Moscow, 21 April 2006. At its regular meeting held today, the Board of Directors of RAO "UES of Russia" considered issues relating to the AGM of the Company.

The Board of Directors fixed 12 May 2006 as the record date for the purpose of determining the persons entitled, under the Russian law, to take part in the AGM of RAO "UES of Russia". As provided by the Russian law and the Charter of RAO "UES of Russia", the holders of preferred shares are not entitled to vote at the AGM, which is due to the fact that at the last year's AGM the shareholders approved the payment of dividends on preferred shares.

Also, the Board of Directors submitted draft amendments of the Charter of RAO "UES of Russia" for shareholder approval at the AGM.

On 6 March 2002, the Board of Directors approved the divestiture by RAO UES Group entities of their non-core assets in order to cut costs. In this connection, the Board of Directors was authorized to make decisions regarding divestments of non-core assets worth in excess of RUB30 million.

A provision to that effect is to be included in the Company's Charter, while the amount of such deals will be stated in the restated Procedure for Interaction between RAO "UES of Russia" and its Subsidiaries and Dependent Companies (SDCs).

In order to ensure that RAO representatives' actions are taken on a prompt and timely basis, it is proposed that the right to appoint the Company's representatives to take part in members' meetings of the business companies whose shares or stakes are owned by RAO "UES of Russia" be transferred from the Management Board to the Chairman of the Management Board of RAO "UES of Russia".

Also, it is proposed that the right to consider, on behalf of the employer in the energy industry, of a draft collective agreement with respect to the SDCs, be removed from the terms of reference of the Management Board of RAO "UES of Russia". Under to the Russian law and the Charter of RAO "UES of Russia", these functions are currently performed by the All-Russian Power Industry Employers Association, which conducts collective bargaining and enters into agreements with trade unions and their associations.

In addition, a proposal was made to amend the Regulation on the Board of Directors and the Regulation on the Management Board of RAO "UES of Russia". The proposed amendments are intended primarily to clarify the process for the preparation of meetings of these management bodies, and the control over implementation of their decisions.

The Board of Directors approved the Restated Procedure for Interaction with Business Companies Whose Shares (Stakes) are Held by RAO "UES of Russia".

The restated Procedure became necessary in light of the changes in the corporate relationships between RAO "UES of Russia" and its SDCs. For instance, the activities of RAO UES representatives at OAO "UES SO-CDA", OAO "UES FGC", and the WGCs will be governed by separate regulatory documents of RAO "UES of Russia".

In particular, the restated Procedure contains provisions that expand the powers of the Board of Directors of RAO "UES of Russia" with respect to its control over transactions in subsidiaries' shares, stakes, and assets. From now on, the Board of Directors of RAO "UES of Russia" will determine the stance of the Company's representatives at SDCs regarding transactions involving disposal of their core assets where the book value and/or market value of assets is in excess of RUB 15 million.

The Board of Directors also approved the securities issuer's quarterly report of RAO "UES of Russia" for Q1 2006.

* * *

The Board of Directors of RAO "UES of Russia", performing the functions of AGMs of OAO "WGC-1", OAO "WGC-2", OAO "WGC-4", approved the companies’ Annual Reports, financial statements, [including the] income statements, and income distributions for 2005.*

In FY2005, the net income of WGC-1 amounted to RUB2.97 million (excluding RUB23.59 million of net income allocated for interim dividends for 9M 2005). Of that amount, RUB1.33 million will be placed into the reserve fund, and RUB1.64 million will be used for investment purposes. In FY2005, the net income of WGC-2 amounted to RUB2.3 billion (excluding RUB67.46 million of net income allocated for interim dividends for 9M 2005). Of that amount, RUB118.62 million will be placed into the reserve fund, and RUB2.1 billion will be used for investment purposes. WGC-4 had RUB104.6 million of undistributed profit (no interim dividends had been paid), of which RUB5.2 million will be placed into the reserve fund, and RUB7.2 million will be used for investment purposes.

WGC-2 will pay RUB127.5 million in dividends for 2005 (taking into account the dividends paid for 9M 2005), and WGC-4 will pay RUB92.2 million. WGC-1 will not pay dividends in respect of 2005 as the entire amount of dividends was paid for 9M 2005.

The Board also elected the WGCs' Boards of Directors and Auditing Commissions, approved amendments to the WGCs' Charters updating the powers of the Board of Directors, and adopted some internal regulations of the companies.

