Moscow, 30 March 2007. The Board of Directors of RAO "UES of Russia" received the progress report on the measures scheduled for 2006–2008 designed to ensure reliable electricity supply in the so-called "peak load areas" (PLAs).

In order to ensure reliable operation of RAO UES energy companies during the 2006-2007 autumn/winter period and those of the subsequent years, the Company developed consolidated three-year programmes seeking to ensure reliable power supply in each constituent entity of the Russian Federation. RAO "UES of Russia" is paying special attention to the implementation of such programmes in the 16 energy systems located in the so-called "peak load areas"*.

Special Working Groups have been set up to control the development and implementation of the reliability programmes. These Groups comprise representatives of all energy companies operating in the PLAs. Implementation of the programmes is overseen by the UES Reliability Headquarters. Energy companies' compliance with the requirements of these programmes is a prerequisite for obtaining a winter readiness certificate.

The Board stated that the measures envisaged by the programmes for 2006 had been carried out in full, which is evidenced by the fact that 2006/2007 winter readiness certificates were issued to all energy companies working in the PLAs.

The efforts made to produce the winter preparation programmes for 2006/2007 and subsequent years served as basis for developing and implementing, together with the regional authorities, five-year programmes to improve reliability of power supply to regional customers (including those based in the PLAs).

In 2006, RAO "UES of Russia" signed agreements to implement such programmes with the regional administrations in 9 PLAs, including the cities of Moscow and St.-Petersburg, the Tyumen Region (including the Khanty-Mansiysk Autonomous Okrug and Yamalo-Nenets Autonomous Okrug), Moscow Region, Sverdlovsk Region, Nizhny Novgorod Region, and Chelyabinsk Region. On 17 February 2007, a cooperation agreement was signed with the Krasnodar Kray Administration.

This year, similar agreements are expected to be signed with another 17 regional administrations, including the Republic of Sakha (Yakutia), Republic of Komi, Krasnoyarsk Kray, Perm Kray, Vologda Region, Murmansk Region, Rostov Region, Volgograd Region, Samara Region, Kurgan Region, Belgorod Region, Kaliningrad Region, Kaluga Region, Leningradskaya Region, Ryazan Region, and some regions in the Far East of Russia. RAO "UES of Russia" has already appointed working groups members and adopted plans for the five-year programmes to develop energy systems.

In addition, RAO "UES of Russia" invited the administrations of the "peak load regions" to enter into agreements on cooperation to ensure reliable and secure energy supply to consumers. Such agreements are intended to ensure operational reliability and provide for the establishment of an energy reliability HQ in each PLA. The HQ will comprise regional officials and officers of the energy companies operating in the respective PLAs. The primary focus of the HQ's activities will be on coordinating efforts to prevent and eliminate the consequences of power blackouts.

Cooperation agreements have been signed with the administrations of 18 constituent entities of the Russian Federation, namely, the Adygei Republic, Karelia Republic, Komi Republic, Dagestan Republic, Krasnodar Kray, Perm Kray, the cities of Moscow and St.-Petersburg, Khanty-Mansiysk Autonomous Okrug, the Moscow Region, Saratov Region, Vologda Region, Arkhangelsk Region, Leningradskaya Region, Ulyanovsk Region, Nizhny Novgorod Region, Chelyabinsk Region, and Tyumen Region. In the Sverdlovsk Region, the region's administration and RAO "UES of Russia" signed a joint protocol on the establishment of a Working Group to implement measures to ensure reliability of power supply. Preparations are underway to sign agreements with the Administrations of the Yamalo-Nenets Autonomous Okrug and the Tyva Republic.

The Board of Directors instructed the Company's Management Board to continue the work seeking to arrange for signing agreements between RAO "UES of Russia" and regional administrations of the Russian Federation to develop and ensure the implementation of the five-year power supply reliability and sector development programmes.

* The List of Peak Load Areas includes the energy systems in the city Moscow and the surrounding Moscow Region, St.-Petersburg and the Leningrad Region, the southern part of the Komi Republic, Tyumen Region, Vologda Region, Krasnodar Kray, Tyva Republic, Karelia Republic, Dagestan Republic, Sverdlovsk Region, Perm Kray, Chelyabinsk Region, Ulyanovsk Region, Saratov Region, Nizhny Novgorod Region, and Arkhangelsk Region.

