JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on February 20, 2013.

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The Board of Directors approved the strategy of reorganization of RusHydro’s hydro engineering operations through consolidation of three subsidiaries into a unified company.

The consolidation aims to improve project complex efficiency and increase the total economic effect through better usage and planning of hydro engineering resources.

RusHydro Group currently manages the following hydro engineering operations:

§  JSC Institute Hydroproject;

§  JSC Lenhydroproject;

§  JSC Mosoblhydroproject.

The reorganization is expected to result in creation of a unified company – JSC Incorporation Hydroproject, wholly owned by RusHydro. These institutes have similar capabilities and functions that often overlap. Institute Hydroproject and Lenhydroproject have more expertise in developing comprehensive and complex hydro engineering projects, Mosoblhydroproject is specialized in small and medium hydro project developments.

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The Board of Directors approved the agreement between RusHydro and Amurskiy regional center of hydrometeorology and environmental monitoring on assignment of hydrometeorological station for gratuitous use.

According to the agreement Rushydro assigns the hydrometeorological station and water level measurement system to the center for gratuitous use. The Center will provide RusHydro with information on hydrometeorological conditions and forecasts of water inflows to Zeyskiy reservoir.

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The Board of Directors approved the agreement on liability, Directors’, Officers’ and Company’s financial lines insurance between RusHydro and Ingosstrah, qualified as interested-party transaction.

Directors & Officers Liability (D&O) insurance has become a regular practice for the companies entering international capital markets and provides additional protection for listed stock companies.

D&O insurance policies offer liability cover for the company, its subsidiaries and managers to protect them from claims which may arise from the decisions and actions taken within the scope of their regular duties. The agreement is valid through December 31, 2013.

According to the Board of Directors decision of February 5, 2013 the approval of the agreement on liability, Directors’, Officers’ and Company’s financial lines insurance between RusHydro and Ingosstrah, qualified as interested-party transaction, is included in the EGM agenda to be held on April 19, 2013.

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The Board of Directors approved the report on execution of priority objectives of RusHydro in 2012 and defined the priority objectives for 2013.

The main priorities in 2012 were:

§  reliability and safety control of operating hydropower plants and implementation of HPPs construction projects. To improve reliability of operating plants the Company started to implement the comprehensive modernization program. In 2012, the implementation of the program resulted in increase of installed capacity by 26.5 MW;

§  implementation of investment program aimed at shareholder value creation;

§  operating efficiency and retail business profitability improvement through cost savings, improvement of energy efficiency and energy savings and implementation of other ways of modernization and technological development;

§  other developments including consolidation of hydropower assets and creation of innovations control system.

The priority objectives of RusHydro in 2012 are considered to be gained.

The Board of Directors defined the priority objectives of RusHydro for 2013:

§  reliability and modernization of operating plants;

§  operations and maintenance efficiency improvement;

§  increase of installed capacity through implementation of investment projects;

§  corporate consolidation of assets;

§  profitability improvement of energy retail companies;

§  competitive advantages improvement of project complex;

§  human resource development;

§  water resources development;

§  move towards target capital structure and enhancement of sources for investment program implementation.

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The Board of Directors approved the report on implementation of projects in 2012 determined in the list of core and non-core assets of RusHydro.

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The Board of Directors approved combining position of member of the guardianship board and Fund board of non-commercial organization “Charity fund “Involvement” by the members of RusHydro’s management board.

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The Board of Directors took a note that RusHydro and JSC Zagorskaya pumped storage plant No. 2 signed the agreement on construction of social and sports facilities in Sergievo-Posadsky region in the amount of RUR 920 mn.

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The Board of Directors approved its working plan of for the first half of 2013. According to the document the Board of Directors meetings will be held once in a month.