Moscow. 21 October 2004. OAO RAO "UES of Russia" has fully and timely paid the interest in respect of the fourth coupon period of its Series 2 interest-bearing bonds in the amount of RUB225.63 million.

Under the terms of the bond issue, the coupon rate is 15% per annum. The coupon amount is RUB75.21 per bond of RUB1,000 par value. The paying agent and underwriter for the issue is TRUST Investment Bank.

The bonds carry six coupons with the interest rate of 15% per annum. The previous three coupons for a total amount of RUB674.37 million were paid in full and in a timely manner. On 22 October 2003, RAO "UES of Russia" made an annual offer of early redemption of the bonds at 102.36% of the par (RUB1,023.6 per bond), but none of the investors has accepted that offer.

The resolution to issue RUB3 billion in bonds was approved by the Board of Directors of OAO RAO "UES of Russia" at the meeting held 21 June 2002. The bonds were floated on the MICEX on 22 October 2002. The bond placement report was registered with the FCSM on 19 November 2002. The maturity period of the bonds is 1,095 days, with the maturity date of 21 October 2005.

The funds raised through the bond issue will be used to finance the current activities of the Company.