* * *

The Board of Directors of RAO "UES of Russia" has approved the venue, date, and time of the Annual General Meeting of the Company's shareholders.

Pursuant to Article 10.1 of the Charter of RAO "UES of Russia", the Board set 26 June 2007 as the date for the AGM.

Like in the previous years, the Board selected the Zelenograd Palace of Culture located in Zelenograd, an administrative okrug of the city of Moscow, as a venue for the AGM. The Board's resolution was taken pursuant to the Regulations on the Additional Requirements to the Procedure for the Preparation for, Convocation and Conduct of the General Meeting of Shareholders, approved by Resolution of the Federal Commission for Securities Market (currently called the Federal Service for Financial Markets of Russia), dated 31 May 2002, and because of the owing to the optimum combination of price and quality of the premises rented for the AGM. The meeting starts at 11:00 a.m.

The Board of Directors also approved the structure of the 2006 Annual Report of RAO "UES of Russia" and gave the Management Board of the Company the task to draft the Annual Report and submit it for consideration by the Board of Directors at the Board meeting scheduled for 25 May 2007.

This announcement was published as information about a significant fact in the Interfax newswire at 15:02 Moscow time on 30 March 2007 in compliance with the requirements Federal Service for Financial Markets of Russia.

* * *

The Board of Directors of RAO "UES of Russia" noted the Management Board's proposals regarding the Company's shareholding in OAO "Power Machines" at the final phase of RAO UES reorganization.

As a reminder, pursuant to the resolution of the Board of Directors of 4 October 2005, the Company closed in December 2007 the deal to purchase 22.43% shares in OAO "Power Machines" for USD101.4 million. Taking into account the Power Machines shares held by OAO "TGC-1", RAO "UES of Russia" has built up a blocking stake (25% plus one share) in OAO "Power Machines".

The key goal of the Company's acquisition of a stake in Power Machines is to ensure that the power engineering company manufactures modern competitive equipment to meet the growing demand from electricity generators. This was the focal point of the Target Vision for the development of OAO "Power Machines" approved by the Board of Directors of RAO "UES of Russia" on 8 December 2006.

The programme envisages modernization and upgrade of the manufacturer's existing production capacity and construction of new facilities for the manufacture of turbines and high capacity generators. Moreover, the production increase will be significantly boosted by the improvement of process technologies and development of cooperation with Russian and foreign enterprises.

According to the Target Vision, about USD1.2 billion is expected to be spent on the development programme of OAO "Power Machines" during the period until 2013. The bulk of the demand for investments, about USD1 billion, will come in 2007 – 2010.

The Power Machines' development programme will be primarily financed through two share issues for the amount of approximately USD450 million. The first share offering is scheduled for the second half of 2007 and is expected to raise about USD250 million in funds. Moreover, the company expects to generate about $200 million in funds by implementing a production facility optimization programme. Also, it is planned to raise up to USD400 million through debt issues and credit facilities.

At today's meeting, the Board of Directors stated it is necessary to maintain the RAO UES stake in OAO "Power Machines" and acquire additional shares to be issued by the power engineering company. This will enable RAO "UES of Russia" to maintain a blocking stake in Power Machines.

The Management Board of RAO "UES of Russia" was instructed to produce and submit for Board approval, before end-June 2007, a Programme for the preparation and issuance of additional shares of OAO "Power Machines".

The Board of Directors of RAO "UES of Russia" also noted that it would be advisable to sell the Company's stake in Power Machines to a Russian investor. The shares are expected to be sold as a single lot in H1 2008.

The measures implemented under the Power Machines development programme for 2007 will help improve the power equipment manufacturer's performance indicators and create the necessary conditions for its strategic development. They will have a positive effect on the capitalization of OAO "Power Machines" and help maximize the proceeds from the sale of the stake in Power Machines held by RAO "UES of Russia".

