Moscow, 3 September 2004. The Board of Directors of RAO "UES of Russia" unanimously approved the establishment of OAO "TGC-9" and OAO "TGC-14", wholly owned subsidiaries of RAO "UES of Russia".

The creation of operating companies of TGC using lease arrangements involves the establishment of large operating companies participating in the wholesale electricity market in parallel with reorganization of the regional energos. The TGCs using lease arrangements are to be organized within 4 months after the state registration of the respective company. In the process of formation of TGCs, regional energos will transfer generating assets to them under a lease agreement. The agreements for pilot TGCs will remain in effect until the year-end 2005 (without automatic prolongation). Under the lease agreement, a TGC will receive the right of possession and use of the regional energos' generating assets. These rights will be transferred to the TGC after it obtains preliminary consent of Russia's Federal Antimonopoly Service, receives the required licenses and permits, and is granted the status of a wholesale market participant. Besides, the tariffs for heat and electricity are to be set, and new fuel supply contracts are executed.

After the regional energos are reorganized through spinoff, Regional Generation Companies will be created, with the regional energos' ownership structure unchanged. Under the separation balance sheet, the generation assets, accounts payable and receivable, contracts of lease of generating assets, and other assets and liabilities will be transferred to the RGCs.

After the separation of all regional energos registration of the last RGC that is part of the TGC, it is planned to merge RGCs with and into the respective TGC, which will result in the establishment of a unified Territorial Generation Company. Simultaneously, the lease agreements will cease to be effective.

Establishment of a TGC using a lease arrangement was suggested by minority shareholders of RAO "UES of Russia" and regional energos. The principal advantage of creating TGCs using lease arrangements is the short time needed to form a unified operating company. If the scenario for the creation of a unified operating company through merger or creation of a holding company were used, a TGC would be formed not earlier than in 11 months after the registration of the last RGC relating to that TGC. This means that the first TGCs in form of operating companies could emerge in the 4^thquarter of 2005. If TGCs are created using the leasing scenario, operating companies will be formed as early as late 2004 or early 2005, i.e. a year earlier than using the creation of TGCs through merger or formation of a holding company.

The Board of Directors resolved that the merger of RGCs with and into the TGCs is to start not later than 6 months after the formation of the last RGC being included into the respective TGC.

Creation of two first TGCs using lease arrangements provides for the establishment by OAO RAO "UES of Russia" of a wholly owned company (TGC), following which OAO RAO "UES of Russia" will pay 50% plus one voting share of the Company's authorized capital. The shares not paid for will be held by the TGC, and then shareholders of regional energos, except for RAO "UES of Russia", will be invited to purchase 50% minus one share. Shares in the TGC will be sold on condition that they are paid in cash at par value.

The Board of Directors of RAO "UES of Russia" commissioned the Management Board of RAO "UES of Russia" to ensure that the Board meetings of the generation companies being created in the course of restructuring (i.e. RGCs, TGCs, WGCs) consider the item "On priority lines of activity". The RGCs and TGCs are to supply electricity to the regional retail market where the respective power plants owned by the generation companies are located until they become participants of the wholesale electricity market, and the consequences of their operation on the wholesale market are taken into account when setting the maximum tariffs for heat and electricity supplied by energy providers or energy retail companies to consumers, including the tariffs for households and regional tariffs.

The Board of Directors of RAO "UES of Russia" approved the establishment by RAO "UES of Russia" of a wholly owned subsidiary, OAO "TGC-9", on the following conditions:

• the authorized capital of OAO "TGC-9" is RUB4,200,000 (four million two hundred thousand Rubles) divided into 1,400,000,000 (one billion four hundred million) registered ordinary shares, par value RUB0.003 (three thousandths of one Ruble) per share;
• the shares are to be paid for within one month after the state registration of OAO "TGC-9";
• Payment for the shares by RAO "UES of Russia" shall be made in cash.

The Board of Directors of RAO "UES of Russia" approved the lease of the generation assets owned by OAO "Permenergo" and OAO "Sverdlovenergo" to OAO "TGC-9".

