Moscow, 17 February 2005. ZAO "Inter RAO UES" and the Ministry of Energy of the Republic of Tajikistan have signed an Agreement on the establishment of OAO "Sangtuda HPP-1" The purpose of the Agreement is the parties' joint participation in the project to complete the construction of the Sangtuda HPP-1.

Under the Agreement, the initial authorized capital of OAO "Sangtuda HPP-1" is USD100,000. ZAO "Inter RAO UES" holds a 75% stake, and the Republic of Tajikistan owns 25% stake in the JV. In the future, the authorized capital will be increased through contribution of unfinished construction projects whose value is yet to be determined, and contribution of funds by the Russian company.

Under the agreement reached between the Governments of the Russian Federation and the Republic of Tajikistan, Russia undertook to build Sangtuda HPP-1 over the four years beginning in 2005. The completion cost of the power plant project is estimated at USD485 million.

During the negotiations between the Presidents of Russia and Tajikistan on 4 June 2004, it was agreed that part of Tajikistan's debt to the Russian Federation in the amount of USD50 million would be converted into the project to complete the Sangtuda HPP-1.

The Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais, the Energy Minster of the Republic of Tajikistan Jurabek Nurmakhmatov, and the Energy Minister of the Islamic Republic of Iran Habibollah Bitaraf signed on 13 January 2005 a Tripartite Protocol on the completion of construction and operation of the Sangtuda HPP-1 and Sangtuda HPP-2 in the Republic of Tajikistan. Under the Protocol, the Sangtuda HPP-1 is to be completed by Russia and Tajikistan.

The establishment of OAO "Sangtuda HPP-1" implements the parties' agreement to create a separate legal person to which Tajikistan will contribute the part of the construction project completed thus far.

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 The Sangtuda HPP-1 (installed capacity of 670 MW) and Sangtuda HPP-2 (220 MW) are located on the Vakhsh River 200 km south of the city of Dushanbe. The construction of Sangtuda HPP-1 started in the late 1980s, but was suspended soon afterwards due to the lack of funds. To date, the preparatory period of the power plant construction has been completed. Approach roads and service lines have been built, foundation pits have been uncovered, and work has been started to build concrete structures and penstocks.