Moscow, 24 October 2006. RAO "UES of Russia" and the Kamchatka Region Administration have signed an Agreement on cooperation in development of the region's electricity sector and reducing its dependence on external fuel supplies. The Agreement was signed by the Kamchatka Region Governor Mikhail Mashkovtsev, Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais, and Director General of OAO "Far Eastern Energy Management Company"* Victor Myasnik.

The parties agreed to join efforts in order to implement the investment programmes for energy facilities construction and modernization designed to improve the reliability of power to customers in the Kamchatka region, reduce the reliance on fuel brought over from the mainland, and increase the efficiency of electricity production and consumption.

In order to achieve these objectives, it is planned to increase the share of renewable energy sources, in particular, exploit the region's geothermal and hydro power resources. In addition, the parties will take steps to facilitate the development of Kamchatka's natural gas fields.

Under the Agreement, the Kamchatka Region Administration will set electricity and heat tariffs taking into account the investment component, including the cost of services and borrowing costs.

In their turn, in Q1 2007, RAO "UES of Russia" and OAO "Kamchatskenergo" will submit for approval by the Kamchatka Region Administration, the Programme of reconstruction and development of the region's electricity sector.