The Board of Directors commissioned the representatives of OAO RAO "UES of Russia" to vote for the approval of the necessary resolutions on the items of business of Board meetings of OAO "TGC-9" relating to the change in the stake held by RAO "UES of Russia" on the following conditions:

• the method to be used to change the shares held by OAO "TGC-9: the sale by OAO "TGC-9" of its shares acquired by the Company as a result of incomplete payment of consideration for them at the time of establishment, which shares will be sold to minority shareholders of OAO "Permenergo" and OAO "Sverdlovenergo" in proportion to the number of shares in the respective regional energo held by those shareholders. Shares in OAO "TGC-9 " are to be paid in cash.
• The stake in the authorized capital of OAO "TGC-9" held by RAO "UES of Russia" in the event that OAO "TGC-9" sells the shares in its possession shall be not less than 50% plus one voting share.

The Board of Directors of RAO "UES of Russia" approved the establishment by RAO "UES of Russia" of a wholly owned subsidiary, OAO "TGC-14", on the following conditions:

• the authorized capital of OAO "TGC-14" is RUB3,100,000 (three million one hundred thousand Rubles) divided into 3,100,000,000 (three billion one hundred million) registered ordinary shares, par value RUB0.001 (one thousandth of one Ruble) per share;
• the shares are to be paid for within one month after the state registration of OAO "TGC-14";
• Payment for the shares by RAO "UES of Russia" shall be made in cash.

The Board of Directors of RAO "UES of Russia" approved the lease of the generation assets owned by OAO "Buryatenergo" and OAO "Chitaenergo" to OAO "TGC-14".

The Board of Directors of RAO "UES of Russia" recommended that the Company's representatives vote for the approval of the necessary resolutions on the items of business of Board meetings of OAO "TGC-14" relating to the change of the stake held by OAO RAO "UES of Russia" on the following conditions:

• the method to be used to change the stake held by OAO "TGC-14" in the Company's authorized capital: the sale by OAO "TGC-14" of its own shares acquired by the Company as a result of incomplete payment of consideration for them at the time of establishment, which shares will be sold to minority shareholders of OAO "Buryatenergo" and OAO "Chitaenergo" in proportion to the number of shares in the respective regional energo held by those shareholders. Shares in OAO "TGC-14" are to be paid in cash.
• The stake in the authorized capital of OAO "TGC-14" held by OAO RAO "UES of Russia" in the event that OAO "TGC-14" sells the shares in its possession shall be not less than 50% plus one voting share.

The Board of Directors of RAO "UES of Russia" instructed the representatives of OAO RAO "UES of Russia" on the Boards of Directors of the regional energos and TGCs to vote FOR the approval of the resolutions on this item.

* * *

The Board of Directors of RAO "UES of Russia" approved the establishment by RAO "UES of Russia" of a wholly owned subsidiary, OAO "WGC-5"*, on the following conditions:

• the authorized capital of OAO "WGC-5" shall be RUB29,407,170,459 (twenty-nine billion four hundred and seven million one hundred and seventy thousand four hundred and fifty-nine Rubles);
• category, type, par value of shares to be placed at the time of establishment of the company: registered ordinary shares, par value RUB1 (one Ruble) per share;
• the number of shares to be placed: 29,407,170,459 (twenty-nine billion four hundred and seven million one hundred and seventy thousand four hundred and fifty-nine shares);
• the interest in the authorized capital of OAO "WGC-5" held by OAO RAO "UES of Russia" shall be 100%.
• period for payment of the shares: within three months after the date of state registration of OAO "WGC-5";
• Form of payment for the shares:
• property:
• 43,670,168 (forty-three million six hundred and seventy thousand one hundred and sixty-eight) registered ordinary shares of OAO "Nevinnomysskaya TPP", par value RUB10 (ten Rubles) per share;
• 206,051,742 (two hundred and six million fifty-one thousand seven hundred and forty-two) registered ordinary shares of OAO "Konakovskaya TPP", par value RUB1 (one Ruble) per share;

property of the Reftinskaya TPP and Sredneuralskaya TPP, and funds in the amount of RUB4,228,964,180 (four billion two hundred and twenty-eight million nine hundred and sixty-four thousand one hundred and eighty Rubles).

The Board of Directors of RAO "UES of Russia" approved the alienation of the property of Reftinskaya TPP and Sredneuralskaya TPP owned by OAO RAO "UES of Russia" as contribution to the authorized capital of OAO "WGC-5".

