JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on October 28, 2014.

***

The Board of Directors commissioned RusHydro’s representatives in the governing body of CJSC Yakutskaya TPP-2 to approve an agreement for long-term service of four gas-turbine power units of the Yakutskaya TPP-2 (1st stage) between CJSC Yakutskaya TPP-2 and consortium of GE Energy Europe B.V. and GE Rus LLC, qualified as major transaction.

***

The Board of Directors approved an agreement between RusHydro and Administration of Talakan settlement located in Amur region on gratuitous transfer of property. According to the agreement RusHydro transfers to municipal property of Talakan settlement non-residential facility located near the Company’s Bureyskaya HPP.

The Board of Directors approved an agreement on gratuitous transfer of property between RusHydro and the Ministry of the state property management of the Republic of Dagestan. According to the agreement RusHydro transfers to municipal property of the Republic of Dagestan a 12,210 m length road constructed for the Irganaisky hydropower complex’s needs.

The Board of Directors approved a sale and purchase agreement between RusHydro and FSK UES, qualified as interested party transaction.

According to the agreement FSK UES will transfer to RusHydro project documentation for extension of 500 kV switchgear and 500 kV shunt reactor of the Zeyskaya HPP. The price of property had been determined by an independent appraiser based on the market price and included in RusHydro’s investment program.

The Board of Directors approved a lease agreement between RusHydro and FSK UES, qualified as interested party transaction.

According to the agreement RusHydro conveys parts of hydropower facilities of the Zhigulevskaya HPP for a temporarily possession and use of FSK UES in order to place 220 kV and 500 kV power transmission lines towers.

The Board of Directors approved an agreement between RusHydro and Lenhydroproject, qualified as interested party transaction.

The agreement provides for development of project documentation for comprehensive reconstruction of HPPs of RusHydro’s Dagestan branch (Chirkeyskaya, Miatlinskaya, Gergebilskaya HPPs, Chiriyrtskaya HPP-1 and HPP-2). These works are included in RusHydro’s investment program and are aimed at safety improvement of hydrotechnical facilities.

The Board of Directors approved a rental agreement between RusHydro and SO UES, qualified as interested party transaction.

According to the agreement RusHydro conveys a part of a building located on the territory of the Zhigulevskaya HPP for a temporarily possession and use SO UES.

The Board of Directors approved a sale and purchase agreement of share in share capital of VolgaHydro LLC between RusHydro and Voith Hydro GmbH & Co. KG.

According to the agreement RusHydro sells to Voith Hydro GmbH & Co. KG a 10.0000008% share with par value of RUB 12,112,063 in share capital of VolgaHydro LLC. As a result RusHydro’s share in share capital of VolgaHydro LLC will decrease from 50.0000008% to 40%.

An obligatory carve-out of 10.0000008% share at par value in favor of Voith Hydro was stipulated in the participants’ agreement signed on March 14, 2013.

***

The Board of Directors approved amendments and additions to the list of non-core assets of RusHydro approved by the Board on February 17, 2014.

The Board of Directors approved sell of 100% stake in JSC ESCO UES, included in the list of non-core assets of RusHydro, at a price determined by the independent appraiser, which cannot be lower than the current market price.

***

The Board of Directors approved changes in organizational structure of parent company of RusHydro Group – JSC RusHydro.

The changes are aimed at improvement of the Company’s management system. New organizational structure is based on the following principles: optimization of the levels of management and number of employees, improvement of of management’s accountability as well as reduction of a number of business units.

New organizational structure provides for the following significant changes:

§  reduction of number of the Management Board members from 14 to 5 persons;

§  exclusion of a category “Deputy Chairman of the Management Board”;

§  introduction of a category “Deputy Director General” – 8 persons;

§  exclusion of a category “Directors of business dimensions” – 18 persons;

§  exclusion of directorates – 10 business units;

§  reduction of number of divisions from 40 to 22;

§  divisions will be managed by directors of divisions.

By introducing new organizational structure RusHydro expects to accomplish the following results:

§  creation of a “flatter” organizational structure that will enable the Company to be more flexible while facing new challenges and tasks;

§  clearer allocation of responsibilities and duties among managers;

§  decrease in the number of the executive staff and lowering SG&A costs in accordance with the government’s guideline and RusHydro’s Board of Directors.

The Board of Directors determined that the Management Board of RusHydro will consist of 5 members with the following scope of responsibilities:

§  Chairman of the Management Board – Director General – overall management of the Group;

§  Member of the Management Board responsible for finance and economics;

§  Member of the Management Board responsible for operating business;

§  Member of the Management Board responsible for construction and engineering;

§  Member of the Management Board responsible for innovations and strategy.

In accordance with new organizational structure the Company’s Management Board will consist of the following members:

§  Evgeny Dod, Chairman of the Management Board – Director General;

§  George Rizhinashvili;

§  Mikhail Mantrov;

§  Boris Bogush.

The Board of Directors appointed Vladimir Tokarev, General Director of JSC RusHydro MC (UK Gidroogk), a subsidiary responsible for construction of major Group’s projects, to a position of a member of the Management Board of RusHydro and commissioned Evgeny Dod to sign the labor agreement with Mr. Tokarev. The Board of Directors also approved combining positions of member of the Management Board of RusHydro and General Director of JSC RusHydro MC by Vladimir Tokarev.

From October 31, 2014, Sergey Tsoy will occupy position of Deputy Director General, state-secretary responsible for public and government relations as well as international cooperation; Yuri Gorbenko will occupy position of Deputy Director General responsible for construction; Sergey Abrashin will occupy position of Deputy Director General responsible for security; Sergey Tolstoguzov will occupy position of Deputy Director General responsible for the Far Eastern part of business; Stanislav Savin will occupy position of the First Deputy Director General responsible for electricity and capacity sales; Evgeny Gorev will occupy position of Deputy Director General responsible for corporate governance and legal issues; Vladimir Pekhtin will occupy position of Deputy Director General responsible for R&D. Rakhmetulla Alzhanov, Konstantin Bessmertny and Sergey Voskresensky will occupy positions of Advisers to Chairman of the Management Board– Director General.