Moscow. 1 July 2005. At its meeting held today, the Board of Directors of RAO "UES of Russia" elected Alexander Voloshin*, Advisor to the Head of Administration of the President of the Russian Federation, as Chairman of the Company's Board of Directors, and Victor Khristenko, Minister of Industry and Energy of the Russian Federation, as Deputy Chairman of the Board.

* Alexander Voloshin has been a member of the Board of Directors of RAO "UES of Russia" since 1999, and the Board Chairman for six consecutive years.

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The Board of Directors of RAO "UES of Russia" approved the plan for the formation of OAO "TGC-11" providing for the establishment of the company, at the initial stage, as a wholly-owned subsidiary of RAO "UES of Russia".

The authorized capital of OAO "TGC-11" at the time of establishment will be RUB10 million and will be divided into 1 billion ordinary shares of RUB0.01 par value. Consideration for the shares is to be paid in money within one month after the state registration of OAO "TGC-11".

Pursuant to the resolution of the Board of Directors of RAO "UES of Russia" of 24 June 2005, OAO "TGC-11" will be formed on the basis of the generation assets of OAO "Tomskenergo" and OAO "Omskenergo" (after the reorganization of OAO "Omskenergo", the assets of OAO "Omsk Electricity Generation Company").

In order to ensure a common form of management at the regional generation companies (RGCs), OAO "Tomskenergo" and OAO "Omsk Electricity Generation Company", and to speed up the operational integration, it is planned to transfer the performance of the CEO's functions at these companies to OAO "TGC-11".

In this connection, the Board of Directors of RAO "UES of Russia" approved the transfer of functions of the CEOs of OAO "Tomskenergo" and OAO "Omsk Electricity Generation Company" to OAO "TGC-11".

Simultaneously with the transfer of functions of the RGCs' CEOs to OAO "TGC-11", steps will be taken to carry out the merger of OAO "Omsk Electricity Generation Company", OAO "Tomskenergo", and OAO "TGC-11" through merger.

The Board of Directors approved the reorganization of OAO "Tomskenergo", OAO "Omsk Electricity Generation Company", and OAO "TGC-11" through merger. Resolutions on the approval of the terms of the merger will be taken by the Board of Directors of the Board of Directors of RAO "UES of Russia". The company with which the other companies will merge will be determined in the negotiations among shareholders and the analysis of the activities of the generation companies being created.

If it is impossible to take a decision on the merger, the Board of Directors provided for increasing the authorized capital of OAO "TGC-11" through issuance of additional shares in OAO "TGC-11". Consideration for these shares will be paid in shares of OAO "Tomskenergo" and OAO "Omsk Electricity Generation Company". The Board of Directors of RAO "UES of Russia" will take decisions on the terms and conditions of the additional share issue of OAO "TGC-11" at a later date.

Representatives of RAO "UES of Russia" on the Board of Directors of OAO "Tomskenergo" were instructed to vote FOR the approval of the following items of business to be considered at the General Meeting [of OAO "Tomskenergo"]: "On the Transfer of the Functions of the One-man Executive Body (CEO) of OAO "Tomskenergo" to OAO "TGC-11", and, if necessary, "On the Approval of the Agreement on the Transfer of the Functions of the One-man Executive Body (CEO), Which Constitutes an Interested Party Transaction."

The Board of Directors of RAO "UES of Russia" also instructed its representatives on the Board of Directors of OAO "Omsk Electricity Generation Company" to vote FOR the approval of the following items of business to be considered at the General Meeting [of OAO "Omsk Electricity Generation Company"]: "On the Transfer of the Functions of the One-man Executive Body (CEO) of OAO "Omsk Electricity Generation Company" to OAO "TGC-11", and, if necessary, "On the Approval of the Agreement on the Transfer of the Functions of the One-man Executive Body (CEO), Which Constitutes an Interested Party Transaction."

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The Board of Directors of RAO "UES of Russia" approved the divestiture by OAO "COR UES", a wholly-owned subsidiary of RAO "UES of Russia", of its stake in OAO "Media-Holding REN TV".

The decision to divest was dictated by the logic of the electricity reform and the resolutions of the Board of Directors of RAO "UES of Russia" of 6 March 2002 and 28 February 2003 that it is necessary for the enterprises of RAO UES Group to dispose of their non-core assets.

In 2000, OAO "COR UES" acquired stakes in a group of companies from which the authorized capital of OOO "Media-Holding REN TV" was formed, in which OAO "COR UES" held a 69.9879% stake.