The Board of Directors also approved the alienation of the following property owned by OAO RAO "UES of Russia" as contribution to the authorized capital of OAO "WGC-5":

• 43,670,168 (forty-three million six hundred and seventy thousand one hundred and sixty-eight) registered ordinary shares of OAO "Nevinnomysskaya TPP";
• 206,051,742 (two hundred and six million fifty-one thousand seven hundred and forty-two) registered ordinary shares of OAO "Konakovskaya TPP";

The Board of Directors resolved that the contribution to the authorized capital of OAO "WGC-5" in cash shall be effected by RAO "UES of Russia" within the approved level of the subscription fee of OAO RAO "UES of Russia". The Board of Directors instructed [the Management Board] to take into account, when preparing draft resolutions on the participation of OAO RAO "UES of Russia" in Wholesale Generation Companies, [the requirement] that the cash payments made by RAO "UES of Russia" as contribution to the authorized capital of the companies being established should not lead to an increase in the subscription fee of OAO RAO "UES of Russia" to a level exceeding the approved thresholds.

In accordance with the reports of the independent appraiser, the value of the property to be contributed to the authorized capital of OAO "WGC-5" has been set by the Board of Directors at RUB25,178,206,280 (twenty-five billion one hundred and seventy-eight million two hundred and six thousand two hundred and eighty Rubles), including:

• 43,670,168 (forty-three million six hundred and seventy thousand one hundred and sixty-eight) registered ordinary shares of OAO "Nevinnomysskaya TPP" valued at RUB3,409,766,717 (three billion four hundred and nine million seven hundred and sixty-six thousand seven hundred and seventeen Rubles);
• 206,051,742 (two hundred and six million fifty-one thousand seven hundred and forty-two) registered ordinary shares of OAO "Konakovskaya TPP" worth RUB2,905,329,562 (two billion nine hundred and five million three hundred and twenty-nine thousand five hundred and sixty-two Rubles);
• property of the Reftinskaya TPP valued at RUB15,376,950,000 (fifteen billion three hundred and seventy-six million nine hundred and fifty thousand Rubles);
• property of the Sredneuralskaya TPP valued at RUB3,486,160,000 (three billion four hundred and eighty-six million one hundred and sixty thousand Rubles).

The Board of Directors of RAO "UES of Russia" also resolved, on the proposal of the Strategy and Reform Committee, that the Boards of Directors of the WGCs being established must include representatives of minority shareholders.

The Board of Directors requested the Management Board of RAO "UES of Russia" to supply the Board of Directors with information on the place of registration and the composition of the executive bodies of all WGCs being established.

The Board of Directors of RAO "UES of Russia" commissioned the Management Board of RAO "UES of Russia" to ensure that the Board meetings of the generation companies being created in the course of restructuring (i.e. RGCs, TGCs, WGCs) consider the item "On priority lines of activity". The RGCs and TGCs are to supply electricity to the regional retail market where the respective power plants owned by the generation companies are located until they become participants of the wholesale electricity market, and the consequences of their operation on the wholesale market are taken into account when setting the maximum tariffs for heat and electricity supplied by energy providers or energy retail companies to consumers, including the tariffs for households and regional tariffs.

The Board of Directors of RAO "UES of Russia" instructed the representatives of OAO RAO "UES of Russia" on the Boards of Directors of AO-power plants and WGCs to vote FOR the approval of the resolutions on this item.

______________

*
Demonopolization of generation assets is a key condition for the launch of a competitive electricity market. In order to achieve that, it is necessary to ensure, within the shortest time possible, the readiness of the generation companies for the separation from RAO "UES of Russia", which actually means completion of their establishment, and, where possible, transition of each WGC to "common share" (i.e. its consolidation).

Under the Guidelines for Reforming the Electric Power Industry of the Russian Federation adopted by Resolution of the Government of the Russian Federation No. 526 of 11 July 2001, at the initial stage of the sector reform the generation companies that are participants of the wholesale electricity market are to be formed as wholly owned subsidiaries of RAO "UES of Russia".

On 26 September 2003, the Board of Directors of OAO RAO "UES of Russia" approved the "basic" method for the creation of WGCs, which envisages the transfer by RAO "UES of Russia" of the property of power plants and shares in the Federal AO-power plants as contribution to the authorized capital of WGCs at the first stage.

