OREANDA-NEWS. May 17, 2012. Federal Grid Company of Unified Energy System (“Federal Grid Company” or "the Company”) (MICEX-RTS, LSE: FEES), announces that in accordance with the directive of the Government of the Russian Federation, the powers of the sole executive body of JSC IDGC Holding (“MRSK Holding”) (MICEX-RTS: MRKH; LSE: MRSK) will be transferred to Federal Grid Company.

This is expected to support a unified approach to the implementation of the technical policies and management principles for Russia’s electrical grid system, as well as to support coordinated work on development and modernization using innovative and high-technology solutions. Under unified management, the two entities are intended to implement unified investment, financial, economic and human resources policies. It is planned that this will help to maximize the human potential of the two companies while controlling costs. Common rules are expected to improve the reliability of electricity supply, as well as the transparency and efficiency of the technical connection of customers.

Establishing unified management standards should increase the independence and accountability of subsidiaries and affiliated companies, as well as establish a foundation for more efficient operations.

Combining the potential of the two companies is intended to accelerate the creation of a Network Code, which will govern the general principles and rules for businesses in the electricity sector.

Implementation of these measures is expected to increase the efficiency of the Russian power industry as a whole, and to have a positive impact on consumers.

In the near future this issue will be submitted for consideration to the management bodies of Federal Grid Company and MRSK Holding.

All further organisational and corporate measures aimed at merging Federal Grid Company and MRSK Holding will be undertaken with consideration for the interests of all shareholders and investors of both companies.