1

RAO UES

Anatoly Chubais, CEO

UBS Annual ConferenceNovember 15, 2007

2008 Reform Completion:Unlocking shareholder value

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Disclaimer

This document is confidential and has been prepared by RAO UES (the “Company”) solely for use at the conference and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE

UNITED STATES OR TO A RESIDENT, NATIONAL OR CITITZEN OF THE UNITED STATES.This document does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any securities of the Company in any jurisdiction, nor shall it or any part of it nor the fact of its presentation, communication or distribution form the basis of, or be relied on

in connection with, any contract or investment decision.

These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities act of 1933, as amended. Any public offer or distribution of securities to be made in the United States will be made in accordance with a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as

financial statements. The Company has not registered and does not intend to register any portion of any offering in the United States or conduct a public offering of any securities in the United States.

This presentation is only addressed to and directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) ("Qualified Investors"). In addition, in the United Kingdom, this presentation is being distributed only to, and is directed only at, (i) Qualified Investors who have professional experience in matters relating to investments who fall within Article 19(5) of the Financial Services and Markets Act 2000

(Financial Promotion) Order 2005, as amended (the "Order") and Qualified Investors falling within Article 49(2)(a) to (d) of the Order, and (ii) Qualified Investors to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This presentation must not be acted on or relied on (i) in the United

Kingdom, by persons who are not relevant persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this presentation relates is available only to (i) in the United Kingdom, relevant persons, and (ii) in any

member state of the European Economic Area other than the United Kingdom, Qualified Investors, and will be engaged in only with such persons.The distribution of this presentation in other jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about,

and observe, any such restrictions. No reliance may be placed for any purpose whatsoever on the information contained in this document or on assumptions made as to its completeness. No representation or warranty, express or implied, is given by the Company, its subsidiaries or any of their respective advisers, officers, employees or agents, as to the accuracy of the information

or opinions or for any loss howsoever arising, directly or indirectly, from any use of this presentation or its contents.This document may include forward-looking statements. These forward-looking statements include matters that are not historical facts or statements and reflect the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, performance, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forwarding-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that the actual results of operations, financial condition and liquidity of the Company and the development of the industry in which the Company operates may differ materially

from those made in or suggested by the forward-looking statements contained in this document.  In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this document, those results or

developments may not be indicative of results or developments in future periods. The Company does not undertake any obligation to review or confirm expectations or estimates or to update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation.

By attending this presentation, you agree to be bound by the foregoing limitations.

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Two final chords of the reform

Corporate and legal actions taken according to the plan

UES Extraordinary General Meeting (October 26, 2007)

RAO UES EGM approved the final reorganization

(more than 95.43% of the attending shareholders voted for).

Deadline for reorganization: UES ownership unbundling by July 1, 2008.

UES shareholders will receive shares in all target companies

on a pro rata basis

Federal Law No. 250 to adjust power sector laws

in connection with RAO UES reorganization.

Transitional period of the power sector reform

will end by July 1, 2008 (date of completion of the RAO UES

reorganization).

Federal Law No. 250(November 4, 2007)

CoordinatedAgreed

Synchronized

Reform

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Competitive and Monopolistic Sectors: Target Structure Companies

Reform

Mo

no

po

list

ic

sect

ors

Co

mp

etit

ive

sect

ors

• Thermal Wholesale GenCos (OGKs)

• HydroOGK

• Territorial GenCos (TGKs)

• INTER RAO

• Federal Grid Company (FGC)

• System Operator

• Interregional Distribution Companies (IDC Holding)

• Energy Systems of the Far East

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Functional unbundling Legal unbundling Ownership unbundling

The issue is not settled yet for the majority of EU countries: Ownership unbundling of VICs and spin-off of distribution grids

EU countries

Deadline for ownership unbundling of RAO UES (Federal Law No. 250, November 4, 2007)

Russia July 1, 2008

??

