Seven years of work in RAO "UES of Russia" which were the years of the development of the electricity industry reform, were the most eventful ones in my professional life. The past events were as exciting, as gifted were the people around me.

I am glad and proud that my department has made its contribution in solving the key issues of financial recovery at energy companies. We were the first in the sector to introduce instruments of regular management tools at our companies, such as business- and financial planning, costs management programmes, new principles of dividend policy, management control system based on the key efficiency indicators. This helped the subsidiaries and the Parent Company, RAO "UES of Russia", prepare for the structural reform and efficiently implement the reorganizations as well as possible.

It is certainly a bit sad that the team of RAO "UES of Russia" which many times demonstrated its ability to implement most complex projects, "is playing the second half". But, on the other hand, each team member is getting a unique and invaluable experience. It is the completion of the reorganization that, in my opinion, is the most challenging task.

Once Napoleon said, "Descendants will forget my battle victories, but my Civil Code will serve France for a long time." Our descendants will assess the results of the electricity industry reform, but the work done by lawyers in the course of the reform will be used in future and will drive the development of many branches of Russian law. Besides the fact that we created new laws and regulations for the electricity industry, the reform implementation called for amendments and additions to the Civil Code, Tax Code, Federal Law On Joint Stock Companies, and to a number of other key regulations. Specifically, a number of regulations providing for double taxation of shareholders have been cancelled and many corporate law institutes have been improved. I am sure that many companies need these amendments.

A significant amount of work needs to be done to improve the competition, corporate and tax legislation in order to complete the industry reform. I hope that this work will be appreciated no only as a contribution to the industry reform, but also as a contribution to the development of Russian law.

Personally, the electric power sector reform is the best part of my professional life. During this period we've made a long way from the administration management system to the best practices of corporate governance. Among my achievements I see the adoption of Rules for the interaction with our subsidiaries approved by the Board of Directors of RAO "UES of Russia". It's not only RAO "UES of Russia" but other companies who benefit from this document.

A big part of my job was to make corporate procedures keep pace with the reform process. Special committees were set up under the Board of Directors. The key task was to ensure maximum transparency of the decision-making process and provide the operational system of information disclosure for all stakeholders.

It's nice to see that our efforts were appreciated by the professional investment community. RAO "UES of Russia" enters Top-5 of Standard and Poor's Rating in terms of transparency as well as is a winner named by the Investor Protection Association in the following categories: "Company with the Best Corporate Governance", "Company with the Greatest Influence on the Development of Corporate Governance" and "Company with the Best Investor Relations System".

The reform in electricity industry gave the Company's staff, including myself, a fantastic chance to use our professional potential for the sector's benefit. Our work resulted in the launch of an electricity market, with investments booming, and the energy industry turning into the Russian economy's locomotive. The reform created the conditions for development based on innovation, implementation of new technologies, improvement of management quality due to the possibility to draw from the experience of leading energy companies. A career in the electricity industry has become very attractive. But simultaneously, a fight for talents started to be part of the HR policies at energy companies.

The efforts made by energy companies have changed not only our industry. The electricity reform also means the creation of jobs in power engineering, construction and other industries, research and development institutions, the increased demand for qualified personnel, revival of the system of professional training and development of innovation technologies in universities. We have created mechanisms which will work for a long time afterwards. After all, all this helps improve the standard of living of Russia's citizens, strengthen the state and the country's independence.

A subtle matter called "international relations", or "international social links" in management theory, is incompatible with haste, aggressiveness, and militant self-assurance.

The people working in the RAO UES Foreign Relations and Protocol Department are a perfect match for this work, they are good-humoured, even-tempered people with a good taste. During the reform years, the ability to patiently create multistage alliances and our team spirit helped our small team make a modest contribution to formation of a new model of the modern international community. This is a model which is impossible without the voice of the Russian energy industry, a model which makes it possible that the Europeans view the Russian model as an example.

We are very lucky to be involved in the process of creation of the "future that is in the making now".