RAO "UES of Russia" is interested in coordinating the positions of the Company and TGC-1 both at the stage of acquiring the additional shares in Power Machines, and at the stage of selling their stakes in Power Machines. In this connection, the Board of Directors of RAO "UES of Russia" instructed the Management Board to take steps needed for RAO "UES of Russia" to purchase the Power Machines shares held by OAO "TGC-1" prior the additional share issue of OAO "Power Machines".

The Management Board was also given the task to submit for consideration by the Board of Directors in April 2007 an action plan designed to improve the financial state of OAO "Power Machines". This document should include an analysis of the current situation, a detailed plan of financial restructuring measures for Power Machines and the calculation of cost of such measures, key performance indicators for the company's management until 2010, and the relevant incentive system.

* * *

The Board of Directors of RAO "UES of Russia" noted the draft investment programme of RAO "UES of Russia" for 2008 and the five-year investment programme of the RAO UES Holding. The Board of Directors charged the Management Board with submitting these documents to the relevant ministries and government agencies, taking into account their filing requirements.

The Board of Directors also instructed the Management Board to submit to the Russian Government a comprehensive programme for the development of the electricity system in the Kaliningrad Region, taking into account the refusal received from OOO "Mezhregiongas" to confirm the feasibility of supply of the amount of natural gas needed for the operation of the second power unit at the Kaliningradskaya CHPP-2.

The Company's investment programme for 2008 contains, in addition to the approval of the construction of power unit 2 at the Kaliningradskaya CHPP-2, two more investment projects, viz. completion of the first power unit and construction of the second unit at the Ivanovskaya TPP ("Ivanovskie PGU project") and continued implementation of the Mobile GTPPs Project in the Moscow Energy System.

The Ivanovskaya TPP will be equipped with the first Russian-made PGU-325 combined-cycle gas turbines based on high-performance gas turbines GTE-110 manufactured by OAO "Saturn Research & Production Association". When the plant construction is completed, it will supply an additional 701.7 MW of capacity to the integrated energy system in the Central Russia. On the other hand, the project will promote the series production of GTE-110 gas turbine unit, which is paramount for the transition to the new technology. Power Unit 1 of 325 MW at the Ivanovskaya TPP is scheduled to become operational in the autumn of 2007, and Power Unit 2 is expected to go on line in 2009.

The Mobile GTPPs project provides for the installation of 10 mobile gas turbine power plants of 22.5 MW each. The project is intended to ensure reliable power supply during the 2006-2007 and 2007-2008 autumn/winter peak loads in the Moscow Energy System. By now, two power plants have been put into operation at the Daryino 110 kV substation, which increased the reliability of the power supply to customers in the western areas of the Moscow Energy System during the frosty spell in February 2007. During the year, similar power units will be installed at three 110 kV substations, Rublevo SS, Syrovo SS, and Pushkino SS. In 2008, RUB3.4 billion in funds will be designated for lease payments to ensure that the GTPPs go on line in 2007.

* * *

The Board of Directors of RAO "UES of Russia" noted the information on the measures to put in place a mechanism to control effective use of the proceeds from the WGC and TGC issues.

A process is underway to issue additional shares of generation companies, pursuant to resolutions of the Board of Directors of RAO "UES of Russia". As a result of such share issues, the stake of RAO "UES of Russia" in these companies is gradually diluted. In some cases, the additional share issues will result in the control over WGCs and TGCs passing to strategic investors. Accordingly, an effective and proper use of funds for investment programmes at such WGCs and TGCs will be possible only if both old and new shareholders of the respective generation company are involved in the process on a coordinated basis.

This made it necessary to introduce a corporate mechanism of ensuring that the proceeds from the WGC and TGC share offerings or sale are used for their designated purpose. At its meeting held 23 June 2006, the Board of Directors of RAO "UES of Russia" instructed the Management Board to develop such a mechanism.

In the course of work on the task, the Management Board reviewed several options, which include signing an investment memorandum, signing a shareholders' agreement under English or Russian law, signing a general partnership agreement, or issuing bonds convertible into shares. Yet, none of the above options alone provides absolute legal guarantees that the investment programme will be implemented.

A possible way to control the use of the funds raised through the additional share offerings of WGCs and TGCs is to combine two of the above methods.