The amendments to the Charters are designed for WGC shareholders to retain their control of the key resolutions adopted in their respective subsidiaries. In particular, the amendments to the Charters allow the WGCs to determine their stance on the items of business to be considered at the Board and shareholder meetings of the SDCs, specifically:

• approve the target key performance indicators (KPI) for SDCs and the KPI performance reports;
• approve the appropriation of profit and loss based on the results of financial year;
• approve the payment (declaration) of dividends for the first quarter, first half, first nine months of a financial year, and for the entire financial year;
• approve an investment programme and performance report, etc.

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* Under the Charters of these WGCs, resolutions on the matters within the competence of a General Meeting of shareholders are to be taken by the Board of Directors of RAO "UES of Russia" as long as RAO "UES of Russia" holds 100% of the voting shares of the WGCs.

OAO "WGC-1" was registered with the state authorities on 22 March 2005 in the city of Tyumen. The Director General of OAO "WGC-1" is Vladimir Khlebnikov. OAO "WGC-1" comprises Permskaya TPP, Kashirskaya TPP-4, Verkhnetagilskaya TPP, Nizhnevartovskaya TPP, Urengoyskaya TPP, and Iriklinskaya TPP. The authorized capital of OAO "WGC-1" is RUB16,783,508,450 and comprises 16,783,508,450 ordinary shares of RUB1 par value.

OAO "WGC-2" was registered with the state authorities on 9 March 2005 in the Izobilnensky District of Stavropol Kray. The Director General of OAO "WGC-2" is Mikhail Kuzichev. OAO "WGC-2" comprises Pskovskaya TPP, Serovskaya TPP, Stavropolskaya TPP, Surgutskaya TPP-1, and Troitskaya TPP. The authorized capital of OAO "WGC-1" is RUB10,769,803,935 and comprises 10,769,803,935 shares of RUB1 par value.

OAO "WGC-4" was registered with the state authorities on 4 March 2005 in the city of Surgut. The Director General of OAO "WGC-4" is Andrey Kitashev. OAO "WGC-4" comprises Berezovskaya TPP-1, Smolenskaya TPP, Surgutskaya TPP-2, Shaturskaya TPP-5, and Yaivinskaya TPP. The authorized capital of OAO "WGC-4" is RUB8,210,830,760 and comprises 8,210,830,760 shares of RUB1 par value.

* * *

The Board of Directors of RAO "UES of Russia" approved the measures designed to complete the implementation of the target structure of OAO "TGC-11".*

The Board of Directors approved the merger of regional generation companies (RGCs)—OAO "Omsk Generation Company" and OAO "Tomskenergo"—with and into OAO "TGC-11", and approved the terms of such merger.

It was stated that the preferred scenario for the creation of the target structure of OAO "TGC-11" would be the merger of the RGCs with and into OAO "TGC-11". The Board of Directors of RAO "UES of Russia" provided that, in the event that shareholders in at least one of the RGCs do not approve the merger with and into OAO "TGC-11", OAO "TGC-11" would issue additional shares, which would be exchanged for shares in OAO "Omsk Generation Company" and OAO "Tomskenergo".

The Board of Directors instructed RAO UES representatives at the Board and shareholder meetings of the RGCs concerned to vote FOR the approval of the RGCs' merger with and into OAO "TGC-11".

After the shareholder meetings are held at the RGCs merging with OAO "TGC-11", the Management Board of RAO "UES of Russia", acting in the capacity of a general shareholder meeting of OAO "TGC-11", will take resolutions on the matters relating to the Company's reorganization.

The representatives of RAO "UES of Russia" at the shareholder meeting of OAO "TGC-11" were instructed to vote for the approval of the maximum number of shares that OAO "TGC-11" is authorized to issue in addition to those outstanding ("declared shares") at 1.1 trillion ordinary shares, par value RUB0.01 each, worth a total of RUB11 billion, and for increasing the authorized capital of OAO "TGC-11" through issuance of the same number of additional shares. Method of placement: shares in the merging companies will be converted into the additional shares of the surviving company, OAO "TGC-11".

