Moscow, 16 May 2008. The Tender Commission of RAO "UES of Russia" has completed acceptance of bids for the "government stake" shares in OAO "Volzhskaya TGC" held by RAO "UES of Russia".

Upon review of the bids, the Tender Commission accepted the only bid for the Volzhskaya TGC stake submitted by Berezville Investment Limited.

 Berezville offered RUB2.848 per ordinary share in Volzhskaya TGC, or US$520 per kW of installed capacity (based on the USD/RUB exchange rate set by the Central Bank of Russia as at 15 May 2008).

As a result of sale of the "government stake", RAO UES is to raise about RUB27.5 billion in funds, or more than $1.152 million. The proceeds from the sale of the "government stake" shares in TGC-7 will be used to finance the investment programme of Federal Grid Company.  

After the sale of the "government stake", RAO UES will hold 15.28% of Volzhskaya TGC. These shares will be distributed among the RAO UES minority shareholders during the final phase of the Company's reorganization.

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To date, additional share offerings have been completed at 17 WGCs and TGCs. These are WGC-2, WGC-3, WGC-4, WGC-5, WGC-6, TGC-1, TGC-2, Mosenergo (TGC-3), TGC-5, Volzhskaya TGC (TGC-7), SGC TGC-8, TGC-9, TGC-10, Kuzbassenergo (TGC-12), and Yeniseyskaya TGC (TGC-13). The total amount of funds raised through the share offerings made RUB442.63 billion. These funds will be used to finance the generation companies' investment projects.

Another RUB360.85 billion in private investments was raised as a result of sale of the "government stake" shares in 13 generation companies—WGC-3, WGC-4, TGC-1, TGC-2, Mosenergo (TGC-3), TGC-4, TGC-6, SGC TGC-8, TGC-9 TGC-10, TGC-11, and Yeniseyskaya TGC (TGC-13) as well as the "blocking stake" in WGC-5. The proceeds from the sale of "government stake" shares will be used to finance the investment programmes of FGC and HydroWGC.

Thus, taking into account the sale of the "government stake" in Volzhskaya TGC, the total amount of funds raised from private investors for the Russian electricity sector through the issuance and sale of shares in WGCs and TGCs will reach nearly RUB831 billion.