On the 4th of February Director General of JSC IDGC Holding Nikolay Shvets answered questions from media regarding the criteria of dividend assessment in the Company and the size of investments to be made by IDGC Holding in 2010.

“We are planning to develop a dividend policy to be applied starting from 2011 based on clear performance criteria. The amount of dividend as we see it today will be assessed as a percentage of net profit for the year subject to performance under the investment program approved by regions”, said Nikolay Shvets to the journalists at the backstage of the Russia 2010 Investment Forum held in Moscow.

Nikolay Shvets pointed out that the transition to the future tariff regulation system until 2011 was set forth in legislation and supported by the Government. “It is the cornerstone for distribution grid companies to implement their investment programs and secure their performance”, said Nikolay Shvets.

The Company’s Director General said that the Government’s support, availability of strategic assets and opportunities for implementing the Company’s potential were extremely attractive for investors.

“RAB regulation opens for us opportunities of long-term financing from banks. Banks lending to IDGC already have access to refinancing by the Central Bank of Russia against a pledge of IDGC’s liabilities. We are also supported by the Government through extra injections in the registered capitals of the Holding’s companies”, said Nikolay Shvets.

When referring to actual investments by IDGC Holding’s companies, he said that in 2009 they amounted to 86,700 million rubles. Over the year the investment program was adjusted by 26 billion rubles as compared to the target level. The investments shrank mainly due to a lower output of useful electricity and non-payments by power sales companies and electricity consumers. The turbulent situation at financial markets in 1H2009 due to the high cost of debt also had its impact. Investments are currently planned to reach 110 billion rubles in 2010.

In replying to an answer about key development targets of the Holding in 2010, Nikolay Shvets said that IDGC Holding was a key actor in implementation of the governmental energy saving and energy efficiency program. This is also true for energy saving in its own distribution grids and for the development of a power consumption metering system to implement the governmental program for energy saving by Russian businesses, said Nikolay Shvets.

He pointed out that implementation of the Renovation Program, “which will allow the Holding to achieve its conceptual development objectives and implement the task of enhancing energy efficiency and energy saving set by the Government” was another priority goal of the Holding.

He said that the Renovation Program was planned to be brought forward to the Government in May 2010. The Program is being finalized with the support of the Energy Ministry of the Russian Federation. “We hope that it will enjoy the status of a Federal Target Program. Its amount is indicatively estimated at two trillion eight hundred and fifty billion rubles. IDGC Holding is currently developing criteria and priorities for power facilities to join the Renovation Program. Many facilities under the Program are part of investment programs of IDGC Holding’s subsidiaries and dependent companies”, said JSC IDGC Holding’s Director General.

He also underlined that, due to high wear of PPE in the distribution grid facilities, implementation of the Renovation Program would require considerable financial resources.

“Securing a proper level of investments in development of the distribution grid facilities will require implementation of the Private-Public Partnership mechanism potential. The transition by IDGC to RAB regulation will produce a considerable amount of financing to implement the Renovation Program. At the same time IDGC Holding and its subsidiaries will need to consolidate their efforts their performance. We are currently engaged in active consultations with international electric utility businesses to draw on their experience of building a management system”, said Nikolay Shvets.