OREANDA-NEWS. JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on February 1, 2013.

The Board of Directors took a note of the results of execution of the Board of Directors’ instructions. Management of the Company reported the results of execution of the Board of Directors’ instructions of November 23, 2012 and December 10, 2012 related to the construction of power plants in the Far East, indicated in the President’s decree of November 22, 2012:

Heat and power plant in Sovetskaya Gavan’;

Yakutskaya power plant No.2 (1st stage);

Sakhalinskaya power plant No.2 (1st stage);

Blagoveschenskaya power plant No.2 (2nd stage).

Management of the Company informed about the financing procedure of power projects in the Far East and control the proper use of funds. The procedure provides for development and approval of the plants’ construction schedules in accordance with the requirements to documents of the state owned companies.

The projects are implemented in terms of RusHydro’s strategy of energy development in the Far East. The strategy involves the replacement of economically inefficient capacities with the efficient generation achieved through integration of hydro and heat power plants into the unified governance structure; signing direct contracts with consumers for the effective capacity as well as for the plants under construction; possible electricity export and implementation of the investment projects through a public-private partnership and project financing facilities. On December 22, 2012, the Company received the funds in the amount of RUR 50 bn from the federal budget to finance the implementation of the four projects in the Far East mentioned above.

The Board of Directors abolished the old procedure of selection of appraisers to determine the price of shares, property and other corporate assets of RusHydro approved on November 16, 2010. The Board of Directors defined that the appraisers are selected in compliance with the legislation of the Russian Federation and Regulations on the procurement for RusHydro’s needs.

The Regulations on the procurement were approved on December 5, 2011 and determine the procedure of the appraisers selection. The abolishment of the procedure is aimed to avoid the contradictions with the effective Regulations on the procurement.

The Board of Directors instructed the representatives of RusHydro in the management bodies of JSC Small HPP of Dagestan to approve the sale and purchase agreement on the Amsarskaya, Arakulskaya and Shinzanskaya small HPPs with total installed capacity of 3.8 MW, qualified as a major transaction.

JSC Small HPP of Dagestan (a 100% subsidiary of RusHydro) is the seller and RusHydro is a purchaser of the assets. The agreement is aimed at optimization of costs and operation of small power plants; and conditioning of the three small HPPs.

In 2006, RusHydro initiated a Program of development of small hydropower plants. The Program provided for implementation of the cost efficient projects in terms of construction of small HPPs, with installed unit capacity up to 25 MW. In 2007, the Novaya Energia Fund for development of the renewable power sources was established to act as the Program operator. RusHydro was one of the Fund's founders. However, after reducing RusHydro’s Investment Program in terms of the small hydropower plants development Program, in the 4th quarter of 2008 it was decided to suspend the construction of small HPPs implemented by the Novaya Energia Fund and to capitalize financial investments of RusHydro in the Novaya Energia Fund. In 2010, the Board of Directors approved participation of RusHydro in JSC Small HPP of Dagestan through acquisition of 100% of the company’s shares from the Novaya Energia Fund. Based on the results of examination of the current condition of assets and performance of the Novaya Energia Fund, the Amsarskaya, Arakulskaya and Shinazskaya SHPPs were considered to be prospective for further implementation.