Before holding an auction, it is expected that RAO "UES of Russia" and all potential investors will sign an Investment Memorandum which sets forth the goals and parameters of the approved investment programme of the WGCs and TGCs, including the timing and amount of generation capacity to be brought on line.

This document provides that an investor should declare its intention to use the proceeds from the sale additional shares in a WGC or TGC to finance the respective company's investment programme and to use its best endeavours to cause it to be completed. The key decisions relating to the implementation of the generation company's investment programme should be taken upon reaching agreement of all parties to the Memorandum. In addition, before the investment programme is completed, an investor may not dispose of its holdings in the respective WGC or TGC, unless the new shareholder agrees to sign the Memorandum.

After the additional WGC and TGC share offerings, RAO "UES of Russia" and the investor will sign an agreement governing their relationships in managing the company with respect to its investment programme.

It is planned that one of the key provisions of the Agreement will be the undertakings by the parties to seek mutual approval of the issues relating to the implementation of the investment programme as a measure to protect all shareholders in the respective WGCs and TGCs.

The Agreement may provide that the WGC or TGC concerned will retain a Technical Agent whose responsibility will be to ensure that the deadlines, specifications, and the construction quality requirements are observed, and that the funds are used only for their designated purposes. The Technical Agent is also required to report on a quarterly and monthly basis on the progress in the investment programme implementation and any violations in the process to the Board of Directors and the executive body of the WGC or TGC concerned.

The Agreement may provide for the possibility to engage, on a competition basis, EPC/EPCM contractors to implement investment projects , and enter into turnkey construction contracts providing for a fixed price and deadline. The EPC/EPCM contractor will be required to provide to the WGC or TGC concerned the financial guarantees of due performance of the contract, whereas the generation company, in its turn, will guarantee timely and full financing of the construction.

The Board of Directors of RAO "UES of Russia" instructed the Management Board, in light of the discussion and proposals produced by the Strategy and Reform Committee, to review the mechanism to control effective use by the WGCs and TGCs of the proceeds from the sale of additional share issues which will ensure implementation of the approved five-year investment, and submit these proposals for consideration by the Board of Directors at the next Board meeting. When reviewing the mechanism, the RAO UES Management Board is to provide for the possibility of and the mechanism for making adjustments to the investment programmes in the event of significant changes in the economic environment, for instance, the pace of liberalization of the electricity market, gas prices, or significant increase or decrease in electricity use. The Board of Directors expressed an opinion that the control mechanism should fully guarantee that the new shareholders have a possibility to implement measures designed to ensure a most effective use of the proceeds from the additional share offerings designated for investment programmes.

* * *

The Board of Directors of RAO "UES of Russia" stated that it would be advisable to use the proceeds from the sale of shares in energy retail companies' (ERCs) in 2007 to pay the debts incurred by RAO "UES of Russia" in connection with the acquisition of 22.43% shares in OAO "Power Machines".* This measure will help reduce the amount of Company's accounts payable and optimize its balance sheet structure in the course of the Company's reorganization.

The Company will use for the purpose the funds generated by the sale of the ERC shares owned by RAO "UES of Russia", less the expenses relating to the sale of such assets, including full payment of taxes, appraisal and auction costs, and other required payments.

At its meeting of 8 December 2006, the Board of Directors of RAO "UES of Russia" approved in principle the divestment by the Parent Company of its shares in the ERCs. The principal method to be used for the disposal of ERC shares will be their sale through a public auction with the reserve price not lower than the fair market value determined by an independent appraiser. It is planned that the energy retail companies will be disposed of before RAO "UES of Russia" is reorganized in 2008.

At the Board meeting of 9 February 2007, the Board of Directors of RAO "UES of Russia" approved the sale of the first 8 shareholdings in energy retail companies: Belgorod ERC, Vologda ERC, Kolskaya ERC, Kuban ERC, Nizhny Novgorod ERC, Orenburg ERC, and Sverdlovsk ERC. The specific dates for auctions are expected to be announced in April 2007.

The Board of Directors instructed the Board of Directors to submit for consideration by the Board of Directors at the May meeting information on the sale of the Company's non-core assets, including the expected amounts and timing of the proceeds from such sale.

