Moscow, 29 August 2007. As a result of the tender to select an Advisor to provide support in forming the new configuration of Interregional Distribution Companies (IDCs), RAO "UES of Russia" has selected OOO "Otkrytiye Financial Corporation" and ZAO "Raiffeisenbank Austria".

The Advisor will provide services related to the merger of distribution companies with and into IDCs, including determining ratios for conversion of DC shares into IDC shares based on their fair market value determined by an independent appraiser.

The new IDC configuration was approved by the RAO UES Board of Directors on 27 April 2007. As resolved by the Board, the number of IDCs will increase from 4 to 11 (not including the IDCs in the Russian Far East). The new IDCs will be created based on the principles of territorial adjacency and comparable size of assets of the DCs within the IDCs.

Pursuant to the Board resolution of 28 and 29 June, the three new IDCs – OAO "Volga IDC", OAO "South IDC", OAO "Center and Privolzhye IDC" – registered with the authorities. OAO "Center and North Caucasus IDC" changed its name to OAO "Center IDC", OAO "Urals and Volga IDC" to OAO "Urals IDC", and OAO "Southern Grid Company" to OAO "North Caucasus IDC".

The intended corporate structure of the IDCs (except for OAO "Tyumenenergo", OAO "Lenenergo" and the IDC on the basis of the Moscow City and Moscow Region grid facilities*) is expected to be achieved after the DCs merge with the respective IDCs and DC shareholders exchange their shares for shares in the IDC.

As a result of the reorganization, the IDCs will be structured as unified operating companies having a comparable market value of their assets, about RUB30 billion. RAO "UES of Russia" will hold at least 50% plus one share in each IDC, so as to maintain its control over the distribution companies.