Moscow, 10 May 2007. OAO "Southern Generation Company - TGC-8" has completed governance restructuring. The company determined new outline for its branches within the borders of the heat markets, approved new principles for distribution of authority and set new KPIs.

The new governance model of SGC TGC-8, which was developed in the course of the structural reform, provides for the creation of three functional divisions: the Corporate Centre, Project Centre, and Business Units. The Business Units are to be created on the basis of the TGC-8 branches and will have a broad scope of authority in their operations in the regions. The executive staff of OAO "TGC-8" will focus on the strategic tasks, such as implementation of the Company's investment projects and development of production policies.

The Corporate Centre will coordinate activities of the Business Units, produce and exercise control over implementation of the Company's business plans and repair programmes, develop the strategy for the heat and electricity markets, implement the environmental policy, and handle shareholder relations. The Project Center will coordinate implementation of the TGC-8 investment programme. According to the major investment projects, the Project Center will have three subdivisions: Directorates for New Construction of the Astrakhanskaya TPP, Astrakhanskaya CHPP-2, and Krasnodarskaya CHPP.

The greatest changes will take place in the branches of OAO "Southern Generation Company TGC-8", which will become the basis for Business Units. They will be given the authority to take decisions on day-to-day operations and will be charged with the responsibility for meeting the Key Performance Indicators set by the Corporate Center. Based on the principle "one branch within one local heat market" and the customer-focused approach, OAO "SGC TGC-8" will create another four branches in addition to the existing eight,-Volgogradskaya CHPP-3, Kamyshinskaya Generatsiya, Volzhskaya Generatsiya, and Kamenskaya CHPP.

The Company's new organizational structure is based on the model successfully implemented in 2004 in the Parent Company, RAO "UES of Russia".