* * *

The Board of Directors of RAO "UES of Russia" unanimously approved the structuring plans of OAO "Samaraenergo", OAO "Saratovenergo", OAO "Ulyanovskenergo", and OAO "Orenburgenergo". The proposed restructuring plan makes it possible, with minimal risks, to unbundle the monopoly and competitive lines of business, create large interregional companies, increase efficiency of production activities and boost investment attractiveness.

Plan provides for:

co-establishment by OAO "Samaraenergo", OAO "Saratovenergo", OAO "Ulyanovskenergo" of interregional production companies integrated by lines of business:

• OAO "Volzhskaya Territorial Generation Company", with generation and heating network assets of OAO "Samaraenergo", OAO "Saratovenergo", OAO "Ulyanovskenergo" contributed to its authorized capital;
• OAO "Volzhskaya Interregional Distribution Company", with power grid assets of OAO "Samaraenergo", OAO "Saratovenergo", and OAO "Ulyanovskenergo" that are not part of the Unified National Power Grid (UNPG) contributed to its authorized capital;
• OAO "Volzhskaya Interregional Energy Retail Company", with power retail assets of OAO "Samaraenergo", OAO "Saratovenergo", OAO "Ulyanovskenergo" contributed to its authorized capital.

Transfer of the power grid facilities that are part of the UNPG:

• The transfer of the power grid facilities owned by OAO "Samaraenergo", OAO "Saratovenergo", OAO "Ulyanovskenergo" which are part of the UNPG, and the disbursement of funds sufficient to cover the costs involved in placement of additional shares, including payment of the securities transactions tax, as consideration for shares in OAO "Volga ITC", and full payment of the additional shares in OAO "Volga ITC" being acquired by OAO "Samaraenergo", OAO "Saratovenergo", OAO "Ulyanovskenergo" prior to completion of reorganization of these companies.
• The transfer of the power grid facilities owned by OAO "Orenburgenergo" which are part of the UNPG, and the disbursement of funds sufficient to cover the costs involved in placement of additional shares, including payment of the securities transactions tax, as consideration for shares in OAO "Urals ITC", and full payment of the additional shares in OAO "Urals ITC" being acquired by OAO "Orenburgenergo" prior to completion of reorganization of OAO "Orenburgenergo".

Reorganization of OAO "Samaraenergo", OAO "Saratovenergo", and OAO "Ulyanovskenergo" through spin-off of joint-stock companies (holding companies) whose only asset is shares in the corresponding interregional production companies co-founded at the first stage, namely:

• restructuring of OAO "Samaraenergo" through spin-off of the following companies (preserving the current ownership structure):
• OAO "Samara Territorial Generation Company";
• OAO "Samara Trunk Company";
• OAO "Samara Distribution Company";
• restructuring of OAO "Saratovenergo" through spin-off of the following companies (preserving the current ownership structure):
• OAO "Saratov Territorial Generation Company";
• OAO "Saratov Trunk Company";
• OAO "Saratov Distribution Company";

restructuring of OAO "Ulyanovskenergo" through spin-off of the following companies (preserving the current ownership structure):

• OAO "Ulyanovsk Territorial Generation Company";
• OAO "Ulyanovsk Trunk Company";
• OAO "Ulyanovsk Distribution Company".

Restructuring of OAO "Orenburgenergo" through spinoff, with the power distribution networks that are not part of the UNPG remaining the property of OAO "Orenburgenergo":

• spinoff of OAO "Orenburgenergosbyt", with power sales assets of OAO "Orenburgenergo" contributed to the authorized capital of the former;
• spinoff of OAO "Iriklinskaya TPP";
• spinoff of OAO "Orenburg Heat Generation Company", with generation and heating network assets of OAO "Orenburgenergo" (except for the Iriklinskaya TPP) to be contributed to the authorized capital of the former;
• spinoff of OAO "Orenburg Trunk Company", whose only asset is shares in OAO "Urals ITC".

