Moscow, 21 March 2006. In Beijing, Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais and General Manager of the State Power Grid Corporation of China Liu Zhenya have today signed an Agreement on a feasibility study for sales of Russian electricity to China.

The Agreement states that the parties intend to finalize a long-term deal to sell electricity from the Russian Federation to the People's Republic of China. The deal provides for large-scale construction of new generation and power grid facilities in Russia and power grid facilities in China.

The parties agreed on the basic price for electricity exports from Russia to China. The benchmark for the basic price is the average electricity price at the buses of power plants in the regions of China to which electricity will be delivered. The final export price to be used in payments for electricity will be determined in accordance with the basic price, which will be adjusted based on the project's feasibility study. According to the Agreement, the export price is to provide acceptable economic efficiency and payback periods.

The Agreement also provides for a feasibility study for annual exports of about 60 billion kWh of electricity from Russia to China. Within the next half year the parties will develop a pre-feasibility study using aggregated data on the project. The pre-feasibility study will determine more precisely the timeframe for the construction of generation and power grid facilities and the amounts of electricity supplies. After that, the parties will start preparation of a feasibility study for the project.

A joint working group will be set up to coordinate the development of the pre-feasibility study and feasibility study.