The sheer excitement of our involvement in what we believe is the most large-scale sector reform in the Russian history, the unforgettable feeling of involvement in writing a textbook of Russian economic history will always remain in our hears and minds.

For me, the reform started in the 1980s when I worked in the energy system of Ukraine, which was a Soviet Republic at that time. In that period, UK launched deregulation in the energy sector. My colleagues and I got very enthusiastic about creating something similar to the UK market. We made our first steps: spun off HPPs and NPPs from the energy systems, united HPPs into a single structure, and made each NPP an independent market participant. Our experience was interesting for the energy sector of the USSR, but the Soviet Union had collapsed before we managed to use the model in the entire UES.

In the process of creating RAO "UES of Russia", a special market entity was established, FOREM that everyone remembers very well. From today's point of view, it was a "quasi-market", and besides that, it operated in the 1990s, which was the most difficult period for the energy industry, remembered for non-payments and surrogate means of payment. However, even in such an environment, we were able to develop market mechanisms and instruments, including financial, which later helped create a market that was closer to a real competitive market.

Now Russia's electricity market is a reality. Phases of its further development have been determined: 100% liberalization by 2012, which is not far off. We certainly want to see the results, as we have made so many efforts. On the other hand, haste never breeds success. That is why I view the deadline as optimal. And the fact that RAO "UES of Russia" will not participate in the final phases of liberalization is the natural outcome of the process. Market participants, infrastructure and mechanisms have been created. And I am sure that thy will work efficiently.

Restructuring in the electricity sector is a huge step towards establishment of civilized relationships both in business and in our society as a whole. Electricity industry, one of the most conservative industries, has demonstrated an impressive example of revolutionary self-improvement. The result is understandable and easy to see, and in many cases it can be assessed in terms of scope and number of new construction sites.

The ambitious plan of the reform comprised hundreds of projects, many of which were unique, and almost each of them was "tailor-made". We had to make plans, convince others, and implement our plans. We have been able to make it. It must be always interesting to make a revolution. But making a revolution when the creative and intellectual potential of each team member was always in demand was great luck.

Several years ago we said to each other, "RAO must be wound up, and we will be sacked soon. Either because we failed to accomplish this task, or because we made it." We will implement the last task. The time has come.

I think that financial officers were the first to feel the effect of the reorganization in the electricity sector. Before the reform, payments for electricity were extremely irregular. The use of modern instruments of liquidity management at RAO "UES of Russia" and its subsidiaries was a problem, not to speak of financial planning. That was why the first phase of the reform was designed to achieve the Company's financial turnaround.

During the years of work, we managed to turn the budgeting process at RAO "UES of Russia" into a smooth-running mechanism. The treasury system of payments made it possible to make the Company's expenditure more transparent and its financial statements easier to understand for its shareholders. In terms of financial management, RAO "UES of Russia" turned from a "half-ministry" into a company meeting the global standards.

My colleagues and I take a pride in the fact that under the demerger balance sheet prepared for the reorganization of RAO "UES of Russia" no accounts payable will be transferred to the spin-off companies. Compare that to just a few years ago, when the Company's payables were counted in millions of rubles.

I believe that, in the first place, for the country, as well as for the sector, the most important thing is that the reform process was implemented stepwise and was thoroughly elaborated. The ten-year reform was like spring-cleaning. We examined what we had, put everything in order, and decided how to use it more efficiently.

As experts say, the industry has become transparent. No wonder. Private investors, including major foreign corporations, have come to the sector. Obviously, they purchase electricity assets because they have positive expectations about the companies' prospects and efficiency of their investments. This undoubtedly is a positive result of the reform for the country, because we have not only been able to attract multi-billion investments, but also have created companies meeting high technological and corporate standards.

The reform in the electricity industry means several years of my life for me. I cannot assess so far how efficiently these years were spent. But I have no doubt that participation in the electricity industry reorganization was participation in a large-scale process which is unique in the modern history.

