Moscow, 1 February 2006. OAO "Kalmenergosbyt"*, the retail spin-off of OAO "Kalmenergo", started operations effective today.

As of today, OAO "Kalmenergosbyt" has completed all corporate procedures required to start operations. The technical staff of OAO "Kalmenergo" has been moved to OAO "Kalmenergosbyt", and the facilities and equipment required to carry out retail activities have been leased out to OAO "Kalmenergosbyt".

The Federal Tariffs Service of Russia has given OAO "Kalmenergosbyt" the status of independent member of the wholesale electricity (capacity) market, which enables the company to purchase electricity on the wholesale market and resell it to consumers. The Regional Tariffs Service of the Republic of Kalmykia has set electricity tariffs for end-consumers of OAO "Kalmenergosbyt".

OAO "Kalmenergosbyt" was registered on 28 October 2005 with the Inspectorate of the Federal Tax Service of Russia for the city of Elista, Republic of Kalmykia.

The authorized capital of the Company is RUB5 million divided into ordinary shares of RUB1 par value. The Director General of OAO "Kalmenergosbyt" is Valery Churyumov.

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* OAO "Kalmenergosbyt" is a wholly-owned subsidiary of RAO "UES of Russia" created as a result of reorganization of OAO "Kalmenergo".

The restructuring plan of OAO "Kalmenergo" was adopted by the Board of Directors of RAO "UES of Russia" on 25 February 2005. As OAO "Kalmenergo" does not have its own heat or electricity generation facilities, or district heating networks, the energy company's restructuring plan provides for the unbundling of its energy retail and power network businesses by establishing a wholly-owned subsidiary of RAO "UES of Russia", OAO "Kalmenergosbyt".