On March 4, 2004, the Board of Directors of OAO Mosenergo («Mosenergo» or the «Company») considered general principles for restructuring of the Company. In accordance with the overall restructuring plan for the Russian electrical energy sector, the restructuring of the Company aims to separate monopolistic and competitive lines of business and improve operating efficiency. Mosenergo’s Board of Directors also considered a proposed timetable for implementing the proposed restructuring. The decision of Mosenergo’s Board of Directors followed the decision of January 30, 2004 by the Board of Directors of RAO UES on the same topic.

Description of the Proposed Restructuring

The general principles adopted by the Board of Directors involve the spin-off of new companies from Mosenergo. Mosenergo will become primarily generating company and will retain most of the Company’s generating assets. The new companies to be created within the restructuring will comprise one electricity transmission company, two electricity distribution companies, one electricity supply company, one heat distribution company, four power generating plants, one management company and three maintenance and repair businesses. Shares of the new companies will be distributed to the shareholders of Mosenergo on a pro rata basis.

In late April 2004, Mosenergo’s Board of Directors expects to submit materials on the restructuring to shareholders for approval at the General Meeting of Shareholders to be held at the end of June. The proposed restructuring is expected to be based on a separation balance sheet for Mosenergo as of December 31, 2003.

It is expected that the organizational shareholder meetings for each of the thirteen new companies will be held in November 2004 and that the state registration of these companies will be completed by December 31, 2004.

Description of the Companies that Will Result Following the Proposed Restructuring

The restructuring will give rise to the following fourteen companies:

OAO Mosenergo – Moscow Generation Company. It is expected to retain most of the Company’s generating assets and to hold 40-45% of the Company’s total assets representing approximately 10, 606 MW of electrical capacity and 34, 227 Gcal/hr of heat capacity. Mosenergo is expected to be one of the largest territorial generation companies in the restructured Russian electricity industry. The company will engage in the generation of electricity and heat energy and the sale of electricity on a wholesale basis.

OAO Moscow Region Electricity Network Company. It is expected to comprise Mosenergo’s electricity distribution facilities in the Moscow Region. The company will engage in electricity distribution using approximately 72,000 km of primarily above-ground distribution lines.

OAO Moscow City Electricity Network Company. It is expected to comprise Mosenergo’s electricity distribution facilities within the City of Moscow (assets of Moscow Cable Network Company, subsidiary of OAO Mosenergo). The company will engage in electricity distribution using approximately 55,000 km of primarily underground distribution lines.

OAO Moscow City Heating Network Company. It is expected to comprise Mosenergo’s heat transmission and distribution facilities within the City of Moscow. The company will engage in transmission and distribution of heat energy (steam and hot water) in Moscow City using approximately 2,400 km heat trunk lines and distribution pipe.

OAO Trunk Grid Company. It is expected to comprise Mosenergo’s high voltage electricity transmission facilities. The company will engage in electricity transmission using approximately 6, 000 km of high voltage lines.

OAO Mosenergosbyt - Supply Company. It is expected to comprise the Company’s electricity supply operations, buying and selling electricity to consumers in Moscow City and the Moscow Region.

OAO Energy Management Company. It is expected to perform the functions of an executive body for Mosenergo and most of the new companies to be created under management services contracts with these companies.

OAO GRES 4. It is expected to comprise Mosenergo’s Kashirskaya power plant representing approximately 1,580 MW of electrical capacity and 385 Gcal/hr of heat capacity. OAO GRES 4 will engage in the generation of electricity and heat energy, the transmission and sale of heat energy, and the sale of electricity on a wholesale basis.

OAO GRES 5. It is expected to comprise Mosenergo’s Shaturskaya power plant representing approximately 1,100 MW of electrical capacity and 344.3 Gcal/hr of heat capacity. OAO GRES 5 will engage in the generation of electricity and heat energy, the transmission and sale of heat energy, and the sale of electricity on a wholesale basis.

OAO GRES 24. It is expected to comprise Mosenergo’s Ryazanskaya power plant representing approximately 310 MW of electrical capacity. OAO GRES 24 will engage in the generation of electricity and the sale of electricity on a wholesale basis.

OAO Zagorskaya GAES. It is expected to comprise Mosenergo’s Zagorskaya pumped storage hydroelectric plant representing approximately 1,200 MW of electrical capacity. OAO Zagorskaya GAES will engage in the generation of electricity and the sale of electricity on a wholesale basis.

OAO Specialized Design Bureau for Repair and Modernization. It is expected to comprise Mosenergo’s repair and construction development services. The company will engage in the development of design and project documentation for projects related to repair and construction of various electrical and heating facilities and networks.

OAO Mosteplosetenergoremon. It is expected to comprise some of Mosenergo’s repair facilities. The company will engage in the repair and laying of heat trunk lines.

OAO Mosenergosetstroi. It is expected to comprise Mosenergo’s construction and certain repair facilities. The company will engage in the long-term construction and repair of high voltage lines and sub-stations.

