06.07.2010
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At Regular meeting of JSC RusHydro Board of Directors

On June 29, 2010, JSC RusHydro (ticker symbol: HYDR; MICEX, RTS and LSE) Board of Directors voted by proxy.

 

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RusHydro JSC Board of Directors took notice of the Report on execution of orders of the Company’s Board of Directors for the 2009-2010 corporate year.

 

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JSC RusHydro Board of Directors approved the revised version of JSC RusHydro Regulation on investment activity.

 

The changes were made to bring the Company’s Regulation on investment activity into line with the requirements of the Russian Government’s Regulation No.977 of 01.12.2009 «On Investment Programs of Power Industry Entities» and the Russian Ministry of Energy’s formats. In particular, the Russian Ministry of Energy’s Order No.114 of 24.03.2010 approved the investment program formats of the power industry entities, in the authorized capital of which the government has a stake and formats of reports on completion of the investment program of power industry entities, in the authorized capital of which the state has a stake.

 

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JSC RusHydro Board of Directors approved the participation of the Company in the Self-Regulating Organization Non-Profit Partnership «Construction Organization Association EnergoStroyAlliance — SPO NP EnergoStroyAlliance».

 

Due to enactment (in the 1st quarter of 2010) of Order of the RF Ministry of Regional Development No.480 of October 21, 2009, «On Alteration of Order of the RF Ministry of Regional Development No.274 of December 9, 2008, «On approval of the list of works of engineering surveys, design document preparation, construction, reconstruction and overhaul repair of capital construction objects that impact on capital construction objects safety», a need arose for JSC RusHydro to join the SRO to obtain requisite work permits, including those for building inspection by a legal entity or self-employed entrepreneur engaged under a contract by the developer or customer, as well as those related to arrangement of construction, reconstruction and overhaul repair by a legal entity or self-employed entrepreneur (general contractor) engaged under a contract by the developer or customer.

 

JSC RusHydro Board of Directors approved the change in the Company’s share of participation in JSC ESK RusHydro by ceding one share of ESK RusHydro OJSC in favor of Hydroinvest OJSC under a purchase and sale contract.

 

At present JSC ESK RusHydro is a 100% subsidiary of JSC RusHydro. To optimize corporate governance of the retail companies, whose 100% of shares are held by JSC ESK RusHydro Group, a decision was made to sell 1 share of JSC ESK RusHydro in favor of JSC Gidroinvest (JSC Gidroinvest is also a 100% subsidiary of JSC RusHydro ).

 

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JSC RusHydro Board of Directors assigned the Company’s representatives in JSC Gidroinvest Board of Directors responsible for issues of the Company’s participation (change in the share of participation) in other entities to vote for passing a resolution on approving the participation of JSC Gidroinvest in JSC ESK RusHydro.

 

JSC RusHydro Board of Directors assigned the Company’s representatives in JSC Gidroinvest Board of Directors responsible for issues of the Company’s participation (change in the share of participation) in other entities to vote for passing a resolution on approving the termination of participation of JSC Gidroinvest in Chuvash Power Supply Company OJSC.

 

JSC RusHydro Board of Directors assigned the Company’s representatives in JSC RusHydro Board of Directors responsible for issues of the Company’s participation (change in the share of participation) in other entities to vote for passing a resolution on approving the JSC ESK RusHydro participation in JSC Chuvash Retail Supply Company.

 

To optimize management of power supply companies as 100% subsidiaries, the second shareholder — JSC Gidroinvest (JSC RusHydro 100% subsidiary) — joined JSC ESK RusHydro by acquiring one share of JSC ESK RusHydro.

 

Earlier, in pursuance of applicable laws, one share of JSC Chuvash Retail Supply Company was carved out for the benefit of JSC Gidroinvest. This lifted the restriction for JSC ESK RusHydro to hold 100% of shares of JSC Chuvash Power Supply Company. To optimize corporate governance of JSC Chuvash Power Supply Company as 100% subsidiary, one share of the Company was returned to JSC ESK RusHydro.

 

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JSC RusHydro Board of Directors approved the basic terms and conditions of the contract between JSC RusHydro and JSC Power Machines for manufacturing and delivery of equipment for hydroelectric units and performance of work for Zhigulevskaya HPP, a subsidiary of JSC RusHydro

 

The 2011-2015 medium-term technical rehabilitation and modernisation program for Zhigulevskaya HPP, JSC RusHydro branch, provides for increased HPP renovation rates. This contract contemplates replacement of hydraulic turbines by new, higher capacity turbines. The contract provides for JSC Power Machines to render turnkey service, therefore the equipment manufacturer will furnish RusHydro OJSC with a ready-for-service hydroelectric unit, which has passed all requisite tests and is covered by guarantee liabilities.

 

JSC RusHydro Board of Directors approved the framework terms of long-term cooperation between JSC RusHydro and JSC Power Machines (including future contracts) in replacement of hydroelectric units of Zhigulevskaya HPP, JSC RusHydro branch.

 

In particular, JSC Power Machines will, under contracts signed with JSC RusHydro, carry out turnkey replacement of hydroelectric units of Zhigulevskaya HPP, JSC RusHydro, i.e. will deliver equipment and perform work in the scope necessary to put the hydroelectric units into service. Cooperation involves service maintenance of the hydroelectric units during the service life specified.

 

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JSC RusHydro Board of Directors authorized the Company’s Management Board to provide additional funding until approval of the updated Investment Program for a number of projects, including: Ust-Srednekanskaya, Gotsatlinskaya, Kashkhatau (Nizhne-Cherekskaya HPP chain), Cheboksarskaya HPP, Egorlykskaya HPP-2 and Zelenchukskaya HPP-PSPP.

 

Funding for the above projects before approval of the updated 2010 Investment Program of JSC RusHydro needs to be provided for the following reasons:

∙ in order to launch Egorlykskaya and Kashkhatau HPP in line with the plans in 2010;

∙ as far as Ust-Srednekanskaya and Gotsatlinskaya PHH concerned, no funds required for project construction were allocated from the federal budget in 2010;

∙ as to Zelenchukskaya HPP-PSPP, construction and installation work need to be performed in derivation tunnel No.2;

∙ as regards Cheboksarskaya HPP, the scope of work is determined by the Russian Government’s order to set a normal headwater level of 68 m and update the project.

 

The project for updating JSC RusHydro 2010 Investment Program was approved by JSC RusHydro Management Board (minutes No.472pr/2 of 27.04.2010) and also was approved by the JSC Investment Committee at RusHydro Board of Directors (minutes No.13 of 06.05.2010. It is now being approved by authorities.

 

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