Our reform demonstrated that the most difficult and complex projects such as reorganization of one of infrastructure sectors of the economy can be successfully implemented in Russia. The goals set during the first phase included development of the electricity industry by providing incentives for investment, increasing efficiency of energy companies, and ensuring reliable and uninterrupted power supply to customers.

I believe that in the course of the reorganization, the sector will change and become technologically advanced. It will operate in a market environment and offer high-quality services and products in areas where it will be able compete for customers. It will also be very reliable and develop steadily in the areas where it is necessary to demonstrate its infrastructural potential.

For me, the electricity industry reform was a turning point, in all its aspects of my life, even personal. The most significant things were my work in a very professional, out of the ordinary, brave "market" team, getting acquainted with the country and remarkable people working in the energy sector, and a chance to see how the reform plans became an everyday reality. Another thing is the responsibility to my parents who devoted their entire life to the electricity industry. I had to justify their confidence that the reform was to the sector's benefit. My daughter also came to work in the electricity industry. So now we are an "energy sector dynasty".

During the years of reorganization, the reformers did a tremendous amount of practical work which is unprecedented in the history of our economy. Some part of this work was done by me and I am proud of my involvement in it.

Thorough corporate work, detailed elaboration of the resolutions, careful preparation of materials lies behind the resolutions approved by the Management Board which served as a for of the restructuring of RAO "UES of Russia" and it subsidiaries. Document management is sometimes called dull, but I believe that without streamlining the process it would be impossible to keep pace with the reorganization. Providing support to activities of the Management Board, organizing its activities, setting down its resolutions and providing information about them, strict control over execution of its instructions — all that led to the final result and contributed towards the completion of the industry reform.

The reform in the electricity industry is a tremendous project. After it is completed Russia will have a much more perfect electricity industry. An industry which will be able to face all new challenges and, in the future, will help Russia materialize its immense potential.

A lot has been done. Restructuring at the regional energos has been completed. In a few months, after the final phase of reorganization of RAO "UES of Russia" is completed, the key idea of the reform will be accomplished: to preserve the prevailing role of the state in the consolidated and unified infrastructure and make the thermal generation companies completely private. This, as well as the free market pricing, will help double the capability of the Unified Energy System created back in the Soviet era, and then create the conditions for its further improvement.

For me, the reform was a chance to implement a project that is unparalleled in the world neither in terms of scale, nor in terms of time which required from me and my colleagues everyday hard work. And we were a success!

I believe that the result of the reform in the electricity industry might be compared with the large-scale reforms which took place in Russia back in the 1990s. Moreover, unlike most other reform projects, for instance, the reform in the residential utilities sector, the electricity reform has been fully implemented. It was thanks to the reform that the sector was able to overcome the crisis of the post-Soviet period and create a strong potential for rapid, long-term development.

The most complex, but exciting period, in terms of both professional and personal development, was the period of work on the legislative package on the electricity reform. Actually, in 2002, we began to promote the laws which were needed for the success of the reform amid vigorous resistance from various political forces. This resistance was especially pronounced in the State Duma. And the fact that we did manage to reverse the situation in very short time, get the backing of the deputies and have the laws adopted is the fantastic success achieved by our big team. I think we have grounds to be proud of ourselves.

Being an economist, I am sure that liberalization of the electricity industry will make it possible for us to prevent the technological lag and turn Russia into one the world's major energy powers.

The reform was based on accurate calculations. Industry experts were aware that the electricity industry was in urgent need of change—the capacity reserve was not endless, and we did not have the funds needed for a large-scale modernization. I have been in the business of setting tariffs for many years and know that regulated sources of financing investments in the electricity industry are limited and that even a many-fold increase in tariffs is not a panacea.

The reform created a strong impetus and motives for development of the electricity sector and related industries alike. At the same time, the reform led to the emergence of new risks related to deregulation, that is, a greater degree of uncertainty. Some sectors that are vital for the electricity industry are beyond the market reach. That is why I personally intend to continue to be involved in energy market analysis and forecasting, issues of electricity industry development, environmental efficiency of the sector — all things that can make the market more stable, and the electricity industry development more comprehensive, balanced and geared towards customers' interests as much as possible.