In 2000-2005, as a result of joint efforts of its shareholders, OOO "Media-Holding REN TV" turned into a financially stable company with a strong position on the Russian telebroadcasting market, own television and cinema production, and information broadcasting. RAO "UES of Russia" did not render OOO "Media-Holding REN TV" any financial assistance, such as loans or guarantees.

Before entering into the transaction in 2000, OAO "COR UES" and the minority shareholders of the REN TV Group made an option contract, which provides for, inter alia, the right of minority shareholders to purchase the stake held by OAO "COR UES" with a guaranteed revenue for OAO "COR UES", if such claim arises from minority shareholders. This was done to ensure additional guarantees of rights and interests of all shareholders who decided to jointly run the business during a period when REN TV suffered from financial instability and uncertain prospects on TV advertisement.

Pursuant to the resolution of the Board of Directors, the option will be exercised in favour of Robos, a minority shareholder in OOO "Media-Holding REN TV", which is now being acquired by Severstal-Group. The price at which OAO "COR UES" will sell its stake in OOO "Media-Holding REN TV" will be USD100 million, whereas the company purchase said stake in 2000 for USD30 million.

The Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais made a suggestion to the members of the Board of Directors to use the proceeds from this transaction to finance a special project designed to significantly improve the efficiency of dispatching/control and enhance the reliability of the energy systems' power grid facilities affected by the blackout of 25 May 2005.

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The Board of Directors of RAO "UES of Russia" deemed it advisable to liquidate the 34 management companies being spun off in the course of regional energos' restructuring, and made alterations to its previously adopted resolutions.

The Board instructed RAO UES representatives to vote FOR the approval of the items of business of Board meetings and shareholder meeting of the companies concerned that are required to take the decisions necessary to liquidate the companies.

The Board of Directors of RAO "UES of Russia" approved the sale of the shares in the 34 management companies owned by RAO "UES of Russia" to persons not affiliated with RAO UES Group on the terms and conditions determined by the Management Board of RAO "UES of Russia" in the event that the general meetings of shareholders of said management companies do not approve the liquidation of the companies.

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The Board of Directors of RAO "UES of Russia" approved the principal terms and conditions of the contract for trust management by TGCs of shares in energy retail companies (ERCs*) spun off from regional energos.

The principal terms and conditions of the trust management contract include, in particular, determination of requirements for the trustee with respect to the collection of payments and fulfilment of obligations to pay electricity and infrastructure services bills; the amount and terms of payment of remuneration to the trustee; the period of the contract.

The Board of Directors instructed the Management Board to:

• to determine the planned level of payment of electricity bills by consumers for energy retail companies (ERCs) for the period of trust management of the ERCs;
• to ensure, at the time the contracts for trust management of ERC shares are entered into between RAO "UES of Russia" and the TGCs, that principal terms and conditions approved by this resolution are included in the contracts being made and that such terms and conditions are complied with;
• to provide preliminary information to the Board of Directors of RAO "UES of Russia" in the event that the terms and conditions of the contracts being made are different from the principal terms and conditions approved by this resolution.

* On 24 June 2005, the Board of Directors of RAO "UES of Russia" approved the principal approach to running energy retail companies to be used during the transitional period, which approach consists in the transfer of shares of the energy retail companies established as a result of regional energos' restructuring into trust management to the respective TGCs (based on their territorial configuration) for a term of one year.

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The Board of Directors of RAO "UES of Russia" approved the Restated Charters of all seven generation companies of the wholesale electricity market (WGCs).

The WGCs' Charters now include a provision that, during the period when the WGCs are wholly-owned subsidiaries of RAO "UES of Russia", the functions of WGC shareholder meetings are to be performed by the Board of Directors of RAO "UES of Russia".

Similar provisions were made to the Charter of RAO "UES of Russia" at the AGM held 29 June 2005.

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The Board of Directors of RAO "UES of Russia" accepted the resignation of Dmitry Zhurba as member of the Management Board and Financial Director of RAO "UES of Russia".

Anatoly Chubais, Chairman of the Management Board of RAO "UES of Russia", and Alexander Voloshin, Chairman of the Board of Directors of RAO "UES of Russia", appreciated the work done by Dmitry Zhurba as the Financial Director of RAO "UES of Russia". They said that Dmitry Zhurba created an efficient and effective system of budgeting, business planning and financial discipline at RAO UES Holding Company. Without such a system, it would not have been possible to reorganize the regional energos and preserve the manageability of the system.

According to Anatoly Chubais, the functions performed by Dmitry Zhurba as Financial Director, will be entrusted to Sergey Dubinin, member of the Management Board of RAO "UES of Russia".