On July 1, 2006 JSC " Territorial Generating Company #2" (TGC-2) started its operational activities as a unified Company. Vologda, Kostroma, Novgorod, Tver generating and Yaroslavl energy company have joined TGC-2 together with Vologda TPP. On May 3rd, 2007 Arkhangelsk generating Company was also included in TGC structure.

Therefore, during the past year the shaping of the Company Target Structure was accomplished. Another important event was the ratification by the TGC Board of Directors of the Development Strategy and the Investment Program for a mid-term perspective. Taking into consideration the latest adjustments the cumulative amount of TGC-2 Investment program till 2011 constitutes the estimated RUB38 billion. Over this period the Company is intending to construct 1145 MW of new generating capacity.

The Company Investment Program is an integral part of the corporate plan for modernization and development of Russian energy sector (plan of GOELRO-2 or State Commission for Electrification of Russia-2 (SCER-2)) and was aimed at raising competitiveness
and strengthening the Company position on the heat and electricity markets. Furthermore, it takes full consideration of the energy and fuel market tendencies. The implementation of this Program will alow the Company to increase its profitability, ensure investment appeal and the increase in capitalization.

The Program implementation has already been started throughout all regions of the Company presence. In March 2007 the first in a series of planned launches was successfully accomplished - the new 115 MW capacity generating set was put in operation at Yaroslavl
TPP-2.

The Company is intending to occupy the leading position on the heat markets in the regions of its presence, as well as to compete successfully on the electricity and capacity wholesale market. These goals can be reached by means of actively expanding the heat markets, developing cogeneration practices, introducing balanced policy on fuel markets, establishing long-term partner relations with energy consumers and resource suppliers. Realization of these goals will be facilitated by increasing the effectiveness of fuel consumption, managing value chain in order to control the price that energy consumers get, introducing advanced production and management technologies.

Company Profile
JSC "Territorial Generating Company # 2" (JSC "TGC-2") was established in February 2005. The Company"s Director General is Andrey Vagner. TGC-2 comprises generating capacity of 6 regions - Arkhangelsk, Vologda, Kostroma, Novgorod, Tver and Yaroslavl.

Since July 1st 2006 TGC-2 functions as a unified Company. TGC-2 operates 16 heat power stations, 8 boiler-houses, 4 enterprises of thermal networks. The aggregate electric capacity of TGC-2 enterprises is 2 582,5 MW, the installed thermal capacity constitutes 12 471 Gcal/h.