The Board of Directors of RAO "UES of Russia" approved the ratios for conversion of RGC shares into TGC-11 shares. The following amounts of RGC shares will be converted into one ordinary share of OAO "TGC-11":

• 0.000004912 of an ordinary share in OAO "Omsk Generation Company", par value RUB1,516.40 [per share];
• 0.000005363 of a Type A preferred share in OAO "Omsk Generation Company", par value RUB1,516.40 [per share];
• 0.019000301 of an ordinary share in OAO "Tomskenergo", par value RUB1 [per share];
• 0.020746342 of a Type A preferred share in OAO "Tomskenergo", par value RUB1 [per share].

The conversion ratios were calculated on the basis of the report determining the market value of shares in the merging companies prepared by the investment bank "Metropol Investment Financial Company" with the participation of independent appraisers, ZAO "Rossiyskaya Otsenka" ("Russian Appraisal") and OOO "KG Expert".

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* OAO "TGC-11" was registered 26 August 2005 with the Inspectorate of the Federal Tax Service of the Russia for Centralny District, city of Novosibirsk. The Director General of the Company is Sergey Kozhemyako.

The resolution to establish OAO "TGC-11" as a wholly-owned subsidiary of RAO "UES of Russia" was approved by the Board of Directors of RAO "UES of Russia" on 1 July 2005. OAO "TGC-11" is being established on the basis of the generating assets of OAO "Omskenergo" and OAO "Tomskenergo".

The authorized capital of OAO "TGC-11" is RUB10 million and consists of 1 billion ordinary shares of RUB0.01 par value [each].

* * *

The Board of Directors approved the sale of the 47.36% stake held by RAO "UES of Russia" in OAO "Yaroslavl Retail Company". The shareholding will be sold through a public auction with open bidding organized by an accredited agent.

The auction start price must not be lower than the value determined by an independent appraiser, RUB182 million. The auction winner will be the bidder that submits the highest bid. It is provided that RAO UES subsidiaries and dependent companies, federal and municipal entities may not participate in the auction, and the shares may be sold only to third parties.

The Board of Directors commissioned the Management Board to submit proposals regarding the use of proceeds from sale of the shareholding in OAO "Yaroslavl Retail Company".

Previously, in accordance with the Board resolution of 30 September 2005 on the "pilot" projects for the disposal of shares in energy retail companies**, the Management Board of RAO "UES of Russia" had included OAO "Yaroslavl Retail Company" on the list of "pilot" companies whose shares are to be sold in a public auction.

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* OAO "Yaroslavl Retail Company" was established in the course of reorganization of OAO "Yarenergo" and was registered with the state authorities on 11 January 2005. The Company is engaged in purchase and sale of electricity on the wholesale and retail markets.

** The resolution of the Board of Directors of RAO "UES of Russia" of 24 June 2005 provides for the transfer of shares in energy retail companies established as a result of regional energos' restructuring for fiduciary management to the respective TGCs (in accordance with the latter's territorial configuration) as a basic approach to the management of energy retail companies during the transition period.

It was also decided that up to 10 projects might be implemented using other options for the disposal of ERC shares, with individual decisions to be taken by the Board of Directors of RAO "UES of Russia".

As resolved by the Board of Directors of RAO "UES of Russia" on 30 September 2005, the list of ERCs for implementing pilot projects includes, besides OAO "Yaroslavl Retail Company", OAO "Kaluga Retail Company", OAO "Tambov Energy Retail Company", OAO "Vologda Retail Company", OAO "Krasnoyarskenergosbyt", OAO "Novgorod Energy Retail Company", OAO "Energosbyt Rostovenergo", OAO "Udmurt Energy Retail Company", OAO "Chelyabenergosbyt", and OAO "Nizhny Novgorod Retail Company".

For that purpose, the following kinds of "pilot" projects were adopted: transfer of ERC shares for fiduciary management within the framework of projects implemented jointly with regional administrations (up to 3 projects); transfer of ERC shares for fiduciary management to a WGC (1 project); transfer of ERC shares for fiduciary management to independent retail companies (at least 5 projects); and sale of ERC shares in a public auction (1 project).

* * *

The Board of Directors of RAO "UES of Russia" instructed representatives of OAO "Sakhalinenergo" at a shareholder meeting of OAO "Okhinskaya CHPP" to vote for the issuance of the power plant's additional shares in favour of OAO Rosneft Oil Company.

Previously, at its meeting held 26 February 2006, the Board of Directors of RAO "UES of Russia" backed the proposal to hold a shareholder meeting to increase the authorized capital of OAO "Okhinskaya CHPP" in view of the urgent need for funds to modernize the power plant. However, the Board of Directors decided that it would give its voting recommendations to RAO UES representatives at its April meeting, taking into account the review of an alternative option for the deal.