Participation of the companies established as a result of the wholly owned subsidiary of RAO "UES of Russia", OAO "Orenburgenergo" in interregional integration:

• contribution of 100% shares in OAO "Orenburg Heat Generation Company" owned by RAO "UES of Russia" to the authorized capital of OAO "Volzhskaya Territorial Generation Company";
• contribution of 100% shares in OAO "Orenburgenergosbyt" owned by RAO "UES of Russia" to the authorized capital of OAO "Volzhskaya Interregional Energy Retail Company";

In the event that OAO "Samaraenergo", OAO "Saratovenergo", and OAO "Ulyanovskenergo" fail to transfer the UNPG-related power grid facilities as consideration for the additional shares in OAO "Volga ITC" before the completion of restructuring, OAO "Saratov Trunk Grids", OAO "Samara Trunk Grids", and OAO "Ulyanovsk Trunk Grids" are to be spun off in the course of their reorganization from OAO "Samaraenergo", OAO "Saratovenergo", and OAO "Ulyanovskenergo", respectively, and the UNPG-related power grid facilities are to be transferred to said spin-off companies in accordance with the separation balance sheets.

In the event that OAO "Orenburgenergo" fails to transfer the UNPG-related power grid facilities as consideration for the additional shares in OAO "Urals ITC" before the reorganization is completed, OAO "Orenburg Trunk Grids" is to be spun off from OAO "Orenburgenergo" in the course of restructuring of the latter, and the UNPG-related power grid facilities are to be transferred to said spin-off company in accordance with the separation balance sheet.

The restructuring plan provides for pro-rata distribution of shares in OAO "Volga ITC" held by OAO "Samara Trunk Company", OAO "Saratov Trunk Company", OAO "Ulyanovsk Trunk Company" among the shareholders of OAO "Samara Trunk Company", OAO "Saratov Trunk Company", OAO "Ulyanovsk Trunk Company" using the procedure of liquidation of OAO "Samara Trunk Company", OAO "Saratov Trunk Company", OAO "Ulyanovsk Trunk Company" or their merger with and into OAO "Volga ITC".

Pro-rata distribution of shares in OAO "Urals ITC" held by OAO "Orenburg Trunk Company" among the shareholders of OAO "Orenburg Trunk Company" using the procedure of liquidation of OAO "Orenburg Trunk Company" or its merger with and into OAO "Urals ITC".

The plan also envisages merger of holding companies with and into operating companies, namely:

• OAO "Samara Territorial Generation Company", OAO "Saratov Territorial Generation Company", OAO "Ulyanovsk Territorial Generation Company", with and into OAO "Volga Territorial Generation Company";
• OAO "Samara Distribution Company", OAO "Saratov Distribution Company", OAO "Ulyanovsk Distribution Company" with and into OAO "Volga Interregional Distribution Company".

Reorganization of OAO "Samaraenergo", OAO "Saratovenergo", OAO "Ulyanovskenergo" through merger with and into OAO "Volga Interregional Energy Retail Company".

Transfer of the powers of the one-man management bodies (i.e. CEOs) of the following companies to OAO "Srednevolzhskaya Interregional Management Energy Company":

• OAO "Orenburgenergo";
• OAO "Orenburgenergosbyt";
• OAO "Orenburg Heat Generation Company";
• OAO "Iriklinskaya TPP" (until its shares are contributed to the authorized capital of the wholesale generation company);

The Board of Directors of RAO "UES of Russia" commissioned the Management Board of RAO "UES of Russia" to ensure that the Board meetings of the generation companies being created in the course of restructuring (i.e. RGCs, TGCs, WGCs) consider the item "On priority lines of activity". The RGCs and TGCs are to supply electricity to the regional retail market where the respective power plants owned by the generation companies are located until they become participants of the wholesale electricity market, and the consequences of their operation on the wholesale market are taken into account when setting the maximum tariffs for heat and electricity supplied by energy providers or energy retail companies to consumers, including the tariffs for households and regional tariffs.

The Board of Directors of RAO "UES of Russia" resolved to revoke Items 1.1 to 1.6 of the resolutions of the Board of Directors of RAO "UES of Russia" on the restructuring plan of OAO "Orenburgenergo" of 14 June 2002.

The Board of Directors of RAO "UES of Russia" instructed the representatives of OAO RAO "UES of Russia" on the Boards of Directors of the regional energos to vote FOR the approval of the resolutions on this item.