In addition to these fourteen companies, Mosenergo is expected to establish a further ten companies which will comprise the remainder of its maintenance, service and repair businesses and a further three companies which will comprise certain non-commercial operations. Seven of these maintenance, service and repair businesses and the non-commercial entities are expected to become subsidiaries of OAO Mosenergo – Moscow Generation Company while the remaining three maintenance, service and repair companies are expected to become subsidiaries of OAO Moscow Region Electricity Network Company.

Possible Future Transactions Relating to the Proposed New Companies

It is proposed that, following the restructuring of the Company and the creation of the thirteen new companies,

1. The generating assets of OAO GRES 4, OAO GRES 5, OAO GRES 24 would be integrated into Wholesale Generation Companies No. 1, No. 5 and No. 6 respectively and Zagorskaya GAES would become Wholesale Generation Company No. 10;
2. The OAO Trunk Grid Company would be integrated into the ‘Centre’ Interregional Transmission Company;
3. The Government of Moscow would offer to exchange shares in Mosenergo and certain of the thirteen new companies created for shares held by other shareholders in OAO Moscow City Heating Network Company and OAO Moscow City Electricity Network Company; and
4. OAO Moscow City Heating Network Company and OAO Moscow City Electricity Network Company may each issue additional shares to the Government of Moscow through a private offering and OAO Moscow Region Electricity Network Company may issue additional shares to the Government of Moscow Region through a private offering.

It is expected that, following the consummation of the above transactions, RAO UES will distribute to its shareholders the shares RAO UES holds in OAO Mosenergo - Moscow Generation Company, OAO Moscow Region Electricity Network Company and three repair companies.

In addition, it is proposed that the ten maintenance, service and repair businesses established as subsidiaries of OAO Mosenergo – Moscow Generation Company and OAO Moscow Region Electricity Network Company will be sold by these companies following the restructuring.

Trading and Listing of Shares in the Proposed New Companies

Following state registration of the new companies, the shares will be distributed to the Company’s shareholders and registered with the

Russian Federal Service for Financial Markets*. The shares of the new

companies are expected to become tradable within approximately 30 to 60 days following submission of applications for the registration of their shares with the Federal Service for Financial Markets. It is expected that each of the new companies will apply for trading and listing on RTS and MISEX. It is also expected that, in the second half of 2005, the boards of directors of the new companies will consider the feasibility of establishing an American Depositary Receipt facility in respect of their shares.

It is expected that Mosenergo shares will continue to trade in their current form and, after the state registration of the new companies, would reflect OAO Mosenergo – Moscow Generation Company’s remaining assets and business operations.

Summary Expected Timetable

The expected timetable of key events related to Mosenergo’s restructuring is as follows:

It is expected that the Mosenergo Shareholders Meeting will approve the spin-off at the end of June 2004.

State registration of each of the newly established companies is expected to be accomplished by the end of December 2004**.

Registration of each of the newly established companies’ shares is expected in early Spring 2005**, followed by listing of the shares of the new companies in May 2005**

Regulatory authorization to establish ADR programs will be sought during Summer 2005**.

Exchange of shares in OAO Moscow City Heating Network Company and OAO Moscow City Electricity Network Company for Government of Moscow’s shares in other companies is expected during Autumn 2005**

Possible share issuances in OAO Moscow City Heating Network Company, OAO Moscow City Electricity Network Company

and OAO Moscow Region Electricity Network Company through private offerings to Government of Moscow and Government of Moscow Region, respectively, are expected at the beginning of 2006**.

Following the spin-off, direct participation of RAO UES’ shareholders in OAO Mosenergo –Moscow Generation Company, OAO Moscow Region Electricity Network Company and the maintenance and repair companies; the integration of OAO GRES 4, OAO GRES 5 and OAO GRES 24 into the Wholesale Generation Companies; and the integration of OAO Trunk Grid Company into the Central Interregional Transmission Company are expected at dates that are yet to be determined**.

Further Information

Further information regarding Mosenergo, its business and operations, the proposed restructuring, and Mosenergo’s Board of Directors resolutions can be found on the Company’s website at https://www.mosenergo.ru.

Mosenergo’s Board of Directors intends to make available to the Mosenergo shareholders additional details concerning the proposed restructuring in advance of the shareholders’ meeting to be held at the end of June, 2004.

Investor Enquiries:

Alexey Zharikov
Head of Securities Department
Telepnone #: (7-095) 957 37 67
zharikov@ocb.gd.mosenergo.elektra.ru

Press Enquiries:

Mikhail Korotkov
Head of Government and Mass Media Relations Department
Telepnone #: (7-095) 957 33 95
korotkov@mosenergo.elektra.ru

*according to the Decree of the President of the Russian Federation of March 9, 2004 the control and oversee functions of the Russian Federal Commission for the Securities Market (FCSM) were inherited by the Federal Service for Financial Markets

** subject to actions by other parties