Moscow. 26 October 2007. The Board of Directors of RAO "UES of Russia" approved an increase in the number of additional shares to be issued by OAO "TGC-10". This decision was taken due to the fact that the list of investment projects of OAO "TGC-10" to be financed with the proceeds from the additional share offering now includes a project to build the fifth power unit at the Tyumenskaya CHPP-2.

The maximum number of ordinary shares authorized for issuance will be increased to 633,000,000 from 500,000,000 ordinary shares (which makes 136.55 percent of TGC-10 authorized capital prior to the offering and 57.73 percent after the offering). The previously approved issuance of additional shares by TGC-10 was expected to raise RUB31.8 billion. Under the new plan, TGC-10 is to raise RUB46.6 billion for its investment projects.

The shares are expected to be offered to the general public in 1Q 2008. The offering will use a dual track approach, i.e. the company will simultaneously pursue a public offering and direct sale of shares to a strategic investor. TGC-10 will determine the final scheme for the offering taking into account the recommendations given by the underwriter banks.

The offering of TGC-10's new shares will be carried out simultaneously with the sale the existing shares in TGC-10 comprising the so-called "government stake". The Board of Directors of RAO "UES of Russia" approved the share sale at its meeting held 31 August 2007. RAO "UES of Russia" will put up for sale a 59% stake in TGC-10 (255,455,754 ordinary shares, par value RUB1.66 per share).

After the offering and the sale the "government stake" shares, RAO "UES of Russia" will hold at least 11 percent of TGC-10.

If the new shares are purchased by a strategic investor, RAO UES will enter into a share purchase agreement with such investor providing that it will also purchase the "government stake" stake at the same price as the new shares. If the Board of Directors of OAO "TGC-10" approves the issuance of additional shares to financial investors, the Board of Directors of RAO "UES of Russia" will reconsider the terms of sale of the "government stake" shares.

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The Board of Directors of RAO "UES of Russia" approved the terms for establishing of OAO "Center and Privolzhye IDC", OAO "North-West IDC", and OAO "Siberia IDC".

At its meeting of 27 April 2007, the RAO UES Board of Directors approved the new configuration for the interregional distribution companies (IDCs). In accordance with this resolution, the target model of operation of the IDCs is a single operating company created through merger of the respective distribution companies (DCs) which make up its configuration. The merger will be effected through conversion of DC shares into additional shares in the respective IDCs.

The Board of Directors of RAO "UES of Russia" approved the issuance of additional 112,600,000,000 ordinary shares in Center and Privolzhye IDC and the share conversion ratios for the transaction.

According to the Board resolution, the following quantities of shares will be converted into one ordinary share of OAO "Center and Privolzhye IDC":

• 24,393/8,307,841 of an ordinary share in OAO "Vladimirenergo";
• 24,393/116,435 of an ordinary share in OAO "Ivenergo";
• 24,393/106,632 of a Type A preferred share in OAO "Ivenergo";
• 24,393/3,660,401 of an ordinary share in OAO "Kalugaenergo";
• 24,393/97,418 of an ordinary share in OAO "Kirovenergo";
• 24,393/89,216 of a Type A preferred share in OAO "Kirovenergo";
• 24,393/819,890 of an ordinary share in OAO "Marienergo";
• 24,393/750,855 of a Type A preferred share in OAO "Marienergo";
• 24,393/194,079,154 of an ordinary share in OAO "Nizhnovenergo";
• 24,393/177,737,689 of a Type A preferred share in OAO "Nizhnovenergo";
• 24,393/1,572,918 of an ordinary share in OAO "Ryazanenergo";
• 24,393/117,828 of an ordinary share in OAO "Tulaenergo";
• 24,393/1,454,307 of an ordinary share in OAO "Udmurtenergo";
• 24,393/1,331,854 of a Type A preferred share in OAO "Udmurtenergo".

The Board of Directors of RAO "UES of Russia" approved the issuance of additional 95,687,000,000 ordinary shares in OAO "North-West IDC" and the ratios for conversion of shares in the respective DCs into the additional shares in OAO "North-West IDC".

According to the Board resolution, the following quantities of shares will be converted into one ordinary share of OAO "North-West IDC":

• 18,521/95,911 of an ordinary share in OAO "Arkhenergo";
• 18,521/87,835 of a Type A preferred share in OAO "Arkhenergo";
• 18,521/24,932,387 of an ordinary share in OAO "Vologdaenergo";
• 18,521/57,033 of an ordinary share in OAO "Komienergo";
• 18,521/52,231 of a preferred share in OAO "Komienergo";
• 18,521/268,758 of an ordinary share in OAO "Karelenergo";
• 18,521/394,400 of an ordinary share in OAO "Kolenergo";
• 18,521/361,192 of a Type A preferred share in OAO "Kolenergo";
• 18,521/874,757 of an ordinary share in OAO "Novgorodenergo";
• 18,521/801,102 of a Type A preferred share in OAO "Novgorodenergo";
• 18,521/2,176,473 of an ordinary share in OAO "Pskovenergo".

The Board of Directors of RAO "UES of Russia" approved the issue of additional 95,305,500,000 ordinary shares in OAO "Siberia IDC" and the ratios for conversion of shares in the respective DCs into the additional shares in OAO "Siberia IDC".