Power Sector:Functional, Legal and Ownership Unbundling

Reform

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Total: > $20 bn (average price: ~$581 /kW)

+ Other OGKs/TGKs planned share placements and competitive sales:~ $20 billion by April 2008

Funds raised From share placements and competitive sales to strategic investors

0,459

3,087

0,451

2,345

1,52

0,946

5,848

2,867

0,996

1,647

0

1

2

3

4

5

6

7

Nov 06 Mar 06 May 07 May 07 Jun 07 Sep 07 Sep 07 Sep 07 Oct 07 Oct 07

USD in billions

OGK-5 OGK-3 TGK-5 TGK-3 OGK-5 OGK-4 TGK-1 OGK-2 TGK-8OGK-3

Reform

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Schedule: OGKs/TGKs Share Placements and Competitive Sales

Schedule for placing additional shares in OGK-6 to be specified

TGK-13

TGK-7

Apr 08Mar 08Feb 08Jan 08Dec 07Nov 07

34%TGK-14

25%TGK-3 (LSE)

76%TGK-10

53%TGK-11

32%

47%

52%TGK-6

50%TGK-2

68%OGK-1

56%TGK-4

34%TGK-12

55%

Stake offered, %

Apr 08Mar 08Feb 08Jan 08Dec 07Nov 07

20082007

TGK-9

Reform

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Government maintains control over transmission, hydro generation…

HydroOGK and FGC: Consolidation timeline

Starts tradingon a stockmarket

Transfer to a single share(merger of RTCs and spin-off)

HydroOGK

FGC

August 2007 January 2008 March 2008 July 2008

August 2007 July 2008 Aug2008

Transfer to a single share(swap of shares and merger)

Spin-off from UES Starts tradingon a stock

market

Conversion ratios approved (valuation of all hydro plants & HydroOGK

Conversion ratios approved(valuation of all RTC & FGC)

Minorities~ 22%

UES~ 78%

Minorities<49%

State>51%

State >76%

Minorities <24%

Reform

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…and distribution

• New configuration of IDCs: 11 companies + Far East Distrbution Co

Conversion ratios approved(valuation of RDCs)

Transfer to a single share:EGMs – merger of RDCs and IDCs, swap of shares

Consolidation is completed

IDCs start trading on a stock market

October 2007 February 2008 April 2008 June 2008

Reform

IDCs: Consolidation timeline

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Redemption Issues

Shareholders of UES who vote ‘against’ or do not vote on the reorganization can request UES to redeem shares1

Based on the independent valuation by Deloitte as of 1st of April 2007 following redemption prices have been approved by UES BoD: 32.15 RUB ($ 1.23) for one ordinary share 29.44 RUB ($ 1.13) for one preferred share

45 days 30 days

Redemption period Repayment period

EGM on reorganisation

(1)According to the Federal Law “About Joint Stock Companies” redemption amount is limited by 10% of UES NAV

26 Oct

End of redemption period

10 Dec

End of repayment period

10 JanOrdinary share redemption price

Preferred share redemption price

Ordinary share market price Preferred share market rpice

Pric

e,

$U

S

UES reorganization

Valuation Date

1 April 2007

0,3

0,4

0,5

0,6

0,7

0,80,9

1

1,1

1,2

1,3

1,4

1,5

1,6

09

.01

.07

06

.02

.07

06

.03

.07

03

.04

.07

01

.05

.07

29

.05

.07

26

.06

.07

24

.07

.07

21

.08

.07

18

.09

.07

16

.10

.07

13

.11

.07

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Unlocking the value through unbundling

Source: broker reports, Bloomberg. Market data as of November 8, 2007¹ As per RAO 2006 full year consolidated IFRS financials

($bn net to RAO UES)

OGK

TGK53

21

20

ThermalGenCos

13

Hydro GenCo

8

FederalGrid Co.

