OREANDA-NEWS. JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that the Company's Board of Directors held a meeting in absentia on December 3, 2013.

In accordance with the President's decree on further development of RusHydro the Board of Directors approved a control model for construction of power facilities in the Far East of Russia. This model provides for signing a trust agreement between RusHydro and RAO ES of East, qualified as an interested-party transaction, and determined the price limit of the agreement in the amount of RUR 72,000 (incl. VAT), but no more than RUR 3,000 (incl. VAT) per quarter.

According to the agreement RusHydro will transfer the shares of CJSC Blagoveschenskaya TPP, CJSC Sakhalinskaya HPP No.2, CJSC TPP in Sovetskaya Gavan', CJSC Yakutskaya HPP No.2 owned by the Company in trust to RAO ES of East. These shares are ex-dividend and cannot be alienated, pledged or reassigned.

Before issuance of the President's decree the construction of these projects was included in the investment program of RAO ES of East (TPP in Sovetskaya Gavan' from 2010, other plants from 2011). RAO ES of East was also responsible for development of project documentation.

At this stage:

The whole package of design documentation for TPP in Sovetskaya Gavan' has been developed and approved by the Federal main directorate for government expert evaluation (Glavgosexpertisa);

Design of the Yakutskaya HPP No.2 and the second stage of the Blagoveschenskaya TPP has been completed, the technical part of project documentation has been approved by Glavgosexpertisa, the technical and economic parameters of both projects have been reviewed by independent engineering companies, winners of tender conducted by Sberbank.

Design of the Sakhalinskaya HPP No.2 project documentation has now reached its final stage and will be submitted for the government expert evaluation in the beginning of 2014.

Holding company RAO Energy System of East, part of RusHydro Group, is the largest supplier of electricity and heat power in the Far East of Russia. The company is responsible for operating and construction of power facilities in the region. Currently, JSC DGK (part of RAO ES of East holding) operates the Blagoveschenskaya TPP (the 1st stage). The installed capacity of the plant will be increased after construction of the second stage. The project is aimed to eliminate the deficit in thermal capacity and satisfy the increasing demand for heat power in Blagoveschensk city. DGK also operates the Mayskaya HPP in Sovetskaya Gavan' (Khabarovsk region), that will be replaced by the Sovgavanskaya TPP. Yakutskenergo (subsidiary of RAO ES of East) operates the Yakutskaya HPP which will be deactivated after completion of construction of the Yakutskaya HPP No.2. The period of service of the Sakhalinskaya HPP has expired; the plant will be replaced by the Sakhalinskaya HPP No.2. New power facilities are aimed to add new generating capacity, meet the increasing demand for electric and thermal power, create an additional capacity margin and improve reliability of power supply.

Taking into account a considerable experience of RAO ES of East in terms of power facilities management in the Far East region it is reasonable to transfer shares of newly established companies owned by RusHydro in trust to RAO ES of East under RusHydro's control for making decisions.