Today, at the Kaliningrad CHP-2 premises, Alexey Miller, Chairman of the Management Committee of Gazprom and Evgeny Dod, Chairman of the Management Board of INTER RAO UES signed an Investment Contract between Mezhregionenergostroy (Mezhregiongaz Group of companies) and INTER RAO UES.

The Contract opens the way for the execution of an investment project embracing the Kaliningrad CHP-2 expansion via the construction of the second 450 MW power unit. When implementing the project Mezhregionenergostroy is committed to providing the finance for it and INTER RAO UES undertakes to organize the construction of the power unit and upon commissioning hand over the facility to the investor. Pursuant to the Contract, the capital investment ceiling will make up RUB 22.3 bln and the construction completion deadline is set for December 31, 2010.

The second power unit construction at the Kaliningrad CHP-2 will enable to reduce the energy shortage risk and enhance the energy supply reliability in the region as well as will bolster the regional energy security.

On signing the Contract Alexey Miller and Evgeny Dod together with the Kaliningrad Oblast Governor Georgy Boos participated in laying a symbolic “first stone” in the construction of the second power unit at the Kaliningrad CHP-2.

Background:

In its Directive # 672 of October 12, 2007 the Russian Federation Government has introduced changes in the Federal Target Program for the Kaliningrad Oblast Development with regard to the provision of the economic and energy security in the region. The second power unit at the Kaliningrad CHP-2 is planned to be built so as to meet the above challenge.

On December 6, 2007 the Russian Federation Government took the decision to set up together with Gazprom an energy company (where a 51 per cent stake will be owned by Gazprom) based on the Kaliningrad CHP-2 facilities (first and second power units). The company will be established for the purpose of completing the construction of the power plant – the second startup complex with the PGU-450 MW power unit. The move has laid the foundations for launching the organization of large scale construction.

Mezhregionenergostroy is funding the construction of the second power unit at the Kaliningrad CHP-2 pursuant to the Minutes of the Meeting chaired by V. A. Zubkov, Chairman of the Government of the Russian Federation (Protocol # V3-P9-28pr of December 6, 2007). Upon completion of several pertinent intra-corporate procedures the share of Gazprom and INTER RAO UES in Mezhregionenergostroy will account for 51 and 49 per cent respectively.

Based on the outcomes of an openly held competition (held on September 15) a consortium comprised of VO Tekhnopromexport and Atomstroyexport has been selected as the general contractor for the power unit construction.