I believe that the positive effects of the reform on electricity industry are felt not only inside the sector. The reform helped create the economic and technological conditions for improvement of competitiveness of all industries related to the electricity sector, from power engineering to metallurgical industry.

We see growing liquidity of shares in the companies established as a result of regional energos' functional unbundling by lines of business and increase in their capitalization. There is a great demand for shares in the companies spun off from RAO "UES of Russia". Investors knowledgeable about the energy industry are already purchasing shares in the companies they are interested in. No wonder that shares of RAO UES subsidiaries are among the Russian blue-chips and their prospects on the stock exchange after the reorganization of the Parent Company look very good.

I would like to note that the unbundling was based on determination of the fair market value by independent appraisal firms. It was applauded by the market resulted to increased capitalization of energy companies. The reorganization of RAO "UES of Russia" created incentives for the development of appraisal business in Russia. Appraisal firms learnt to do a significant amount of high-quality work and produce appraisals of energy assets within very short time frames. And in fact, this is the legacy RAO "UES of Russia" will leave to the country.

The experience of the Russia's electricity reform is important not only for our country. The global energy industry has entered a period of change, when the most difficult thing is to reach a balance of commercial, social, and environmental interests.

We believe that, in general, Russia has been able to find an efficient solution to this problem. To achieve this objective, we had to systematically address non-financial risks, develop new ways of cooperation with a broad range of stakeholders, including by involving them in the development of corporate policies and standards, create new corporate social responsibility practices and new social-oriented model of sector management.

A possibility to contribute to that process is a great luck for any professional. Work at RAO "UES of Russia" gave us such a chance. In my work, I was able to implement systemic changes and help particular people. I will keep letters of appreciation to the Customer Relations Groups sent by various people, from a pensioner to a Hero of Russia, as mementos. And certainly, among them will be the international and national awards for achievements in the CSR area given in 2007 not only to RAO "UES of Russia" and to its subsidiaries. They are a guarantee that the electricity industry will adhere to the CSR principles after the reform is completed.

It is my strong belief that Russia has implemented the best of the world's models of electricity reform. I cannot but note efficient skilful transformation of this model into the country's economic, political, financial system. I am glad that, at its final investment phase, the reform is hailed by the society, people are increasingly aware of its social importance.

As for the restructuring of the research and development complex, in which I have been involved since 2000, I am proud to say that the competitive, diversified engineering centres offer a wide range of services and have large market capitalization. Time has shown that we were right when we insisted on such form of reorganization of the research and development complex. Engineering centres have been able to adapt themselves to the new structure of the electricity sector by getting involved in the implementation of the RAO UES investment programme, and address the key task of the sector's investment development.

It is hard to overestimate the energy sector reform for our country. In the first place, it resulted in large-scale investments made in the economy, including investments made by foreign companies in the energy sector. Today, they purchase electricity assets on equal terms with Russian investors.

As a consequence, the investment inflow makes it possible to ensure electricity supply to accommodate the demand from Russia's growing economy. The launch of new capacity is not financed by consumers, as it was the case in the past. Besides that, the reform makes it possible for energy companies to use best international practices and introduce state-of the-art technologies in their projects.

Participation in the reform gave me new chances for self-development, invaluable experience of work in a brilliant team of managers, satisfaction with my achievements, and new business contacts for life and work after RAO "UES of Russia".

I am sure that no company has managed to get as vast experience in the area of Investor Relations as RAO "UES of Russia". We were happy to work with 400,000 shareholders, among which was the Government, strategic and portfolio investors, and the most numerous group — private individuals. We had to present to our investors and shareholders the concept of one of the most large-scale projects in the world designed to reform the sector and the Company.

