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RusHydro and China Three Gorges Corporation consider cooperation in construction of the flood control hydropower facilities in the Russian Far East

JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that it may consider potential cooperation with the China Three Gorges Corporation (CTG) on construction of the storage-based hydroelectric facilities on the feeder rivers of the Amur to contain future floodings in the region.

Evgeny Dod, Chairman of the Management Board of RusHydro, and Cao Guangjing, Chairman of the Board of CTG, agreed to sign a cooperation agreement during their meeting in Beijing.

The massive floods in the Far East of Russia and North-Eastern region of China in 2013 caused by ample rainfalls revealed the necessity to work out the measures to mitigate the risks of floods in the future. During the negotiations management of RusHydro maintained that it considered the construction of the reservoir-based hydropower plants to be the most efficient.

Both RusHydro and CTG expressed their interest in the joint development of such facilities on the feeders of the Amur River.

The parties agreed to discuss the organizational form of cooperation and its financing principles, as well as to develop the proposals on electricity sales for the new generating capacities.

RusHydro and CTG will present their joint proposals for consideration of the governments of Russia and China.

The flood of 2013 in the Amur River basin was the strongest in the entire history of hydrological observations. It had unique scope having covered all rivers of the basin, including those, located in the Chinese part of the basin. The flood was caused by powerful cyclones that had led to prolonged heavy rainfalls. Situation in Khabarovsk region was complicated by high volume flows of Ussuri and Sungari rivers, most of this flow originating in Chinese territory. Currently, these rivers are responsible for more than 35% of the Amur River flow.

The flood impact have been substantially mitigated by RusHydro’s Zeyskaya and Bureyskaya hydropower plants: approximately two thirds of the flood flow volume had been accumulated in their reservoirs. This prevented the levels of Amur River in Blagoveschensk from reaching its historic peak levels, that could have disastrous consequences. Due to significant reserve volume of the Zeyskaya reservoir, the flood peak was reduced by more than three times: from 11,700 m³/s in the headrace to 3,500 m³/s in the tailrace.

Significant part of the Amur River still remains unregulated by reservoirs, leaving it open to periodic catastrophic floods. In order to mitigate the floods and to prevent possible damage, construction of new hydropower dams with large reservoirs is essential, as well as construction of counter-regulator dams in tailrace of the existing large hydropower plants.

Currently, construction of the RusHydro’s Nizhne-Bureyskaya hydropower plant, counter-regulator for the Bureyskaya plant, is in progress. Project documentation for the Nizhne-Zeyskaya HPP, counter-regulator for the Zeyskaya HPP, has been developed. Other hydropower projects with regulating reservoirs on tributaries of the rivers Zeya and Bureya may include the Selimdzhinskaya, Giluyskaya and Nizhne-Nimanskaya dams.

On September 21, 2013, President Vladimir Putin commissioned the Government of the Russian Federation to develop the program for construction of new hydropower facilities in the Far East of Russiaby the end of the year. The new power plants could provide protection from floods, improve reliability of electricity supply, and create new job opportunities. This will have positive multiplication effect on the economic development of the region and quality of life of local communities.

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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