The alternative option provides for the sale of the 49% stake in OAO "Okhinskaya CHPP" owned by OAO "Sakhalinenergo". In this connection, announcements were published in the media inviting indications of interest in purchasing the shareholding in OAO "Okhinskaya CHPP". Similar invitations were sent to the potential buyers of the shareholding. However, the invitation of bids demonstrated a lack of interest in the power plant's shares.

It is assumed that, after a shareholder meeting of OAO "Okhinskaya CHPP" approves the issuance of additional shares, and until all relevant procedures are completed, OAO "Sakhalinenergo" and OAO "Rosneft Oil Company" will enter into a contract for trust (fiduciary) management of shares in OAO "Okhinskaya CHPP". The terms and conditions of the contract will ensure complete control by RAO "UES of Russia" of all matters relating to the potential asset disposal.

The Board of Directors instructed RAO UES representatives on the Board of Directors of OAO "Sakhalinenergo" to vote FOR the transfer by Sakhalinenergo of its shares in OAO "Okhinskaya CHPP" to OAO "Rosneft" for fiduciary management.

The resolution to issue additional shares of the power plant and the formation of the contract for fiduciary management of shares in OAO "Okhinskaya CHPP" for the period until the share issue is completed will enable OAO "Rosneft" to start preparations for the new 2006/07 heating season at the power plant.

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* The first three power units at the Okhinskaya CHPP were put online back in 1960-1961. Today, the power plant is in urgent need of modernization, as its steam turbines and generators have reached the end of their economic life. In addition, after the Neftegorsk earthquake in 1995, the plant's foundation settled, and the supporting structures were deformed. The Okhinskaya CHPP was built to withstand a magnitude 6 earthquake. However, in 2001 the Russian Government set the seismicity rate for the area as high as 9 points. The plant's modernization is estimated at RUB935.9 million. However, neither the plant, nor its principal shareholder, OAO "Sakhalinenergo", have the funds needed to implement modernization. The management of OAO "Sakhalinenergo" and OAO "Okhinskaya CHPP" have on numerous occasions urged the Sakhalinskaya Region Administration and the Regional Energy Commission to include the investment component in the power plant's tariff, but to no avail.

It should be pointed out that the power plant is the only supplier of electricity and heat to customers in the north-east of Sakhalin Island. Moreover, the power plants is heavily reliant on OAO "Rosneft-Sakhalinmorneftegaz", which is the only major customer of heat and electricity and the only supplier of primary and backup fuel to the power plant. In addition, OAO "Rosneft-Sakhalinmorneftegaz" is exploring the possibility of building its own generating facilities as an alternative to the Okhinskaya CHPP, in order to ensure reliable power to its production facilities.

* * *

In line with the RAO UES strategy for divestiture of non-core assets*, the Board of Directors approved the divestiture of shares in OAO "Corporate Service Systems" held by RAO "UES of Russia".

RAO "UES of Russia" plans to sell its 49% holding in OAO "Corporate Service Systems". The auction start price determined by an independent appraiser is RUB231.5 million.

OAO "Corporate Service Systems" was established as a result of restructuring of OAO "Belgorodenergo". Initially, the company retained the "Belgorodenergo" brand and was expected to perform the functions of CEO for all spin-off companies. However, owing to the changes in RAO UES strategy regarding energy management companies, effective 1 April 2005, OAO "Belgorodenergo" became a services company engaged in IT, legal services, accounting and audit, and therefore represents a non-core asset.

The company changed its name for OAO "Corporate Service Systems", while the regional grid company, OAO "Electricity Grid Company" got the name of Belgorodenergo to preserve the brand.

As shares in OAO "Belgorodenergo" (now OAO "Corporate Service Systems") were contributed to the company's authorized capital by RAO "UES of Russia" at the time of its establishment, its disposal is only possible after the Russian Government takes a relevant decision.

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* The decision on the divestiture by RAO UES Group entities of their non-core assets was approved by the Board of Directors of RAO "UES of Russia" at its meeting held 6 March 2002.

* * *

The Board of Directors reviewed the proposals made by RAO UES management to issue additional shares in generation companies in 2006-2008 to raise funds needed to implement top priority investment projects.