Our path to the shareholders' hearts was thorny. We have become a truly transparent company. We have built cooperation with the investment community, regularly organized events with the participation of senior managers, produced information products, and promptly provided information about the key decisions. All that helped the market to adequately assess our Company and take investment decisions. Ultimately, we managed to obtain approval and support from our shareholders, and we are very grateful for their confidence. It was confirmed by voting the EGMs where shareholders backed the proposal to reorganize RAO "UES of Russia". The qualified majority of shareholders voted FOR the reform.

I believe that bookkeeping is one of the most conservative spheres, and the reform gave the financial and accounting staff of the RAO UES energy companies a unique chance to make their work more creative.

I joined the Company in 2001, when all the conceptual aspects of the sector reform had already been worked though and its implementation had started. Most processes, including those in the area of bookkeeping, were taking place for the first time in Russia. Functional unbundling of the regional energos, revaluation, opening balance sheets of the newly-established companies, and finally, a great deal of work to prepare the demerger balance sheet for the Parent Company: these activities took months and years of thorough work which accountants have never been afraid of. I believe, we have broadened the scope of our profession and raised it to a qualitatively new level.

I am also happy that our efforts have resulted in the introduction of a new financial culture in energy companies. Preparation of the IFRS financial statements, use of the state-of-the-art software, professional training and development of the staff working in the accounting divisions — all these measures have helped improve the financial discipline, stability and investment attractiveness of energy companies and, accordingly, gave a boost to the sector reform.

My colleagues and I, who are very active in life, couldn't have found a better environment for professional growth than that in RAO "UES of Russia" at that time. I took part in maybe the most interesting period of the reform when we gained new experience of transition from principles and schemes elaboration to their practical implementation. We literally "manually" unbundled regional energos, later on it became a technology. Consolidation, first operational activities, WGCs and TGCs' financial results — all these are similar to a baby's first steps. Well, take a look at them now! Our "babies" have grown up, went through IPOs, launched investment programmes. Not long ago all this was just a concept on paper. Today we have large companies with millions of staff, capitalization and cash flows of billions. All these tough hard-working years went down in the professional and good team of RAO "UES of Russia". I would like my next job to be similar to five years I have spent in RAO "UES of Russia".

We made almost all the ten-year process of reorganization in the electricity industry absolutely transparent. At every phase, from suggestion and discussion to adoption of resolutions and on to their implementation — all parties concerned had a chance to access the information. Ministries and agencies, governors, minority shareholders, analysts, scientists, economists, and journalists became active participants of the reform.

A pool of sector experts, analysts, and "electricity" journalists emerged over these years. Nothing missed their attention, everything was analysed, discussed, and sometimes subjected to criticism. Involvement of such a wide range of participants increased the responsibility of the Management Board of RAO "UES of Russia" for information disclosure.

All these years, we at the media relations department have been convinced that "no comment" is the most unprofessional and unsuitable answer to a journalist or analyst. We taught our subsidiaries established in the course of the reform to be transparent and prompt in their communications. And it is gratifying to see that RAO "UES of Russia" and many of its energy companies rank high in various information transparency rankings and our pool of journalists point to us as a model for other media relations departments in other major corporations.

When I joined RAO "UES of Russia", I was involved in raising investments for capital construction. It sounded beautiful, but given the financial condition of energy companies in 2002–2003, even short-term loans taken to purchase fuel were a problem, leave alone longer-term loans. It was impossible to raise the necessary amount of funds until the reform got well underway and the financial community saw that the process was irreversible.

But I am proud that in those difficult years we launched new construction projects—the Kaliningradskaya CHPP-2, Unit 2 at the Severo-Zapadnaya CHPP, the Bureyskaya HPP, and GTU "Louch" in Belgorod. We produced and implemented the investment and construction standards. And now, when thanks to the reform the investment process is on the increase, they serve as a basis for investment projects at RAO UES subsidiaries. Besides, the current state of the energy industry makes it possible to implement projects based on the principles of long-term project finance. Dozens of such projects have been launched across the country. I see it as one of the key objectives of the reform and I am happy that it has been achieved.