* Pursuant to the action of the Board of Directors of 4 October 2005, RAO "UES of Russia" acquired a 22.43% stake in OAO "Power Machines" in December 2005. The price tag of the deal was USD101.4 million with the upper end of the market value of USD107 million as determined by an independent appraiser, ZAO "KPMG", and approved by the Board of Directors. The Board of Directors of RAO "UES of Russia" resolved that the acquisition would be financed with borrowed funds and the proceeds received by RAO "UES of Russia" and its subsidiaries from the sale of their non-core assets. As a result, taking into account the stake in OAO "Power Machines" held by OAO "TGC-1", RAO UES Holding built up a blocking stake (25 percent plus one share) in Power Machines.

* * *

The Board of Directors also noted the report on the distribution of the funds received by RAO "UES of Russia" from the sale of its shareholdings in OAO "Taymyrenergo" and OAO "Yaroslavl Retail Company".*

According to the report, the RUB7.7 billion received from the sale of shares in the companies, less all required taxes and other payments, as well as appraisal and auction costs were used to finance the investment programmes of RAO "UES of Russia", namely, the project of the Boguchansk Energy and Metallurgical Association**, by contributing RUB5.13 billion (USD190 million) in funds to the capital of OAO "HydroWGC"; the preparation of feasibility studies and audits of six projects within the framework of the guaranteed investment mechanism, and the activities relating to the reorganization of the Parent Company, RAO "UES of Russia".

Such use of the proceeds is in strict accordance with the previous resolutions adopted by the Board of Directors of RAO "UES of Russia".

** The project involves the completion of the Boguchanskaya HPP on the Angara River, and the construction of an aluminium smelter, which will be a key consumer of the electricity generated by the plant. The project is being implemented, on a parity basis, by OAO "HydroWGC" and OAO "RUSAL".

* * *

The Board of Directors of RAO "UES of Russia" approved the sale of repair workshop facility under construction in the city of Sochi through auction. The reserve price was set equal to RUB76.9 million, i.e. the fair market value of the property determined by the independent appraiser, OOO "AKF Top-Audit".

The repair workshop construction was undertaken in 1996-2000 as part of the project to build the Tsentralnaya – Psou 500 kV HV line. However, afterwards, the workshop construction was stopped for lack of practical need. As OAO "UES FGC" is not interested in purchasing and operating this facility, it will be sold as a single lot through a public auction with open bidding.

* * *

The Board of Directors of RAO "UES of Russia" approved the divestiture by the Company of its holding of 40,004 ordinary shares (100% of the authorized capital) in OAO "Corporate Governance Institute".

This resolution was taken in pursuance of the strategy being implemented by RAO "UES of Russia" to divest its non-core assets. The Institute is currently engaged in consulting and training activities, in particular, in particular, provides legal, advertising, and marketing services in the area of corporate governance and business.

The fair market value of the 100 percent stake in OAO "Corporate Governance Institute" determined by an independent appraiser is RUB1,081,000.

The sale of OAO "Corporate Governance Institute" is subject to approval of the deal by the Russian Federation Government. The reason is that the shares of the Institute were contributed to the authorized capital of RAO "UES of Russia" at the time of its establishment. The Company's Charter and the Russian Federation President's Decree of 5 November 1992 provide that such shares may be sold, contributed by RAO "UES of Russia" to the capital of the energy companies to be established or otherwise disposed of within the timeframe, in the manner and on the conditions to be approved by the Russian Federation Government.

* * *

The Board of Directors of RAO "UES of Russia" approved the completion of the establishment of OAO "TGC-2" through the merger of OAO "Arkhangelsk Generation Company" with and into TGC-2.

By now, TGC-2 has completed the first phase of its establishment which involved the merger of OAO "Vologodskaya CHPP", OAO "Kostroma Generation Company", OAO "Novgorod Generation Company", OAO "Tver Generation Company", and OAO "Yaroslavl Energy Company" with TGC-2. The final phase of TGC-2 establishment provides, inter alia, for the merger of OAO "Arkhangelsk Generation Company" with TGC-2.