* * *

The Board of Directors of RAO "UES of Russia" unanimously approved the restructuring plan of OAO "Krasnoyarskenergo". The energy company will be restructured in accordance with the basic scenario through spin-off of the following companies (with the current ownership structure preserved):

• OAO "Krasnoyarsk Energy Management Company";
• OAO "Krasnoyarskaya Generatsia";
• OAO "Krasnoyarskenergosbyt";
• OAO "Krasnoyarsk Trunk Grids", whose only asset is shares in OAO "Siberia ITC";
• OAO "Tyvaenergo-Holding", whose principal asset is shares in OAO "Tyvaenergo".

The restructuring plan provides for pro-rata distribution of shares in OAO "Siberia ITC" held by OAO "Krasnoyarsk Trunk Grids" among the latter's shareholders using the procedure of liquidation of OAO "Krasnoyarsk Trunk Grids" or its merger with and into OAO "Siberia ITC". In the course of restructuring of the energy company, the power distribution networks are to remain the property of OAO "Krasnoyarskenergo".

According to the plan, the functions of the one-man executive bodies (i.e. CEOs) of the following companies are to be transferred to OAO "Krasnoyarsk Energy Management Company":

• OAO "Krasnoyarskaya Generatsia";
• OAO "Krasnoyarskenergosbyt";
• OAO "Tyvaenergo-Holding";
• OAO "Krasnoyarskenergo".

The Board of Directors of RAO "UES of Russia" commissioned the Management Board of RAO "UES of Russia" to ensure that the Board meetings of the generation companies being created in the course of restructuring (i.e. RGCs, TGCs, WGCs) consider the item "On priority lines of activity". The RGCs and TGCs are to supply electricity to the regional retail market where the respective power plants owned by the generation companies are located until they become participants of the wholesale electricity market, and the consequences of their operation on the wholesale market are taken into account when setting the maximum tariffs for heat and electricity supplied by energy providers or energy retail companies to consumers, including the tariffs for households and regional tariffs.

The Board instructed RAO UES representatives to vote for the approval of all items of business of Board meetings and shareholder meeting of OAO "Krasnoyarskenergo" and shareholder meetings of the newly established companies, so as to ensure implementation of the reorganization plan of OAO "Krasnoyarskenergo".

* * *

The Board of Directors of RAO "UES of Russia" unanimously approved the restructuring plan of OAO "Khakasenergo".

The energy company will be restructured in accordance with the basic scenario through spin-off of the following companies (with the current ownership structure preserved):

• OAO "Khakassia Energy Management Company";
• OAO "Khakassia Generation Company";
• OAO "Khakasenergosbyt";
• OAO "Khakassia Trunk Company", whose only asset is shares in OAO "Siberia ITC".

The plan envisages the establishment of OAO "Khakassia Repair and Maintenance Company" and OAO "Khakassetremont" by OAO "Khakasenergo" jointly with OAO "CNII NPKenergo" on the following conditions:

• the stake of OAO "Khakasenergo" in the authorized capital of the companies being established: 100% minus one share;
• the stake of OAO "CNII NPKenergo" in the authorized capital of the companies being established: one share, but not more than 1%;

The restructuring plan provides for pro-rata distribution of shares in OAO "Siberia ITC" held by OAO "Khakassia Trunk Company" among the latter's shareholders using the procedure of liquidation of OAO "Khakassia Trunk Company" or its merger with and into OAO "Siberia ITC". In the course of restructuring of the energy company, the power distribution networks are to remain the property of OAO "Khakasenergo".

According to the plan, the functions of the one-man executive bodies (i.e. CEOs) of the following companies are to be transferred to OAO "Khakassia Energy Management Company":

• OAO "Khakassia Generation Company";
• OAO "Khakasenergosbyt";
• OAO "Khakasenergo".

The Board of Directors of RAO "UES of Russia" commissioned the Management Board of RAO "UES of Russia" to ensure that the Board meetings of the generation companies being created in the course of restructuring (i.e. RGCs, TGCs, WGCs) consider the item "On priority lines of activity". The RGCs and TGCs are to supply electricity to the regional retail market where the respective power plants owned by the generation companies are located until they become participants of the wholesale electricity market, and the consequences of their operation on the wholesale market are taken into account when setting the maximum tariffs for heat and electricity supplied by energy providers or energy retail companies to consumers, including the tariffs for households and regional tariffs.

