Moscow, 30 April 2008. RAO "UES of Russia" and the Government of the Komi Republic have signed an Agreement on Cooperation in Development of the Republic's Energy System until 2012.

The Agreement is designed to improve the reliability of electricity supply, increase the network throughput capacity, create the conditions for new user connections to power grids and increase the capacity available for users already connected, and prevent power shortages amid growing electricity consumption in the Republic's energy system.

Under the Agreement, in 2008-2012, several projects will be implemented in the region to build power plants and grid facilities.

The generation projects will include construction of a CHPP with a capacity from 70 to 130 MW near Syktyvkar which will solve the problem of heat and electricity supply in Syktyvkar and the southern area of the Republic of Komi and a 225 MW HPP near Syktyvkar, which will make it possible to connect new consumers to the grids.

The key project in the region's transmission grids will be the construction of the second circuit of the 220 kV line Pechorskaya HPP – Ukhta – Mikun. Implementation of this project will help increase the plant's load and ensure electricity supply to the southern region of the Republic of Komi. This line will make it possible to connect new consumers to the grids, eliminate the electricity shortage in the southern energy node, and reduce the current load on the existing lines.

The amount of funds needed to finance the capital investment projects in the grid sector alone is estimated at nearly RUB10.5 billion, of which RUB7.3 billion will be used to develop the UNEG networks and RUB3.2 billion will be invested in the distribution grid infrastructure.

The projects will be financed with a combination of equity and debt raised by OAO "TGC-9", OAO "UES FGC", and OAO "North West IDC", as well as the connection fees of the grid companies, depreciation reserves, and borrowed funds.