According to the Board resolution, the following quantities of shares will be converted into one ordinary share of OAO "Siberia IDC":

• 41,471/130,780,655 of an ordinary share in OAO "Altayenergo";
• 41,471/119,768,923 of a Type A preferred share in OAO "Altayenergo";
• 41,471/727,286 of an ordinary share in OAO "Buryatenergo";
• 41,471/1,469,553 of an ordinary share in OAO "Krasnoyarskenergo";
• 41,471/1,345,817 of a Type A preferred share in OAO "Krasnoyarskenergo";
• 41,471/1,473,694 of an ordinary share in OAO "Kuzbassenergo - DC";
• 41,471/91,793,604 of an ordinary share in OAO "Omskenergo";
• 41,471/84,064,583 of a Type A preferred share in OAO "Omskenergo";
• 41,471/57,321 of an ordinary share in OAO "Tomsk Distribution Company";
• 41,471/52,495 of a Type A preferred share in OAO "Tomsk Distribution Company";
• 41,471/124,267 of an ordinary share in OAO "Tyvaenergo-Holding";
• 41,471/113,804 of a Type A preferred share in OAO "Tyvaenergo-Holding";
• 41,471/124,424,338 of an ordinary share in OAO "Khakasenergo";
• 41,471/76,874 of an ordinary share in OAO "Chitaenergo";
• 41,471/70,401 of a Type A preferred share in OAO "Chitaenergo".

In the process of creating the IDCs, preferred shares in DCs will be converted into additional ordinary shares of IDCs using a conversion ratio of 0.9158.

The Board of Directors decided that it would be advisable for IDCs to place additional shares through closed subscription (private placement) if shareholders of some DCs do not approve their companies' merger with and into the respective IDC. In such a case, RAO UES will pay for the additional IDC shares with its shareholdings in the DCs (making up the configuration of the respective IDC) which do not approve the reorganization.

In this connection, the Board of Directors approved the terms of issuance of the IDCs' additional shares, which will be issued in the event that a general shareholder meeting of any DC does not approve the merger with and into the respective IDC. In that case, OAO "North-West IDC" will issue 52,946,592,908 additional ordinary shares; OAO "Center and Privolzhye IDC" 6,699,338,101 additional ordinary shares, and OAO "Siberia IDC" 50,321,586,435 additional ordinary shares.

The terms of share issue and number of additional shares to be issued by the IDCs, as well as the share conversion and exchange (in case of additional issue) ratios have been calculated based on the uniform principles, estimates of the fair market value of the merging companies' shares made by a consortium of independent appraisers consisting of OOO "Ernst & Young Valuation Advisory Services", ZAO ENPI Consult", and ZAO "Mezhdunarodny Centr Otsenki" ("International Appraisal Center").

The Board of Directors of RAO "UES of Russia" has approved the disposal by RAO "UES of Russia" of its stakes in the DCs making up the configuration of OAO "North-West IDC", OAO "Center and Privolzhye IDC", and OAO "Siberia IDC", and the reduction of the Company's interest in these IDCs if the DCs concerned merge with and into the IDCs or if holding companies are established on the basis of the IDCs.

The Board of Directors instructed RAO UES representatives on the management bodies of the IDCs and DCs to vote FOR the approval of all resolutions needed to bring the target structure of the IDCs to completion.

It is planned that the establishment of OAO "North-West IDC", OAO "Center and Privolzhye IDC", and OAO "Siberia IDC" will be completed in Q2 2008.

***After the final intended structure of the IDCs is achieved, the RAO UES stake in OAO "North-West IDC", OAO "Center and Privolzhye IDC", and OAO "Siberia IDC" will be at least 50% plus one voting share.

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The Board of Directors approved the sale of the shares held by RAO "UES of Russia" in OAO "Mosenergo" and attributable to the "government stake".

As a result of the additional share issue in favour of Gazprom Group, the stake held by RAO "UES of Russia" in OAO "Mosenergo" declined to 36.17 percent. The minority shareholders' interest in that stake is 15.01%, while the "government stake" is 21.16%, or 8,411,231,716 ordinary shares in Mosenergo.

The Board of Directors approved the use of the basic method for the disposal of this holding, i.e. offering the shares for sale to a broad range of investors, including by placing global depositary receipts representing shares in Mosenergo. This method of sale makes it possible, on the one hand, to ensure absolute transparency and, on the other hand, to maximize the proceeds from the sale of the shareholding.

The sale price of Mosenergo shares is to be determined by the RAO UES Management Board based on the results of the road-show and book-building process. The proceeds from the sale will be used to finance the investment programme of OAO "UES FGC".

Besides that, in order to maximize the proceeds from the sale of the RAO UES stake in Mosenergo, the Board of Directors instructed the RAO UES Management Board to hold negotiations with the Moscow City Government and enter into an agreement on joint sale of the shareholdings in Mosenergo comprising at least 25 percent plus one share (i.e. a blocking stake) in Mosenergo, which is to include the Mosenergo shares held by RAO "UES of Russia" and the Moscow City Government (21.16% and 5.4%, respectively).

If RAO "UES of Russia" fails to execute such an agreement with the Moscow authorities by 16 November 2007, the RAO UES Management Board will accept the offer of Gazprom Group to purchase the Mosenergo shares by offering Gazprom the 8% "government stake" shares held by RAO "UES of Russia". The remaining shares are to be offered to a wide range of investors, including by issuing global depositary receipts representing Mosenergo shares.

As the stakes in OAO "Mosenergo" were contributed to the authorized capital of RAO "UES of Russia" in the course of the Company's establishment, their disposal is subject to a resolution by the Russian Federation Government. Thus, the government stake in Mosenergo will be sold after the Government resolutions to that effect are published.