1

Inter RAO

12

Distr'n

1

SupplyMiscellaneousassets

3

79

RAO Sum

Of Parts

Currentmarket

cap.

UES reorganization

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UES reorganizationTarget Structure Companies: Liquidity guaranties

At the moment of distribution to UES shareholders all of the spinning off Target structure companies will be listed locally and will have GDRs

(exceptions: IDC Holding и Far East Energy Systems – as to be created just at the moment of spinning off from UES)

Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 July 08 Aug 08 Sept 08

Local listing

Issuing GDRs

TGK-11 HydroOGK FGC

Sochinskaya TES

(INTER RAO)

IDC Holding

Energy Systems

ot theFar East

All thermal OGKs/TGKs

HydroOGK FGCSochinskaya TES

(INTER RAO)

IDC Holding

Energy Systems

ot theFar East

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Competitive wholesale market:Supply/Demand Equation Prices

Source: Administrator of Trade System (ATS)

Average prices (Europe+Urals and Siberia), Rb/MWh

Day (Apr 07)

200

300

400

500

600

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24200

300

400

500

600

700

01.10.07 08.10.07 15.10.07 22.10.07 29.10.07

Week and month

Sept06 Oct06 Nov06 Dec06 Jan07 Feb07 Mar07 Apr07 May07 Jun07 Jul07 Aug07 Sept07 Oct07200

300

400

500

600

700

800

Year

Markets

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Power Market DevelopmentPace of liberalization: government’s plan and actual progress

All new capacity and consumption commissioned after 2007 go to the free market

0%5%

10%15%

25%30%

50%

60%

80% 100%

0%

20%

40%

60%

80%

100%

Jan 1, 2007 Jul 1, 2007 Jan 1, 2008 Jul 1, 2008 Jan 1, 2009 Jul 1, 2009 Jan 1, 2010 Jul 1, 2010 Jan 1, 2011Sept 1, 2006

~18% (Sept 06)

~19% (Sept 07)

Excluding electricity consumption by households

actual pace of liberalization (facts and estimates)

mandatory increase of the liberalized market share

~ 25%

~35%

~40%

~60%

~70%

~90%100%

Markets

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Power market model: Electricity, capacity and ancillary services markets

5-15 %per year

Regulated bilateral contracts

Day-ahead market

Free bilateral contracts

Day-ahead market (auction)

com

pe

titive

Ancillary services market

Transition market model Target model – competitive market

electricity electricity

com

pe

titive

Annual mandatory decrease of regulated contracts

and corresponding increase in trading by competitive prices

2011 – 100%

Regulated bilateral contracts Capacity payments

market

capacity capacity

Move to the capacitypayments market

reg

ula

ted

com

pe

titiv

ere

gu

late

d

Move to the ancillaryservices marketAncillary services tariff

ancillary services ancillary services

Markets

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Electricity demand growth outlook: Mid-term and long-term view

Source: Ministry of Industry and Energy (Minpromenergo); UES estimates

5%

5,6%

3,7%

5,3%

3,9%

5%

0

2

4

6

2006-2010 2010-2015 2015-2020

Basic scenario Optimistic scenario

Investments

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2006-2010 RAO UES Capacity Commissioning Program

MW 2006 2007 2008 2009 2010 2006-2010

Thermal generationOGKs, TGKs, RAO UES

1 186 1 545 2 050 5 788 14 364 24 934

Hydro OGK 67 690 420 1 224 1 612 4 013

Total commissioning 1 253 2 235 2 470 7 089 15 919 28 947

0

5,000

10,000

15,000

20,000

MW

2006 2007 2008 2009 2010

Investments

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2006-2010 Sources of financing

Private investments

State budget financing

Credits and loans

Companies’ funds

Other

$ bn

~41.8 (31%)

~22 (16%)

~7 (5%)

~33.4 (24%)

~33.6 (24%)

Investments

Total: $137.8 bn

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New Investors, New Generation

New Opportunities