RAO "UES of Russia" presents companies established in the course of its restructuring: 6 thermal wholesale generation companies (WGCs), OAO "HydroWGC", 15 territorial generation companies (TGCs), including OAO "Far East Generation Company" (FEGC), OAO "UES Federal Grid Company" (FGC), OAO "UES System Operator-Central Dispatch Administration", and the regional Energy Retail Companies (ERCs). According to the reform plan, after the Parent Company is reorganized, the state will hold over 75 percent shares in OAO "UES FGC" and OAO "UES SO-CDA", as well as controlling interests in OAO "HydroWGC", "IDC Holding Company", and "Far East Holding Company". The thermal WGCs and TGCs and the energy retail companies will become privately owned. In 2006, the process was continued to create the companies of the intended final structure of the electricity industry. All 6 thermal WGCs and 10 out of 14 TGCs of RAO "UES of Russia" have completed their consolidation via share exchange and started to function as unified operating companies. In 2007-2008, the WGCs and TGCs will issue new shares to private investors and then will become independent of RAO "UES of Russia" after the Parent Company’s reorganization. The proceeds from the sale of additional shares are being used to finance projects to develop generation facilities. By now, six generation companies, WGC-3, WGC-4, WGC-5, TGC-1, TGC-3 (Mosenergo) and TGC-5, have completed their new share offerings, raising almost USD 10 billion in investments. WGC-5 and TGC-5 became Russia’s first private generation companies after they were divested by RAO "UES of Russia" in September 2007 during the first phase of the Company’s reorganization. Shares in energy retail companies owned by RAO "UES of Russia" will be sold through public auctions in 2007-2008.

The strategy and plans of further reform of RAO "UES of Russia" and the entire electricity industry are presented in the Annual Report 2006 of OAO RAO "UES of Russia",of which this booklet forms a part. This publication contains reporting data on the key areas of activities of the WGCs, HydroWGC, TGCs, ERCs, FGC, and UES SO-CDA in 2006: operational and financial results, results and prospects of investments, etc.

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