The Project Center for Asset Sales of RAO UES of Russia Power Supply Companies

2 Retail market participants: Electricity consumers; Power sales (retailing) companies; Suppliers of last resort; Transmission organizations and other owners of transmission facilities that provide transmission services; Producers of electric power – those that don't correspond to wholesale market rules, or other organizations having the right to sell, buy etc. electricity. What is a Power Supply Companies?

3 Supplier of last resort –Suppliers of last resort is a participant of wholesale and retail electricity markets, who is obliged to ente into contract with any consumer who applies to him (if this consumer lives within the supplier's area of operation). –Suppliers of last resort work in all regions of Russia, so any electricity consumer, wherever he lives, has the opportunity to enter into contract with a supplier of last resort. the following companies (working participants of retail markets) became suppliers of last resort: Power sales (retailing) companies established under reorganization of regional energy companies (AO-Energos); Wholesale companies-resellers, which meet the requirements imposed on them by retail market rules (for example, these companies are obliged to separate sales and transmission activities). Who is a “Supplier of last resort”?

4 The status of a supplier of last resort may be assigned to the companies proceeding from the results of an open competitive selection (tender). Before the first competitive tender is held, since adoption of retail market rules the Russian Federation Government has assigned the following entities to a position of a supplier of last resort (within the corresponding territories of the Russian Federation): –AO-Energos that haven't yet finished unbundling by activity type and (or) power sales (retailing) companies established under reorganization of AO-Energos; –Wholesale consumers-resellers and established on the basis of them retailing companies delivering electricity to population and other consumers financed from the consumer budget in the amount of no less than 50 mln KWh per year; –Power sales (retailing) companies providing services to consumers interconnected to the grids of open JSC Russian Railways; –Business entities using transmission or generation facilities that are not connected to the Unified Energy System of Russia or isolated energy systems (the so-called "islands" – a typical example – oil production companies owning their own diesel power plants). An exception is made for these suppliers of last resort – they will get the status of a supplier of last resort together with the corresponding property (without a competitive tender). Getting the status of a supplier of last resort

5 Sales of Shares in PSC Kuban, 49.00% Belgorod, 49.00% Vologda, 49.00% Kuzbass, 49.00% Nizhni Novgorod, 49.00% Orenburg, 100% Sverdlovsk, 49.00% Voronezh, 49.10% Karelia, % Kurgan, 49.00% Tver, 49.00% May 7 of 8 Companies of Tranche 1 st were sold: May 7 of 8 Companies of Tranche 1 st were sold: 5 October Astrakhan, 48.66% September 4 of 10 Companies of Tranche 2 st were sold: September 4 of 10 Companies of Tranche 2 st were sold: Question - how to sell not realized PSC further? total - 52, sold – 11, to sell - 41

6 Summer of 2007 the subject of the RFresults of tender The Petersburg area The tender took place To participation in competition three applicants are admitted: JSC “Petersburg marketing company”, “Тransneftservis-S”, “RCS- energy”. Open Society " Tyumen power supply company” has withdrawn earlier the submitted competitive application. The winner of competition on status of a supplier of last resort across Leningrad region has been recognized by “RCS-energy”. The Nizhniy Novgorod area Competitions are declared on 5 zones instead of 4 existing The RST of the Nizhniy Novgorod area spends opening envelopes of participants The RST of the Nizhniy Novgorod area declares results of competition, and declares winners on 2 zones: 1 zone - in a zone JSC “Rusenrgosbyt” - the winner is JSC “Rusenrgosbyt”. 2 zone - the incorporated zone of activity of JSC “Nizhniy Novgorod PSC” and “Volgaenergysbyt” - the winner is and “Volgaenergysbyt” Sverdlovsk area Competition is declared on 3 zones instead of 7 existing competition should take place, but in connection with that all applications have been withdrawn - competition did not take place Tenders for the status of a supplier of last resort

