Moscow. 8 June 2005. A project has been launched to build power unit No. 2 with 450MW installed capacity at the Severo-Zapadnaya CHPP*. After the power unit is put into operation in Q4 2006, the plant's capacity will reach 900 MW. The project will be implemented in parallel with the construction of the heating pipeline linking the power plant and the Primorsky District of St.-Petersburg. These two projects will significantly raise the efficiency of the Severo-Zapadnaya CHPP and ensure reliable heating in several districts of St.-Petersburg.

The funding plan for the construction of power unit 2 of the power plant was approved by the Board of Directors of RAO "UES of Russia" on 26 April 2005. The project implementation became possible after placement of the third issue of shares of OAO "Severo-Zapadnaya CHPP" on 6 June 2005. The construction will be financed by raising funds in the open market, without using the capital investment allocations of RAO "UES of Russia".

FGUP "VO Tekhnopromexport" is the general contractor for the project. The fixed price and deadline for the project were determined in the supplementary agreement to the contract between OAO "Severo-Zapadnaya CHPP" and FGUP "VO Tekhnopromexport". The cost of the project to complete the installation of the new power unit is estimated at RUB3,303 million.

* The Severo-Zapadnaya CHPP ("North-West CHPP") in St.-Petersburg is one of the most technologically advanced power plants of RAO "UES of Russia". The power plant uses the binary combined cycle technology, which has efficiency of 51,5% as compared to 40% at the conventional steam power units. After the registration of the report on the results of the third share issue of OAO "Severo-Zapadnaya CHPP" RAO "UES of Russia" will hold a 66.2% stake in the authorized capital of the power plant.