Moscow, 3 August 2006. The Russian Government has approved the Investment Programme for the Electric Power Industry for the Year 2007 and the Period until 2009. The Programme includes investment plans for RAO "UES of Russia" and its subsidiaries, OAO "Federal Grid Company of Unified Energy System", OAO "HydroWGC", and OAO "UES SO-CDA". In 2007, the investments to be made by OAO RAO "UES of Russia", OAO "UES FGC", OAO "HydroWGC", and OAO "UES SO-CDA" will total RUB160.3 billion, a twofold increase on 2006. In 2007, the overall investments in RAO UES Holding will amount to RUB400 billion.

Under the Investment Program of OAO RAO "UES of Russia", financial resources are to be concentrated on projects to build new TPPs: Power Unit 1 at the Ivanovskaya TPP will be brought on line in 2007. It is planned that the Mobile Gas Turbine Power Plants Project will be implemented during the year. In 2008, Power Unit 2 will be brought on line at the Kaliningradskaya CHPP-2 and start to finance the construction of Power Unit 2 at the Ivanovskaya TPP. RAO "UES of Russia" will allocate more than RUB12.5 billion in investments for 2007 and RUB15.4 billion for 2008. In 2007, it is planned that the Company will raise RUB3.5 billion in borrowings.

RUB4.2 billion will be used to finance the construction of the Ivanovskaya TPP in 2007. Power Unit 1 of 325 MW is scheduled to go on line in Q1 2007. The Unit will be equipped with a PGU-325 combined-cycle gas turbine, based on a Russian-made gas turbine.

In order to meet peak load requirements during the 2006/2007 autumn-winter period, RUB5.3 billion will be allocated in 2007 for the projects to install mobile gas turbine stations in the Moscow Region. The first such station will be built in the Moscow Region already in 2006. The total project cost, including the cost of equipment and labour, is estimated at RUB8.2 billion.

In 2007, RAO "UES of Russia" will allocate RUB2.2 billion to construct Power Unit 2 at the Kaliningradskaya CHPP-2 and borrow RUB3.5 billion. The borrowed funds will be repaid from the funds earmarked for investment in 2008. Power Unit 2 of 325 MW is scheduled to become operational in Q4 2008.

The Russian Government has also approved the investment programmes of the subsidiaries of RAO "UES of Russia", OAO "UES FGC", OAO "HydroWGC", and OAO "UES SO-CDA".

The FGC Investment Programme is aimed at ensuring reliable operation of the Unified Energy System of Russia, preventing power shortages, transporting electricity from generation facilities, modernizing and building new grid facilities. Special attention will be given to implementing the Reliability Improvement Programme designed to improve of power supply in Moscow, St.-Petersburg, and West Siberia. Moreover, the Programme provides for further restoration of the energy system in Chechnya and construction of the Sangtuda HPP in Tajikistan. The Investment Programme of OAO "UES FGC", including appropriations from the federal budget, will total RUB78.9 billion in 2007 and RUB95.4 billion in 2008.

The Investment Programme of OAO "HydroWGC" is intended to ensure safe operation the existing hydro power facilities, improve the system reliability and overcome energy shortages in some areas of Russia. Principal attention will be paid to the completion of the projects of the Boguchanskaya HPP, Zaramagskie HPPs, Irganayskaya HPP, Zelenchukskaya HPP, Kashkhatau HPP, and Sayano-Shushenskaya HPP. Besides, in order to address the capacity deficit, OAO "HydroWGC" plans to build pumped-storage power plants (PSPP) in the European part of Russia: the Zagorskaya PSPP-2, Leningradskaya PSPP, Tsentralnaya PSPP, and the Zelenchukskaya HPP-PSPP. The HydroWGC Investment Programme, including appropriations from the federal budget, will total RUB60.4 billion in 2007 and RUB73.4 billion in 2008.

The key objectives of the Investment Programme of OAO "UES System Operator-Central Dispatch Administration" will be development of technologies needed for the calculation, analysis, and scheduling of the energy system, support in trading processes on the market, improvement of functional robustness of the dispatching centers and the operational dispatching system. The total amount of the Programme, including appropriations from the federal budget, will make RUB5.3 billion in 2007 and RUB5.1 billion in 2008.