LENENERGO 2004

2 GENERAL OUTLOOK Transmission lines by voltage less than 220 kV 97% 330 kV 1% 220 kV 2% The largest power company in the North-West Russia Installed capacity – MW, of which Hydro – 649 MW Franchise to 6.4 mln. people in St.Petersburg and Leningrad region covering 85.9 thousand sq.km We distribute 99% of electricity and 55% of heat consumed in the region Export access to Finland and Estonia Length of transmission lines Overhead transmission lines – 38.9 thousand km Cable lines – 15.2 thousand km

3 LENENERGO GENERATING CAPACITIES IN ST. PETERSBURG TPP-14 TPP-15 TPP-7Central TPP TPP-5 TPP-22 TPP-21 TPP-17

4 SHAREHOLDER STRUCTURE Foreing financial investors 18% Individual investors 7% RAO UES 49% Russian financial investors 5% Fortum 21%

5 PRODUCTION 2003 Installed capacity3 245 MW Working capacity1 785 MW Electricity generated mln. kW·h Electricity purchased mln. kW·h Electricity sold mln. kW·h ELECTRICITY

6 ELECTRICITY SUPPLY Electricity deliveriesGeneration Purchased electricity billion kWh F %3.1%5.1%0.8% ANNUAL GROWTH RATE, %

7 PRODUCTION 1H 2004 (in mln. kW·h) 1H H 2004 Electricity generated Electricity purchased Electricity sold ELECTRICITY

8 CONSUMPTION F2005 F2006 F THE MOST LIKELY SCENARIO WE ARE NOTICING A STEADY CONSUMPTION INCREASE SINCE 1999: From24.1 billion kwh in 1999 to28.9 billion kwh in 2003 billion kWh

9 mln. GCal F HEAT SUPPLY DUE TO EXPIRY OF KIRISHY LEASE

10 PRODUCTION 1H 2003 (thousand GCal) 1H H 2004 Heat generated Heat sold HEAT

11 II F FINANCIAL POSITION Revenue/net profit (mln. USD)Growth rate ( ) 250 % RevenueNet profit THE HIGHEST RESULT AMONGST OTHER REGIONAL AO-ENERGO

12 REVENUE SPLIT FOR ELECTRICITY Housing 20% Industry 48% Wholesales companies 9% Other consumers 3% Commercial sector 20% Transport 7%

13 REVENUE SPLIT FOR HEAT Other consumers 26% Industry 6% Social sector 68%

14 DEBTORS AND CREDITORS Debtors/Creditors RUR mln. Creditors Debtors

15 EFFECTIVE TARIFF SETTING SCHEMES Electricity kop/kWhElectricity kop/kWh Heat329.9 RUR/GCal Heat RUR/GCal Average current tariffs: St.Petersburg Leningrad Region Electricity, kop./kWh Electricity, kop/kWhHeat, RUR/GCal Heat, RUR/GCal Electricity, kop./kWh Heat, RUR/GCal DUE TO EXPIRY OF KIRISHY LEASE

16 GENERATION DEVELOPMENT IN 2004 TOTAL GENERATION INVESTMENTS IN 2004 — mln. RUR, of which:  own funds— 540 mln. RUR  long-term credit financing (EBRD)— mln. RUR  Power unit #1 of TPP-5 with installed capacity of 180 МW и 260 Gcal/h–– mln. RUR  Boiler installation on TPP-7 –– 200 mln. RUR  Turbine with installed capacity of 30 MW and 75 Gcal/h on TPP-15–– 58 mln. RUR

17 GENERATION DEVELOPMENT NEW CONSTRUCTION  Соnstruction of power unit #2 of TPP-5 (Steam Power Facility 300 MW and 200 Gcal/h) to supply heat to densely populated areas of Nevskij and Krasnogvardeiskij districts  Соnstruction of power unit # 4 of TPP “South” (SPF 300 МW и 200 Gcal/h) to supply heat to Frunzenskij and Nevskij districts  Соnstruction of circuit water supply system of TPP-14

18 PRESENT STRUCTURE MANAGEMENT Heat networkCPRР TPP-22 TPP-5 Central TPP TPP-7 TPP-14 TPP-15 TPP-17 TPP-21 TPP-8 HEPP-6 Cascade-1 Cascade-2 HEPP-13 Luzhskie Cable High-voltage Suburban Vyborgskie Gatchinskie Kingiseppskie Lodeinopolskie Novoladozhskie Tihvinskie Energosbit CIT IAC ASP ATP Generation Heat networksMaintenanceSalesServices Electric networks Assets share as of Generation Electric networks Heat networks Sales Maintenance & Services RESTRUCTURING

19 TARGET STRUCTURE MSK High-voltage MMSK C-З or Regional Network CompanyRegional Generating Company Energy Sales Company TPP-22 TPP-5 Central TPP TPP-7 TPP-14 TPP-15 TPP-17 TPP-21 HEPP-8 Luzhskie Cable Suburban Vyborgskie Gatchinksie Kingiseppskie Lodeinopolskie Novoladozhskie Tihvinskie Energosbyt Other non-core assets and services 100% OAO CPRP-Energoservice 13,8% ZAO North-Western TPP 3,46% OAO Power Machines HEPP-6 Cascade-1 Cascade-2 HEPP-13 Heat Networks Managing Company 21,6% OAO Petroenergobank 50% ZAO LEIVO 75% ZAO Petroelectrosbyt Management assets EIO

20 LENENERGO IS AN EXPENSIVE COMPANY COMPARISON OF INSTALLED CAPACITY COST Irkutsk Bashkir Samara Mos Sverdlov Kuzbass Novosibirsk Chelyab RUSSIAN AVERAGE LENENERGO CEZ (Czech) Huaneng Power (China) Copel (Brasil) Cemig (Brasil) Korea Electric Power (Korea) Developing Markets Average Endesa (Spain) Entergy (USA) Cinergy (USA) E-ON (Германия) Developed Markets Average AO-energo Installed Capacity (MW) Market Capitalization (mln US$), as of Cost of Installed Capacity (US$ / kW)

OUR AIMS FOR 2010

22 ELECTRICITY DEMAND FORECAST  According to forecasts electricity consumption in Russia will grow annually by 1,5-2,5%  By the year 2010 electricity consumption in the North-West region of Russia could grow by 20%  It is necessary to reconstruct the existing and build new electricity transmission lines and energy supply sources to satisfy the growing demand for electricity  The estimated need for investments in reconstruction and technical renovation of transmission lines, which supply our existing customers, amounts to more than 620 mln. USD. Thorough technical audit is needed to estimate real condition of the gridlines  Approximately 240 mln. USD of investments are needed for reconstruction and building new gridlines to satisfy growing demand

23 TARGETS  Growth of Net margin up to 20% (based on IAS)  Electricity generation efficiency ratio growth up to 45%  Strengthening our positions on the international capital markets REVENUE TARGETS PRODUCTION TARGETS Electricity Sales, TWh Heat Sales, mln.GCal , , , , , , ,