Moscow. 9 July 2005. RAO "UES of Russia" and RUSAL have announced the signing of a memorandum of intent to jointly complete Boguchanskaya HPP and construct a new aluminum smelter, which will become the hydropower station's key consumer.

In accordance with the memorandum of understanding (MOU), OAO HydroOGK and RUSAL will consider the project's economic efficiency and study respective legal aspects. As part of this undertaking, the joint task force will prepare a pre-feasibility study of the two project components.

The signatories to the MOU will set up a joint company to manage the project. Its Board of Directors will include an equal number of representatives from HydroOGK and RUSAL.

The MOU provides for an equal funding and management of the project, which is expected to take five to seven years to complete. Boguchanskaya HPP’s capacity will reach 3,000 MW, with the annual output of 17.6 billion kW per hour. The aluminum smelter with an estimated capacity of 500,000-600,000 tonnes per year will be built in the Krasnoyarsk Region. The total cost of the project is preliminarily estimated at about $3 billion.

The MOU signing was announced July 9, 2005 at a meeting on the progress of the Boguchanskaya HPP completion, led by the Russian Federation Minister for Economic Development and Trade, German Gref. The meeting participants included Krasnoyarsk Region Governor Alexander Khloponin, RUSAL Board of Directors Chairman Oleg Deripaska and OAO HydroOGK Board Chairman Vyacheslav Sinyugin. The results of the meeting will serve as basis for a task list to a number of Ministries and state agencies, as well as regional authorities to prepare an integrated economic development plan for Russia's Lower Angara area (Krasnoyarsk Region).

The commissioning of the Boguchanskaya HPP and the construction of the aluminum smelter will boost the economic development of the Lower Angara, which holds vast natural resources of oil, gas, gold (about 10% of Russia's total proven resources), timber, and large deposits of niobium, zinc, lead, bauxite and magnesium carbonate. These resources are currently inaccessible due to low energy supply and a lack of essential infrastructure. Once operational, the HPP will help solve the problem of the possible undersupply of electric power in Siberia.

About the companies:

RUSAL is a global No. 3 primary aluminium producer, headquartered in Moscow. Established in March 2000 through a merger of several largest aluminium smelters and alumina refineries, RUSAL now accounts for 75% of aluminium production in Russia and 10% internationally. RUSAL is a vertically integrated company with a full production cycle, including upstream and downstream, production of primary aluminium, semi products and value-added casthouse products.

OAO HydroOGK is a 100% subsidiary of RAO Unified Energy Systems of Russia. Established in accordance with the RF Government's Order No. 1254-r of September 1, 2003 (as amended October 25, 2004), HydroOGK controls hydropower stations with a total capacity of 22,650 MW.