Moscow, 3 March 2008. RAO "UES of Russia" has today released a progress report on the implementation of its Investment Programme in January-February 2008.

On 20 January 2008, RAO UES brought on line the first hydroelectric power unit at the Sangtuda HPP-1 located on the Vakhsh River, Tajikistan. The plant's first unit of 167.5 MW became operational three months ahead of the original schedule.

On 8 February 2008, TGC-1 launched the construction of the fourth power unit at the Yuzhnaya CHPP-22. As a result of the expansion project implemented at the CHPP-22, a combined-cycle gas turbine will be brought into operation with the capacity of 450 MW of electricity and 355 Gcal/h of heat. The commissioning of the new power unit is scheduled for late 2009. As a result, the station's installed capacity will grow to 1,250 MW of electricity and 2,562 Gcal/h of heat. The project cost is estimated at RUB13 billion. The project will be financed with a combination of cash resources available to OAO "TGC-1", including the proceeds of the an additional share offering.

On 27 February 2008, TGC-4 launched the construction of a 240 MW combined-cycle unit at the Novomoskovskaya TPP. As a result of the project, the installed capacity of the station will increase almost twofold to 501 MW, and the electricity generation will more than quadruple. The project provides for the construction of a combined-cycle unit with two LMS100 gas turbine units manufactured by GE. ZAO "Energokaskad" won a general contract to modernize the TPP on a turnkey basis. The project cost is estimated at RUB7.7 billion. The project will be partly financed with the company's own and borrowed funds. The project is to be implemented in 2008 - 2010.

During the first two months of 2008, Federal Grid Company (FGC) carried out a significant amount of work to modernize and place into operation several transmission grid facilities. On 16 January, the Urals Transmission Grids branch of FGC started construction of the 500 kV Yemelino Substation project in the Sverdlovsk Region.

The project provides for the construction of a new 500 kV outdoor switchgear and installation of electrical equipment. It is also planned to commission two 500 kV autotransformer banks with the total capacity of 1,002 MVA. The entire project is to be completed in December 2008. The investments to be spent on the project will total RUB3.1 billion.

On 21 January 2008, the Southern Trunk Grids branch of FGC launched the construction of the 500 kV "Volgodonskaya NPP - Nevinnomyssk" transmission line. The 415 km-long line will cross the Stavropolsky Kray and the Rostov Region. The total amount of funds to be invested in the project to construct the transmission line and the substation will make RUB8 billion.

On 30 January 2008, the Urals Transmission Grids branch of FGC launched the construction of the 220 kV "Trubnaya" substation on the premises of the Pervouralsky Novotrubny Pipe Plant. The Urals Transmission Grids will invest about RUB500 million in funds in the project. The Pervouralsky Novotrubny Pipe Plant will pay RUB700 million to FGC. FGC will use these funds to construct transmission lines leading to the substation.

On 6 February 2008, the Urals Transmission Grids branch of FGC completed a major overhaul project and brought on line the 500 kV "Somkino" substation in the Surgut District of the of the Khanty-Mansiysk Autonomous Okrug. In the course of the project, the branch installed the third 501 MVA autotransformer bank at the substation, with the plant's overall capacity growing to 1,500 MVA. The cost of the installation work amounted to RUB300 million.

In mid-February, OAO "Kuzbassenergo Distribution Company" brought on line the first phase of the "Sputnik" substation (110/10 kV) with the capacity of 50 MVA. The project is scheduled for completion in 2009. The project cost is estimated at RUB162 million.

In addition, in January-February 2008, the distribution companies of RAO UES brought on line 9 modernized substations with voltages of up to 110 kV, and 90 km of distribution lines.