The Board resolved to instruct RAO UES representatives to vote for the approval of all items of business of board meetings and shareholder meeting of OAO "Khakasenergo" and shareholder meetings of the newly established companies, so as to ensure implementation of the reorganization plan of OAO "Khakasenergo".

* * *

The Board of Directors of RAO "UES of Russia" approved the amendments to the Regulation on the Strategy and Reform Committee under the Board of Directors of RAO "UES of Russia"* due to the change in the shareholder structure of OAO RAO "UES of Russia" and the wish of new shareholders to take part in the Committee's activities.

In accordance with the decision of the Board of Directors, the number of Committee members was increased from 13 to 16 persons:

• 4 Government representatives: 1 representative of the Ministry of Economic Development and Trade of the Russian Federation, 1 representative of the Ministry of Industry and Energy of the Russian Federation, 1 representative of the Federal Agency for Federal Property Management, and 1 representative of the Federal Anti-monopoly Service;
• 4 representatives of the management of RAO "UES of Russia";
• 8 representatives of minority shareholders and potential strategic investors.

Under the Restated Regulation on the Strategy and Reform Committee, the Committee's Chairman is entitled to involve other persons to work for the Committee as exports (up to 6 persons, who have the right of consultative vote);

The Board of Directors approved the appointment of the following members to the Committee:

The following experts will be involved in the Committee's work (without the right of vote): S.I. Bubnov (EBRD representative), V.S. Milov (President, Institute for Strategic Development of the Fuel and Energy Complex), and A.M. Branis (Director, Prosperity Capital Management Ltd).

_____________________

* The Reform Committee under the Board of Directors of RAO "UES of Russia" was formed on 31 August 2001. Later, on 1 August 2003, the Committee was renamed as Strategy and Reform Committee.

The Committee is engaged in the analysis of proposals and working out recommendations for the Board of Directors of RAO "UES of Russia" on the matters relating to the development and implementation of the Holding Company's strategy and the restructuring of the entities comprising the Holding Company.

* * *

The Board of Directors of RAO "UES of Russia" approved the establishment of a Scientific and Research Centre specialized on electricity networks through merger of OAO "VNIIE", OAO "NIC VVA", OAO "NIIPT", OAO "SibNIIE", and OAO "ROSEP" and subsequent contribution of their shares to the authorized capital of OAO "UES FGC".

In the course of restructuring of Russia's electricity industry, part of the process consists in determining the role and place to be occupied by the sector's research and development and design institutes, which are subsidiaries of OAO RAO "UES of Russia", in the future electricity industry complex of Russia. At the previous stages, it was determined that the above institutes are primarily engaged in developing projects in the area of power grids. For that reason, OAO "UES FGC" was given the task to restructure this group of institutes, namely VNIIE, NIIPT, SibNIIE, NIC VVA, and ROSEP.

Optimization of management at AO-institutes through their close integration with OAO "UES FGC" will help more effectively use the intellectual and technological potential of these AO-institutes for scientific and research support of the UNPG functioning and development.

* * *

The Board of Directors of RAO "UES of Russia" considered the matter of defining the stance of RAO UES representatives in the vote on items of business of general meetings of shareholders and Board meetings of SDCs of OAO RAO "UES of Russia".

The Board of Directors approved the participation of OAO "Kabbalkenergo", OAO "Karachaevo-Cherkesskenergo", and OAO "Sevkavkazenergo" in OAO "North Caucasian Energy Repair Company" on the following conditions:

• the authorized capital of OAO "North Caucasian Energy Repair Company" shall be RUB50,617,068 (fifty million six hundred and seventy thousand sixty-eight Rubles);
• category, type, par value, and number of shares to be placed at the time of establishment of the company: 50,617,068 (fifty million six hundred and seventy thousand sixty-eight) registered ordinary shares, par value RUB1 (one Ruble) per share;
• the founders of OAO "North-Caucasian Energy Repair Company":
• OAO "Kabbalkenergo": 26,676,876 (twenty-six million six hundred and seventy-six thousand eight hundred and seventy-six) shares;
• OAO "Karachaevo-Cherkesskenergo": 11,314,551 (eleven million three hundred and fourteen thousand five hundred and fifty-one) shares;
• OAO "Sevkavkazenergo": 12,625,641 (twelve million six hundred and twenty-five thousand six hundred and forty-one) shares;
• procedure (term) for payment of the shares: in accordance with the laws on joint-stock companies currently in effect;
• form of payment for the shares:
• OAO "Kabbalkenergo" shall contribute property whose market value has been determined by an independent appraiser at RUB19,344,876 (nineteen million three hundred and forty-four thousand eight hundred and seventy-six Rubles) and cash in the amount of RUB7,332,000 (seven million three hundred and thirty-two thousand Rubles);
• OAO "Karachaevo-Cherkesskenergo" shall contribute property whose market value has been determined by an independent appraiser at RUB 7,721, 311 (seven million seven hundred and twenty-one thousand three hundred and eleven Rubles) and cash in the amount of RUB3,593, 240 (three million five hundred and ninety-three thousand two hundred and four Rubles);
• OAO "Sevkavkazenergo" shall contribute property whose market value has been determined by an independent appraiser at RUB9,036,481 (nine million thirty-six thousand four hundred and eighty-one Rubles) and cash in the amount of RUB3,589,160 (three million five hundred and eighty-nine thousand one hundred and sixty Rubles).

The Board of Directors of RAO "UES of Russia" approved the establishment by OAO "Konakovskaya TPP" of OAO "Sanatorium-Preventorium of Konakovskaya TPP", a wholly-owned subsidiary with the authorized capital of RUB10,767,000 (ten million seven hundred and sixty-seven thousand Rubles) through placement of 10,767 (ten thousand seven hundred and sixty-seven) registered ordinary shares, par value RUB1,000 (one thousand Rubles). The shares shall be paid for in property whose market value has been determined by an independent appraiser at RUB 10,767,000 (ten million seven hundred and sixty-seven thousand Rubles).

The Board of Directors approved the establishment by OAO "Krasnoyarskenergo" of OAO "Nazarovskoe Rybnoe Khozyaistvo" ("Nazarovskoe Fish Farm"), a wholly-owned subsidiary with the authorized capital of RUB8,782,000 (eight million seven hundred and eighty-two thousand Rubles) through placement of 8,782,000 (eight million seven hundred and eighty-two thousand) registered ordinary shares, par value RUB1 (one Ruble). The shares shall be paid for in property whose market value has been determined by an independent appraiser at RUB 8,307,000 (eight million three hundred and seven thousand Rubles) and cash in the amount of RUB475,000 (four hundred and seventy-five thousand Rubles).

The Board of Directors approved the establishment by OAO "Kolenergo" of OAO "Kolenergosetservis", a wholly-owned subsidiary with the authorized capital of RUB30,000,000 (thirty million Rubles) through placement of 30,000 (thirty thousand) registered ordinary shares, par value RUB1,000 (one thousand Rubles). The shares shall be paid for in property whose market value has been determined by an independent appraiser at RUB29,267,446 (twenty-nine million two hundred and sixty-seven thousand four hundred and forty-six Rubles) and cash in the amount of RUB732,554 (seven hundred and thirty-two thousand five hundred and fifty-four Rubles).

The Board instructed the representatives of OAO RAO "UES of Russia" to vote FOR the approval of the EGM agenda at the Board Meeting of OAO "Krasnoyarskenergo", which agenda includes the following item of business:

- Early termination of the powers and election of [new] members of the Board of Directors of OAO "Krasnoyarskenergo".

The Board of Directors of RAO "UES of Russia" determined its stance on the item of business of the meeting of the Board of Directors of OAO "Krasnoyarskenergo". The Board of Directors instructed the representatives of RAO "UES of Russia" on the Board of Directors of OAO "Krasnoyarskenergo" to vote FOR the change in the stake held by OAO "Krasnoyarskenergo" in OAO "Krasnoyarskaya HPP" and the purchase of not less than 19,442,574 (nineteen million four hundred and forty-two thousand five hundred and seventy-four) registered ordinary shares in OAO "Krasnoyarskaya HPP", par value RUB1 (one Ruble), which shares are to be placed through open subscription, at a price not more than RUB71 (seventy-one Ruble) per share.