Moscow, 17 December 2004. The European Bank for Reconstruction and Development (EBRD) will grant a EUR80 million loan to OAO "UES System Operator-Central Dispatch Authority" (OAO "UES SO-CDA"), subsidiary of RAO "UES of Russia". An agreement to that effect has been signed in London today by Boris Ayuyev, member of the Management Board of RAO "UES of Russia" and Chairman of the Management Board of OAO "UES SO-CDA", and Jean Lemierre, EBRD President.

Under the agreement, the loan is split into a 10-year, EUR60 million “A loan” from the Bank itself and a EUR20 million “B loan” over seven years syndicated to two commercial lenders, Raiffeisen Zentralbank Osterreich AG and Bayerische Landesbank.

The System Operator will use the funds to develop and implement a state-of-the-art Supervisory Control and Data Acquisition/Energy Management System (SCADA/EMS) for the Unified Energy System of Russia. The project involves purchase, installation and commissioning of hardware-software systems in the Central Dispatch Administration (CDA) and seven Integrated Dispatch Administrations (IDAs), which are subdivisions of OAO "UES SO-CDA". The new system implementation will help increase reliability and efficiency of the power system operation in a competitive electricity market environment.

"The EBRD is proud to be associated with such investments, which promote liberalisation and competition in a vital sector of the Russian economy," the EBRD’s President, Jean Lemierre, said at the signing today. Mr Boris Ayuyev, Chairman of the Management Board of OAO "UES SO-CDA", added: “We expect the main advantages of the new system implementation to be an increased reliability and quality of operational control, as well as improved efficiency of power system operation, with substantial overall benefits for the wholesale electricity markets.”

This loan follows a EUR100 million EBRD loan extended in 2001 to RAO "UES of Russia" to help set in motion the restructuring effort. The EBRD will continue close cooperation with the Government throughout the restructuring of the power sector.