OREANDA-NEWS. August 20, 2007. Approval was granted to the purchase of additional shares issue in JSC “RusHydro” placed by closed subscription in favour of RAO UESR, the Russian Federation and the option programme Operator (OOO EZOP).

The placement price per share will be determined by the Board of Directors of JSC “RusHydro” on the basis of an assessment report drawn up by a consortium of independent appraisal firms including ZAO Deloitte & Touche CIS, “The Institute for Enterprise Issues Company Limited”, "ABM Partner, CJSC", ZAO Professional Appraisal Centre and ZAO Russian Appraisal.

The market value of one share in JSC “RusHydro”, according to the report submitted, amounts to 1.73 roubles.

The given report is recommended for the transaction by the Federal Property Management Agency and the fairness of the financial terms and conditions of the placement with respect to the market value is confirmed by a consortium of investment banks consisting of BNP PARIBAS SA, KIT FINANCE INVESTMENT BANK, and IFC METROPOL.

Within the scope of the additional issue, RAO UESR is acquiring shares in JSC “RusHydro” for a total amount of 17.1 billion roubles. The shares are paid for with cash and shares in the following subsidiaries of RAO UESR , which are core businesses for JSC “RusHydro”: SC “Zelenchuk HPS”, JSC "ZHS", , JSC “Sulakenergo”, JSC “Vilyuiskaya HPP-3”, JSC “ESKO UES”, JSC “Hydrogeneration Company of North Osetia”, JSC “Krasnoyarskaya HPP”, "Geotherm JSC", and JSC “OP Verkhne-Mutnovskaya GeoPP”.

The conversion ratios have been approved per share in JSC “RusHydro” for the shares in the 22 ÀÎ-HPPs to be affiliated by JSC “RusHydro”.

The conversion ratios were determined on the basis of the market value of the shares in the companies to be affiliated and the shares in JSC “RusHydro”, as decided by a consortium of independent appraisal firms including "The Institute for Enterprise Issues" Company Limited, "ABM Partner, CJSC”, ZAO Professional Appraisal Centre and ZAO Russian Appraisal and ÎÎÎ Appraisal firm BINOM® as of 1 April, 2007. The fairness of the financial terms and conditions of the restructuring with respect to the conversion ratios was confirmed by a consortium of investment banks including BNP PARIBAS SA, KIT FINANCE INVESTMENT BANK, and IFC METROPOL.

The following numbers of shares in the joint-stock companies affiliated into JSC “RusHydro” are to be converted into one ordinary share in JSC “RusHydro” with a nominal value of 1 rouble:

0.9753053055711250 ordinary registered shares in JSC “Bureya GPS” with a nominal value of 10 roubles;

0.0924777120278805 ordinary registered shares in JSC “Volzhskaya HPP” with a nominal value of 1 rouble;

0.1009802489930990 registered preferred shares type À in JSC “Volzhskaya HPP” with a nominal value of 1 rouble;

0.0791401964646080 ordinary registered shares in JSC “Votkinsk HPP” with a nominal value of 1 rouble;

0.0864164626169556 registered preferred shares type À in JSC “Votkinsk HPP” with a nominal value of 1 rouble;

0.4735290884122240 ordinary registered shares in JSC “Regional Power Generation Company of Daghestan” with a nominal value of 0.4 roubles;

0.1660809314517490 ordinary registered shares in JSC “Zhigulevskaya HPP” with a nominal value of 1 rouble;

0.1813506567501080 registered preferred shares type À in JSC “Zhigulevskaya HPP”with a nominal value of 1 rouble;

2.0118517662031500 ordinary registered shares in JSC “Zagorskaya HPSP” with a nominal value of 0.1 roubles;

0.1611471300891550 ordinary registered shares in JSC “Zeya HPS” with a nominal value of 1 rouble;

0.1759632344279920 registered preferred shares type À in JSC “Zeya HPS” with a nominal value of 1 rouble;

0.7265321674568300 ordinary registered shares in JSC “Zelenchuk HPS” with a nominal value of 10 roubles;

0.7904875674830130 ordinary registered shares in JSC “Hydrogeneration Company of Kabardino-Balkaria” with a nominal value of 1 rouble;

0.1207407869959820 ordinary registered shares in JSC “KabbalkGES” with a nominal value of 10 roubles;

0.0000447998082296 ordinary registered shares in JSC “Kamskaya HPP” with a nominal value of 346 roubles;

0.0999039271877230 ordinary registered shares in J JSC "Cascade of Verkhnevolzhskiye HPPs" with a nominal value of 0.5 roubles;

3.3200447514601600 ordinary registered shares in JSC “Cascade of Hydroelectric Power Stations of Lower Chereck” with a nominal value of 1 rouble;

0.0012607083225520 ordinary registered shares in JSC “Nizhegorodskaya HPP” with a nominal value of 1 000 roubles;

0.0017846014274298 ordinary registered shares in JSC “Saratovskaya TPS” with a nominal value of 1 000 roubles;

0.3757435019735730 ordinary registered shares in JSC “Hydrogeneration Company of North Osetia” with a nominal value of 1 rouble;

0.4675003089462080 ordinary registered shares in JSC “Stavropolskaya EGC” with a nominal value of 0.56 roubles;

0.5104829754817740 registered preferred shares type À in JSC “Stavropolskaya EGC” with a nominal value of 0.56 roubles;

0.3177272339096330 ordinary registered shares in JSC “Sulakenergo” with a nominal value of 10 roubles;

0.0482446653903393 ordinary registered shares in JSC Sayano-Shushenskaya HPP with a nominal value of 1 rouble;

0.0526803509394403 registered preferred shares type À in JSC Sayano-Shushenskaya HPP with a nominal value of 1 rouble;

0.1103464122150060 ordinary registered shares in JSC “Cheboksarskaya HPP” with a nominal value of 8.2 roubles;

0.0000577426386387 ordinary registered shares ZAO EOZ with a nominal value of 30 000 roubles;

0.0002368251781486 ordinary registered shares in JSC “Irganaiskaya HPP” with a nominal value of 1 rouble.

The Board of Directors of RAO UESR also instructed its representatives on the Boards of Directors of subsidiaries ( JSC “RusHydro”, JSC “Irganaiskaya HPP”, OJ-SCo “Bureya GPS”, and JSC “Hydrogeneration Company of North Osetia” and JSC “KabbalkGES”) to vote for all resolutions necessary for affiliation by JSC “RusHydro” in accordance with the approved ratios.

It is proposed that Extraordinary General Meetings of Shareholders of RAO UESR of JSC “RusHydro” and of the AO-HPPs to be merged into JSC “RusHydro” be held in September-October 2007. It is planned to complete the affiliation of 21 ÀÎ-HPPs by JSC “RusHydro” by January 2008 and that of JSC “Irganaiskaya HPP” by July 2008.