By now, most WGCs and TGCs prepared their proposals on the ways to finance investment projects, including raising funds through additional share issues. Based on the review of these projects, the Company's management made a priority list of generation companies whose investment projects in the deficit areas may be financed by additional share issues, which includes the wholesale and territorial generation companies—WGC-3, WGC-4, WGC-5, TGC-1, TGC-3, TGC-8, TGC-9 and TGC-10.

The proceeds from the additional share issues will be primarily used to finance investment projects to build new power units and revamp the existing power plants.

The Board of Directors instructed the Company's management to further explore various aspects of additional share issuance by the WGCs and TGCs, and submit the list of generation companies and investment projects which will be financed with funds raised through additional share issues to the relevant federal ministries and government agencies for agreement. The Board of Directors recommended that the Management Board should select up to four pilot projects from the list in order to explore the possibility of floating their additional shares on the domestic and international stock markets in 2006-2007, and submit for consideration by the Board of Directors the programmes for the preparation and floatation of the additional shares for the pilot projects.

The Board of Directors of RAO "UES of Russia" supported the steps being taken by the Company's Management Board to prepare for WGC/TGC additional share issues, and noted the tentative schedule for the additional issues by the generation companies. The programmes for additional share issuance at each of the above WGCs and TGCs will be submitted to the relevant ministries for approval. These programmes will take into account the value and conditions of the share issues and their appropriateness in meeting the goals of investment project financing and implementing them, as a matter of priority, at the project sites identified by the list of energy areas intended for more urgent implementation of new generating projects in the UES of Russia.

As part of the process to prepare the additional share issuance programmes, the Board of Directors commissioned the Management Board to present rationales for each investment project to be implemented with funds raised through additional share issues, and negotiate with OAO "Gazprom" the possibility of gas supply and the terms of fuel supply to the power units to be built under the investment projects.

The additional shares may be offered to domestic and international investors already in 2006-2008. The shares may be sold through public offerings or private placements of shares to a strategic investor, or a combination of both.

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* The order to approve the List of Priority Generation Projects Scheduled to Go On Line in the UES of Russia was signed by Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais on 28 March 2006.

The list consists of energy facilities located in 19 energy systems across Russia, including the Moscow, Leningrad, Tyumen, Sverdlovsk, and Kaliningrad Energy Systems. A total 19,407 MW of installed generation capacity is scheduled to go on line at the top priority projects.

The reason for including a generation project on the List is the probability of generating capacity deficit in those energy systems in the near term due to increased energy use and depreciation of plant and equipment, and insufficient transfer capability of the existing power transmission lines.

* * *

The Board of Directors instructed RAO UES representatives on the Board of Directors of OAO "HydroWGC" to vote FOR the approval of resolutions relating to the creation of corporate structure of Boguchansk Energy and Metallurgy Association Project ("BEMO Project").

The project provides for the completion of the Boguchanskaya HPP project with a designed capacity of 3,000 MW located on the Angara River, and the construction of an aluminium smelter with a capacity of 600,000 mt of primary aluminium annually, which will be a key consumer of electricity generated by the plant. The project will be implemented, on a parity basis, by OAO "HydroWGC" and OAO "RUSAL".

In accordance with the corporate structure of the BEMO Project, OAO "HydroWGC" is to directly participate in six companies of the project, two of which will be non-Russian resident entities: two foreign intermediate companies which will become shareholders in joint ventures, "Zavod" ("Plant") and "Stantsiya" ("Power Station"), respectively; and four Russian companies that are Organizers and Project Owners ordering the construction of the Power Station and Plant.

* * *

The Board of Directors of RAO "UES of Russia" noted the progress report on the preparation for additional share issue of OAO "HydroWGC"* and the appraisal of the property to be contributed by RAO "UES of Russia" as payment for the shares.

The Board of Directors will take a vote in May this year in lieu of a Board meeting on the composition and value of the property to be exchanged for HydroWGC shares. The Board will also decide on submitting the motion to acquire said shares in HydroWGC for approval at a shareholder meeting of RAO "UES of Russia".

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* The resolution to increase the authorized capital of OAO "HydroWGC" through issuance of additional ordinary shares worth a total of RUB120 billion was taken by the Board of Directors of RAO "UES of Russia" acting in the capacity of shareholder meeting of OAO "HydroWGC", on 28 October 2005. The additional shares are to be placed in favour of RAO "UES of Russia" and the Russian Federation.

The additional share issue of OAO "HydroWGC" was registered with the Federal Service for Financial Markets of Russia on 21 March 2006.