Earlier, the merger of Arkhangelsk Generation Company with TGC-2 was suspended due to the company's unfavourable financial situation caused by a hike of fuel oil prices and the difference between the de-facto fuel prices and the prices envisaged by the power rates.

In order to rectify the situation, the Management Boards of RAO "UES of Russia" and TGC-2 produced a plan of measures which helped significantly reduce and stabilize the fuel price for the power plants controlled by OAO "Arkhangelsk Generation Company", and bring the cost of electricity generated by them in line with the average wholesale price of electricity and ensure the company' stable long-term position on the electricity market.

Today, all conditions are in place for improving the financial position of Arkhangelsk Generation Company and ensure its operation in the black in 2007 and onwards.

This paves the way for the company's merger with TGC-2, which will complete the second phase of TGC-2 reorganization.

It is planned that OAO "Arkhangelsk Generation Company" will merge with TGC-2 no later than June 2007.

The creation of a unified operating company through merger will help expand the scope of TGC-2 operations, improve its financial strength, secure a higher credit rating and reduce the cost of debt service.

* * *

The Board of Directors of RAO "UES of Russia" approved the modifications to the model for consolidation of the facilities comprising the Unified National Energy Grid ("UNEG"), presented by the Management Board.

It was previously planned that the process will be implemented stepwise. During the first stage, it was planned to merge 56 transmission companies ("trunk grid companies", or "TCs") and the 6 interregional transmission companies ("ITCs") established as a result of RAO UES restructuring with and into OAO "Center ITC". The final stage would see the merger of the consolidated company, OAO "Center ITC" with and into OAO "UES FGC".

However, after the Board of Directors of RAO "UES of Russia" approved the conceptual approach for the second phase of the Company's reorganization at the Board meeting held 2 March 2007,* it was decided that a more advantageous approach would be to merge the TCs and ITCs with and into OAO "UES FGC" as a single step transaction, provided that the Government maintains at least 75 percent plus 1 share in OAO "UES FGC" as a result of transfer of the required number of generation companies' shares to the "State Holding".

This model for consolidation of the UNEG assets was discussed with and received the support of TCs' shareholders. It will help ensure that all UNEG assets of RAO UES Holding are consolidated, eliminate lease relationships, and pave the way for direct investment by OAO "UES FGC" in the development of TCs' regional trunk grids previously owned by the regional energos.

The Board of Directors instructed the Management Board of RAO "UES of Russia" to produce and present other proposals on modifying the model for the final phase of RAO UES reorganization for discussion at the next Board meeting which will take place in the Company's offices. Specifically, the discussion will concern the right of minority shareholders in RAO "UES of Russia" to change the number of shares they are entitled to receive in the companies to be established as a result of the sector restructuring, and to transfer the shares held by the state in thermal WGCs and TGCs to the OAO "HydroWGC Holding" (entity to be spun off from RAO "UES of Russia"). These shares are to be sold to raise funds needed to finance the deficit of the HydroWGC investment programme. Also, the Management Board is to propose modifications to the procedure to be followed during the second phase of the Company's reorganization concerning the possibility of disposal of shares in OAO "UES SO-CDA" before the completion of the process.

The final phase of the reorganization of RAO "UES of Russia" will be implemented through spin off of "interim" companies and their simultaneous merger with the respective companies comprising the ultimate sector structure.

* * *

The Board of Directors of RAO "UES of Russia" determined the positions of the Company's representatives on the items of business to be considered by shareholder meetings and Board meetings of subsidiaries and dependent companies of RAO "UES of Russia".

* * *

The Board of Directors of RAO "UES of Russia" instructed the Company's representatives on the management bodies of OAO "TGC-11", OAO "Yeniseyskaya TGC" (TGC-13), OAO "TGC-13", OAO "Altayenergo", OAO "Kuzbassenergo", OAO "Sayano-Shushenskaya HPP", OAO "Sibirsky ENTC", and OAO "Siberia IDC", to vote for the approval of the respective companies' joining the Siberian Energy Association.

The Siberian Energy Association is being created with the direct involvement of Anatoly Kvashnin, Russian Federation Presidential Plenipotentiary Representative to the Siberian Federal Okrug, and the region's major power companies.

