAO "TGC-5 Holding Company" share with nominal value of 0.0198622257264326 rubles per share should be distributed for one ordinary RAO "UES of Russia" share. One preferred OAO "WGC-5 Holding Company" share with nominal value of 0.148455449093326 rubles per share and one preferred OAO "TGC-5 Holding Company" share with nominal value of 0.0198622257264326 rubles per share should be distributed for one type A preferred RAO "UES of Russia" share.

A RAO "UES of Russia" shareholder who won't participate in voting or will vote against the reorganization has the right to receive shares of OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" of the same quantity and granting the same right as those he holds in RAO "UES of Russia".

Besides such a shareholder will have rights to claim buy-back of all shares or a part of shares what is additional assurance of shareholders' rights observation during the company's reorganization.

The shares are to be bought back at a price defined by the RAO "UES of Russia" Board of Directors in accordance with the Federal Law of the Russian Federation on Joint Stock Companies and based on the report of Deloitte&Touche independent appraiser. The independent evaluation of shares price was conducted by Deloitte&Touche as at 1 April 2006 and is 16,41 rubles for one ordinary and 14,54 rubles one type A preferred RAO "UES of Russia" share.

The total amount of OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" shares of the respective category is equal to the total amount of RAO "UES of Russia" shares of the respective category and is 43 116 903 368 shares including 41 041 753 984 ordinary and 2 075 149 384 preferred shares.

The authorized capital of OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" is defined by summing up total amount of ordinary and preferred shares of these two companies multiplied by the nominal value of one share of each category and is 6 400 939 253,01 rubles and 856 397 667,32 rubles respectively.

OAO "WGC-5 Holding Company" and OAO "TGC-5 Holding Company" will merger with WGC-5 and TGC-5 respectively through conversion of the Holding Companies' shares into the shares of WGC-5 and TGC-5 with the following ratios:

• an ordinary OAO "WGC-5 Holding Company" share is to be converted into 0,41 of ordinary OAO "WGC-5" share;
• a preferred OAO "WGC-5 Holding Company" share is to be converted into 0,377 of preferred OAO "WGC-5" share;
• an ordinary OAO "TGC-5 Holding Company" share is to be converted into 13.595 of ordinary OAO "TGC-5" share;
• a preferred OAO "TGC-5 Holding Company" share is to be converted into 12.450 of preferred OAO "TGC-5" share.

Hence all RAO "UES of Russia" shareholders will have shares in WGC-5 and TGC-5 as the result of the first phase of the reorganization. If the rounding during the conversion suggests that a shareholder is to have less than a share, they receive one share. At that the rounding is fulfilled by means of additional shares of these companies, which are not to exceed 1 000 000 pcs.

The agenda of the extraordinary General Shareholders Meeting will include the item to introduce amendments and additions to the Charter of RAO "UES of Russia". It is explained by the possibility that RAO "UES of Russia" in 2006 will have money-unbacked "paper" profit as the result of financial investments revaluation. The revaluation is imposed by the RAS regulations. Pursuant to Article 5 of RAO "UES of Russia" Charter, the amount of dividends to be paid on preferred shares is 10% of financial year net profit divided by a number of shares, which make up 25% of RAO "UES of Russia" authorized capital. However in this case the profit given in the financial statement as the result of financial investments revaluation won't be backed by funds.

Otherwise RAO "UES of Russia" balancing 2006 financial year will have to pay dividends on preferred shares by means either from funds withdrawn from commerce or loans.

The Board of Directors recommended the shareholders to consider introduction of amendments to the Charter of RAO "UES of Russia", which allow not to take into account the "paper" profit while calculating the base for dividends payment. The amount of dividends payment is to depend on the net profit volume exclusively of financial investments revaluation conducted in the previous financial year.

Pursuant to Item 4 of Article 32 of the Federal Law of the Russian Federation on Joint Stock Companies, this decision will be taken by the extraordinary General Shareholders Meeting if it is simultaneously backed by no less than ? of ordinary share holders taking part in the meeting and no less than ? of all shareholders who have preferred shares.

Besides the Board of Directors considered procedures on coordination with owners of depositary receipts during the first phase of reorganization.