Moscow. 25 July 2005.Yuri Makushin, Acting Managing Director of RAO "UES of Russia", Magomed Kaitov, Director General of OAO "Caucasian Energy Management Company", Mustafa Badtyev, President of the Republic of Karachay-Cherkessia, and Alik Kardanov, Chairman of the Government of Karachay-Cherkessia, have signed a supplementary agreement to restructure the debts owed by wholesale resellers of electricity to OAO "Karachaevo-Cherkesskenergo".

Under this document, Karachay-Cherkessia's Government undertook to ensure 100% payment of the current electricity bills by the Republic's budget dependent consumers with effect from July 2005. Also, the republican authorities promised to repay, by 30 November 2005, the RUB19.27 million in debts owed by the wholesale resellers to OAO "Karachaevo-Cherkesskenergo" on their current electricity bills.

The President and Government of Karachay-Cherkessia confirmed the existence of the RUB17m debt owed by the Republic's budget dependent consumers to OAO "Karachaevo-Cherkesskenergo", which was recorded in the agreement on interaction to normalize payment of electricity bills signed on 19 August 2004 between RAO "UES of Russia", the Government of Karachay-Cherkessia and OAO "Caucasian Energy Management Company". These debts must be paid by 31 August 2005.

If these requirements are met, OAO "Karachaevo-Cherkesskenergo" will not impose restrictions on electricity supply to budgetary and budget dependent consumers and will ensure reliable and uninterrupted power supply to consumers in Karachay-Cherkessia.