The Association will ensure that its members participate in the electricity industry and utilities reform, develop regulations for the activities in energy supply and provision of utilities services, and take part in comprehensive development projects in the Siberian Federal Okrug.

The participation of the subsidiaries and dependent companies of RAO "UES of Russia" in the Association will help broaden the relations between the energy industry members and the executive agencies, and receive competent organizational, information analytical and legal assistance from the Association participants needed to implement strategic programmes in the Siberian Federal Okrug.

It is also planned that the Siberian Energy Association will include OAO "Novosibirskenergo" and OAO "Irkutskenergo", the electricity producers independent of RAO "UES of Russia".

* * *

The Board of Directors of RAO "UES of Russia" instructed the Company's representatives on the Board of Directors of OAO "TGC-9" to vote for the establishment of OOO "TGC-9 Finance", an entity to support the TGC-9 stock option programme.

* * *

The Board of Directors of RAO "UES of Russia" instructed the Company's representatives at OAO "Far Eastern Energy Company" to approve the transfer of the Company's shares in repair and maintenance companies to OAO "Far Eastern Generation Company" for fiduciary management. This step is designed to improve operational efficiency of the generation company, which is particularly interested, being a consumer of the R&M services, in cutting its expenses relating to equipment repairs and maintenance.

* * *

The Board of Directors of RAO "UES of Russia" instructed the Company's representatives on the Board of Directors of OAO "WGC-6" to vote for placing on the shareholder meeting agenda a proposal to terminate the office of the current WGC-6 Board of Directors and to elect new Board members.

The election of new Board members is necessary due to the appointment the WGC-6 Board member, Boris Vainzikher, the Director General of OAO "Power Machines", which made it impossible for Mr. Vainzikher to take part in the activities of the WGC-6 Board of Directors.

* * *

The Board of Directors instructed the Management Board to sell 9,309,706,683 shares in WGC-3 (19.7% of the WGC-3 capital after the additional share offering) held by RAO "UES of Russia" and the Government at a price not lower than the price of WGC-3 additional shares.* The method for the share sale should take into account the cost of arranging the sale of the shares.

The Management Board of RAO "UES of Russia" is to present a progress report on the sale of WGC-3 shares at the next Board meeting, and to submit proposals on the possible uses of the proceeds from the sale.

As provided by the Russian legislation, within 35 days upon acquisition of WGC-3 shares, Norilsk Nickel Group is to make an offer to WGC-3 shareholders to buy their shares at a price not lower than the price of the last additional share offering.

* * *

The Board of Directors of RAO "UES of Russia" approved holding an auction to sell at least 25 percent plus 1 share in OAO "WGC-5"*, subject to approval of WGC-5 reorganization by the shareholder meeting of OAO "WGC-5".

At one of its previous meetings held 27 October 2006, the Board of Directors of RAO "UES of Russia" instructed the Management Board to explore the advantages and disadvantages of different scenarios for key corporate actions designed to reorganize WGC-5 and RAO "UES of Russia".

The Board decided that the most expedient and efficient option from the viewpoint of maximizing the sale price would be holding a general shareholder meeting of WGC-5 to approve its reorganization, and then holding a public auction to sell at least 25 percent plus 1 share in WGC-5 held by RAO "UES of Russia". It is planned that in August-September 2007, OAO "WGC-5" will be reorganized through the merger of OAO "WGC-5 Holding" with and into WGC-5.

Such course of action will enable RAO "UES of Russia" to transfer its shares in OAO "WGC-5" to the buyer immediately after the auction, which is likely to have a positive effect on the ultimate purchase price. Moreover, auction participants will take their investment decisions being aware that the spin-off of OAO "WGC-5" from RAO "UES of Russia" has already been approved by the company's shareholders, which will contribute to extra favourable conditions for entering into the transaction.

The Board of Directors approved in principle the auction sale of at least 25 percent plus 1 share in WGC-5 held by RAO "UES of Russia" at its meeting held 9 February 2007. The auction is expected to be held in on 6 June 2007, i.e. after the expiration of the lock-up period on the sale of shares which started on 10 November 2006 (no less than 6 months after the WGC-5 public offering).