I remember how sceptical were the journalists at the press-conference of Valentin Zavadnikov when he announced that the Company was about to start its reorganization. "What reform? You'd better settle the problem of non-payments.." I could not even imagine that it was the beginning of a new period in my life.

The Press Service of RAO "UES of Russia" has lived those years at an extremely fast pace. In order to ensure transparency we had to keep abreast of everything. But it was impossible to be merely an intermediary that receives information in the competent departments and provides it to journalists close to the text. We had to understand the heart of the matter, we remembered the most complex models of the restructuring by heart, we provided figures off-hand, and kept in mind the information to be presented weeks ahead. Sometimes we saw ourselves of the correspondent in a comic-strip who had to outstrip the winner in a running event and reach the finish first in order to take his photo.

Trying to keep up with our colleagues, reformers, we endeavoured to be the best in our field. By supporting them we were able to grow. Our Press Service is the best corporate press-service, our newspaper is the best corporate newspaper, and our website is the best website. And this Annual Report will also be named the best. It cannot otherwise with us.

For me, the years of work in RAO "UES of Russia" in the reform period were special. This work was always interesting. The changes were so rapid that sometimes it seemed that I was looking out of the window of a running car and figures standing still remained behind without even trying to catch up.

It was great that most people I worked with were ready to keep such a pace. The first discussion of an additional issue of WGC-5 shares with the company's management took place in early 2006, and by the end of 2007, we attracted private investors in eight generation companies. Many transactions were implemented within the time frames which seemed impossible to practically everybody till their completion. For instance, the sale of WGC-3 shares worth USD3.1 billion was completed within two and a half months, and the Mosenergo shares worth USD2.5 billion were sold within just one and a half months.

The changes that took place in the electricity industry in the recent years exceeded many, even the most optimistic, expectations. And I am glad that I was one of those who implemented these changes.

We all see that the reform has radically changed the technical policy in the electricity industry and made it possible to start re-equipment of the energy facilities. Simultaneously, a modern high-technology market of supplies for the electricity industry is being created.

Our goal was to organize the procurement process so that the RAO UES companies accepted the bids that were the best in terms of price and quality and the raised funds were spent reasonably and as efficiently as possible. The crated system of procurement organization in RAO "UES of Russia" is unique for the state companies and helped the energy companies save billions of roubles over the past few years. We also were the first to broadly introduce e-trade via Internet. Our e-trading platform www.B2B-energo.ru has already went beyond the scope of the energy industry and started to be used by foreign participants.

We have developed such a system of Procurement Standards which will be efficiently used by energy companies after RAO "UES of Russia" ceases to exist.

We, IT-specialists, had two goals — automation of the Head Office and introduction of the corporate standards of IT activities in the subsidiaries. The latter goal was the most difficult and interesting both in the industry reform process, and, personally, for me. I consider that the key result of my work in RAO "UES of Russia" was the following: our team managed to change the attitude to information technologies in the Company's subsidiaries.

Now, the majority of companies of the new sector structure believe that it is an effective instrument of business. In the new environment, information technologies are significant, transparent, clear, and useful for the companies' senior management.

Undoubtedly, there are objective reasons behind this turn: creation of the market and competitive environment creates a demand for automation of the companies' activities, production facilities are equipped with modern computer management systems, etc. But what we did in order to create in the energy companies IT strategies, IT policy, IT KPIs, regulations for operation, and many other things was a significant contribution to the process of computerization of the electricity industry.

Probably, the most difficult thing in the reform was to change the views of the energy industry workers, make them believe that a competitive market can be created here and that we have to start reorganization as soon as possible.

Launching the "5–15%" market first in the European part of Russia and then in Siberia, we felt that we are pioneers. People in the regions did not believe in it, they said it would not work, the time is wrong, the mentality is different. But the will of the management of RAO "UES of Russia" was strong: we had to do it. The Government supported the reform, and then one, two, three months passed and the market started to operate, and not only operate, but bring benefits which we had not expected. Teams of professional managers, capable of working in the new market environment, were formed in the companies.

