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RusHydro will finish the construction of the first 420 MW of Zagorskaya pumped storage by year-end

JSC RusHydro (ticker symbol: RTS, MICEX, LSE: HYDR; OTCQX: RSHYY) will finish the construction of the first stage of Zagorskaya pumped storage plant (420 MW) by the end of 2012.

The construction progresses in accordance with the approved schedule. The construction of two penstock tunnels has been completed; the third is currently under construction. 3000 people and 500 units of machinery are employed for the construction of the second stage. The works are carried out 24/7 in 3 shifts.

The Zagorskaya pumped storage project No. 2 with total capacity of 840 MW (in generation mode) is implemented under the capacity delivery mechanism (DPM), which provides for a grace period of up to 12 months (i.e. no fines incurred) in case of a delay in commissioning schedule. The launch of the plant in commercial operation will follow the commissioning of a double-circuit high-voltage line by Federal Grid Company (FGC).

RusHydro has already notified the System Operator and the Market Council that it may change the date of launch of the first two hydro-units of Zagorskaya pumped storage No. 2 (420 MW) from January 1, 2013, to January 1, 2014.

RusHydro is now examining the ways to compensate the losses incurred by non-availability of transmission capacity of FGC and will undertake all the necessary measures mitigate the financial fallout.

Currently, the company is developing a new commissioning schedule to accommodate the need for comprehensive pre-launch tests and System Operator’s attestation of reliable operation of the power plant.

The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.
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