Moscow. 27 July 2004. RAO "UES of Russia" is continuing the restoration of the energy facilities destroyed during the hostilities in the Chechen Republic. The work is carried out in accordance with the schedule. Over the first six months of 2004, the Holding Company allocated RUB619.1 million in funds for this purpose, which makes 100% of the funding plan for this period. The functions of the principal for the reconstruction projects at the Republic's energy facilities and their subsequent operation are performed by the wholly owned subsidiary of RAO "UES of Russia", OAO "Nurenergo".

Over the period, RUB66.5 million in funds was allocated for the reconstruction of 35-110 kV transmission lines, and RUB110.0 million for the construction of 35-330 kV substations. The cost of reconstruction works on the distribution networks of OAO "Nurenergo" in H1 2004 totalled RUB61.2 million. OAO "Nurenergo" allocated RUB99.3 million for the reconstruction of the infrastructure facilities.

As of 1 July 2004, the Company restored and put into operation 242 km of HV lines and 128 transformer substations. Over 1500 specialists and about 200 machines are currently engaged in the repairs and reconstruction at the energy facilities of the Chechen Republic.

The total amount of funds expected to be allocated for the reconstruction projects in 2004 is RUB1,605 million, including RUB300 million in funds allocated under the target investment program of RAO "UES of Russia".

To the order of OAO "Nurenergo", work is continued to reconstruct and modernize Argunskaya CHPP. In H1 2004, the energy company disbursed RUB280.92 million for the modernization of the power plant. The commissioning of the first phase of the CHPP and the entire infrastructure of the power plant is scheduled for late 2004. At the moment, about 300 specialists of the Holding Company of RAO "UES of Russia" and 20 machines are working on the site.

Besides, preparatory work is near completion on the Main Distribution Substation GRP-110 in the city of Grozny. The commissioning of this project will significantly enhance the reliability of energy supply to the Republic's capital city. A project has been launched to build the Grozny-330 substation and the administrative and engineering building of OAO "Nurenergo". Work is underway on the electrification of inhabited localities in the inaccessible mountainous areas of the Chechen Republic.

The resumption of operation of some power grid facilities in the Republic will ensure stable flows of electricity from the neighbouring regions of the Russian Federation, which means a normal energy supply to most inhabited localities in the Chechen Republic. The energy consumption in the Republic is constantly growing. In 2002, RAO UES entities supplied 917 million kW of electricity to consumers in Chechnya, whereas in 2003 the volume of electricity supply was 1,140 million kWh. In 2004, energy consumption in the area is expected to reach 1,300 million kWh.

RAO "UES of Russia" are confident that the reconstruction of energy facilities and restoration of normal power supply in the Chechen Republic will promote development of the Republic's industry and its economic growth, and help return to peaceful life in the region.