The shares will be sold as a single lot through a public auction to be arranged by an independent agent. The auction reserve price will be equal to the fair market value of RUB24.658 billion determined by an independent appraiser.** After the sale, the interest of RAO "UES of Russia" in OAO "WGC-5" will decline to 50 percent from 75.03 percent.

The cash proceeds from the sale of at least 25 percent plus 1 share will be used to finance the respective investment programmes of OAO "UES FGC" and OAO "HydroWGC", and to create a reserve for the reorganization of RAO "UES of Russia".

Currently, corporate actions are underway to spin off OAO "WGC-5 " and OAO "TGC-5" from RAO "UES of Russia", which is part of the first stage of the Parent Company's reorganization. It is planned that the shareholder meeting of WGC-5 to approve the company reorganization will be held in June 2007, and the spin off procedures will take place in August-September 2007.

** On 21 December 2006, the RAO UES Appraisal Committee considered an independent appraiser's valuation report and recommended to use it for setting the auction reserve price.

* * *

Information in this part of the press release is not intended for distribution in Australia, Canada, Japan or the United States of America.

The Board of Directors of RAO "UES of Russia" approved the proposals on the preparation for carrying out additional share issues by OAO "WGC-1", OAO "WGC-2", OAO "Southern Generation Company – TGC-8" ("SGC TGC-8"), and OAO "Kuzbassenergo" ("TGC-12").

This issue was considered in connection with the resolution taken by the Board of Directors of RAO "UES of Russia" on 29 September 2006, in which the Company identified the "second-tier" projects to issue additional shares of WGCs and TGC in order to raise capital needed for development of thermal generation facilities.

By issuing these shares, OAO "WGC-1", OAO "WGC-2", OAO "SGC TGC-8", and OAO "Kuzbassenergo" (TGC-12) primarily seek to raise funds to finance their investment programmes to construct new and upgrade the existing capacity.

Specifically, WGC-1 plans to use the proceeds to finance a number of projects, such as construction of a 300 MW power unit with a circular fluidized-bed (CFB) boiler at the Verkhne-Tagilskaya TPP, completion of a power unit based on PGU-800 combined cycle gas turbine at the Permskaya TPP, and reconstruction of power unit 3 of 330 MW at the Kashirskaya TPP-4.

The WGC-3 investment programme provides for the construction of two new power units with the aggregate capacity of 1320 MW to replace the existing units at the Troitskaya TPP, and construction of two new power units based on the PGU-400 combined cycle gas turbine at the Stavropolskaya TPP.

The proceeds from the additional share issues of SGC TGC-8 will be used to finance the capacity expansion projects at the Astrakhanskaya TPP, providing for the installation of PGU-110 CCGTs, the renovation project at the Krasnodarskaya CHPP (installation of PGU-410 CCGTs), and a capacity expansion project at the Astrakhanskaya CHPP-2 (installation of PGU-410 CCGTs).

The additional share issue by Kuzbassenergo (TGC-12) is intended to raise funds for financing the construction of replacement capacity at the Novokemerovskaya CHPP and Tom-Usinskaya TPP.

The investment projects to be implemented by the above generation companies will be also financed from the depreciation reserves, retained earnings and borrowings.

The Board of Directors of RAO "UES of Russia" instructed the Management Board of the Company to submit for consideration at the next Board meeting a mechanism designed to determine an optimal quantity of additional shares to be issued by WGCs and TGCs so as to ensure implementation of their investment programmes, taking into account the results of the share offerings completed by OAO "WGC-5" and OOA "WGC-3".

In addition, the Board of Directors gave the Management Board the task to submit for consideration by the Board proposals regarding the share offerings of WGC-1, WGC-2, SGC TGC-8, and Kuzbassenergo (TGC-12), as well as proposals designed to ensure that the WGC and TGC offering proceeds are used only for their designated purposes.

The Board of Directors of RAO "UES of Russia" also approved the joint project of WGC-1 and TNK-PB to construct power unit 3 of 800 MW at the Nizhnevartovskaya TPP. The two companies plan to establish a joint venture to implement the construction project.