And the launch of a new market model was already expected in 2006 by both market participants and infrastructure organizations. Everything was ready and the only needed thing was the resolution of the Government. And our hearts trembled again: what if they will not support it? By that time the market was developing by itself and it was impossible to stop its development.

I believe that the electricity industry reform was the only sector where a reform of such scale was implemented in such short period of time. The Russian energy sector has become an example demonstrating how the reform can and has to be implemented.

The chronicle of RAO UES Directors Board meetings is a history of the reform in the Russian electricity industry. The reform was de facto launched at the Board meeting in Kremlin in 2000 which is now viewed as historic. It immediately demonstrated the status of the planned reorganization.

The reform years were the years of discussions, sometimes even battles at the meetings of the Board of Directors. All the key resolutions relating to the reform, including the declaration of common principles to the approval of certain projects to reform regional energos, and issues of additional shares of WGCs and TGCs, were the results of the work of the Board of Directors. Colossal responsibility of the Board members lies behind each signed protocol. Despite the fact that they represented interests of various groups of the Company's shareholders, the goal was the common — to find the best and most efficient decision which would enable RAO "UES of Russia" and its subsidiaries to move forward, increase capitalization and production capacity. But it takes time to implement a reform. Its main results will be seen not at once, but in years. I want to live that long and view my participation in such a large-scale and significant for the whole country project as a great fortune.

The theme of my degree work at the Moscow Engineering and Economic Institute was "Creation of the Unified Energy System in the European Part of the USSR". Russia's Unified Energy System was just being created at that time.

Who could imagine that during such a short, in terms of history, period the energy industry would change so dramatically? Today, we are in details discussing the electricity market, which is being launched in Russia.

Many things changed during the period of my work in the sector, we stopped using regulatory management methods to economically justified approaches which very seriously changed the country's economic environment.

The electricity industry reform which is being completed now is a great victory, and I view it as equal to man's entry into space. It will ensure growth of the entire national economy and its strengthening. The reform will help our industry modernize the existing energy equipment and launch new capacities, create a new management system with the responsibility passed to the energy companies. As for me, I am looking forward to working in the reformed industry.

The reform in the sector helped us change the whole concept of work with other countries and brought new dynamics in the Company's export activities. We have found ways to restore powerful cross-border transmission lines, strengthened links in the area of electricity business, and launched the projects which could not have been implemented in the old sector system. For instance, the project to develop large-scale electricity exports from Russia to China which can reach 60 billion kWh annually. The Sangtuda HPP in Tajikistan, our largest project in the CIS countries, is already generating electricity to the energy system of Central Asia.

This project involved selfless work of our specialists to reach an agreement about contracts which sometimes was very difficult and took months, long and painstaking search of compromise wordings at negotiations with energy systems' senior officers, and often with Heads of State and political executives and numerous business trips.

Further liberalization of Russia's electricity industry will strengthen the positions of our energy companies at the international energy markets, help us not only adopt the advanced experience, but also add new experience to the development of the world energy sector.

The reform means so much for me and our "market" team. It means a lot of emotions, both joyous and not, great amount of knowledge about the electricity industry, markets, human relations, and a person's role in history.

The key event was the creation of our "beloved" wholesale and retail markets which are now liberalized. I can sincerely say that their development and technological implementation is unparalleled in the world. It included creation of a model of real-time competitive hourly node pricing, dispatching based on suppliers' real-time price bids, the system of self-regulation of the wholesale market, the institute of Guarantee Suppliers, and many other things.

Three or four years ago, it seemed impossible. I remember that one of the conservatives compared transition to the model of the "5–15%" market with a jump into a swimming pool filled with only 5 percent of water. And now we with confidence speak about 100% liberalization of both wholesale and retail markets by 2011.

Probably, the most important and key goal to be implemented is creation of a competitive power capacity market. No doubt that it will be created and it will be able to attract enough investments to finance long-term stable operation of the electricity industry and to meet the growing demand from our economy.