Moscow. 8 November 2005. RAO "UES of Russia" announces that the article published in one of Moscow's newspapers in which the CEO of RAO "UES of Russia" is alleged to say that "liquidation of RAO UES as a result of the reform is a mistake, and it will not take place" is deliberate misinformation.

The Company officially announces that no such statements were made —or could have been made —by its managers, or by the shareholders, including the Company's major shareholder, the State.

The reform of RAO "UES of Russia" will be brought to completion in accordance with the Government Programme and laws passed by the Federal Assembly and signed by the President of the Russian Federation. The task set before RAO UES managers is to transfer their functions, when market participants and electricity markets are created, to the ministries and agencies concerned, and to the infrastructure organizations—Federal Grid Company, System Operator, thus ensuring reliable operation of the Unified Energy System as a result of the sector reform.

We cannot rule out that that this publication is intended to influence the Company's stock price in the interests of certain financial groups.