7 Changes in 530 Governmental resolution* * Russian Federation Government Resolution № 530 of August 31, 2006 "On Approving the Rules of Operation of Retail Electricity Markets during the Transition Period of Electricity Industry Restructuring" 28 August Board of Directors of RAO UES of Russia 28 August Board of Directors of RAO UES of Russia The principles directed on change of existing regulations about purpose (change) status SLR: 1)On terms of carrying out of the first next tenders -The first next competition on status SLR not earlier than 2010 and not later than 2012; -The winner of first and each following next tender starts execution of functions SLR since January, 1st of the year following after year to which competition is lead. 2) Concerning total elapsed time of output SLR of 2-nd level on the wholesale market – SLR 2-nd level should leave in the open market and to begin purchase capacities in the open market as the full participant not later on January, 1st, 2010; -Earlier the output is admissible, but only since January, 1st of year ( , ); -If the SLR 2-nd level has not executed the requirement till it loses the status of SLR and its zone of activity joins in a zone of activity SLR of 1-st level 3) Concerning the bases for change of zones of activity before the first tender and further -Changes only on results of the next tender if executed requirements (condition) the winner on new zones also is revealed -Before the first nexttender only in 2 cases: at inclusion of a zone of activity SLR of 2-nd level in a zone of activity SLR of 1-st level, at presence of the consent of all SLR, which such decision concerns

8 Sales of Shares in PSC – November November 19 companies: 12 PSC of Tranche 2 & 7 PSC of Tranche November 19 companies: 12 PSC of Tranche 2 & 7 PSC of Tranche %Tula 52.00%Tomsk 49.00%Perm 49.00%Orel 49.00%Omsk 49.00%Novgorod 64.40%Mari 49.00%Lipetsk 49.00%Kostroma 48.20%Kirov 49.00%Vladimir November, %Buryat Date of auction % from the Authorized capital The name of the company 48.43%Rostov %Hakasiya 49.00%Udmurtiya 55.12%Stavropol 50.11%Komi 49.00%Bryansk November, %Astrakhan The essential conditions of auctions will be known on October, 25th

%Chita 49.00%Ulyanovsk 48.70%Smolensk 48.40%Saratov 55.50%Samara 49.00%Ryazan %Pskov 53.10%Mordovian 49.00%Kursk 49.70%Ivanovo 49.00%Volgograd March, %Arkhangelsk Date of auction % from the Authorized capital The name of the company 49.00%Chelyabinsk %Tyumen 49.00%Tambov 49.00%Petersburg 49.00%Penza 50.90%Moskow May, %Krasnoyarsk Sales of Shares in PSC – March-May March 12 PSC of Tranche 4 & 1 PSC of Tranche March 12 PSC of Tranche 4 & 1 PSC of Tranche 1 The essential conditions of auctions will be known on December, 10th

10 Why Power Supply Companies? We offer you access to efficient and dynamic business through control over market leaders with unique expertise in the fields of safety, customer service, reliability, with unbeatable manpower. We provide you with great opportunity to develop your presence in the Russian energy market creating strong alliances with Russian investors. We give you the chance to release huge and underutilised value from operating in the retail market

11 Contact Information Ekaterina I. Novokreshchenykh First Deputy Head of the Project Center Tel: +7 (495) Mob: +7 (495) Fax: +7 (495) Tatiana O. Bondareva Deputy chief of department on realization of actives of the Project Center Tel: +7 (495) Mob: +7 (916) Fax: +7 (495)

12 Novosibirskenergo&Bashkirenergo Novosibirskenergo: Generation Novosibirskenergo consists of 12 thermal stations with, total capacity MW Production indicators: Electric generation in ,9 bln kWh Financial indicators: Company’s earning in 2006 – 20,2 bln RUR, Net profit in 2006 – 328,9 mln RUR RAO UES of Russia owns 14,18% of authorized capital Bashkirenergo: Generation Bashkirenergo consists of 1GRES, 11 TPP, 2 hydro-electric power station, 5 GTP and etc. Total capacity ,9 MW Production indicators: Electric generation in bln kWh Financial indicators: Company’s earning in 2006 – 37,7 bln RUR, Net profit in 2006 – 832 mln RUR RAO UES of Russia owns 22,27% of authorized capital