OREANDA-NEWS. RAO "UES of Russia" and OAO "Urals Industrial - Urals Polar Corporation" have signed an agreement on cooperation in implementing investment programmes in the electricity sector in the Urals region.

The Urals Industrial - Urals Polar Project envisages the development of a new resource base for the industry in the Polar and Subpolar Urals parts of the Tyumen Region, Khanty-Mansi Autonomous Okrug and Yamalo-Nenets Autonomous Okrug.

The past few years have seen rapid development in these regions, which have exceeded the country's average growth rate. During the 2006/2007 autumn-winter period, the Tyumen Energy System exceeded last year's figures by 6.2%. The project implementation will be inevitably accompanied with a further increase in electricity demand in the areas covered the project.

The Cooperation Agreement is designed to ensure reliable electricity supply to customers, increase the network throughput capacity, create the conditions for new user connections to the power grids and increase the capacity available to the users already connected, and prevent power shortages in the regions taking part in the project.

For that purpose, it is planned to implement a Programme of construction and modernization of the generation and power grid facilities. The Urals Industrial – Urals Polar project will be implemented mostly in the Tyumen Region and Khanty-Mansi and Yamalo-Nenets Autonomous Okrugs, so the facilities listed in the Programme partly overlaps with the list of facilities provided by the agreements signed between RAO "UES of Russia" and the respective regional administrations on 31 July 2007.

Specifically, the Programme provides that over 1,300 MW of new generation capacity will be brought on line, including a combined-cycle power plant near the Tarko-Sale Substation. This project will be financed using the investment guarantee mechanism. The projects to build a combined-cycle power plant in Noyabrsk and a GTPP in Igrim will be financed by private investors.

In order to develop the power grid facilities, two transmission lines of 500 kV and 200 kV will be deployed to transmit power generated by this plant. Besides that, by 2010, the region will bring on line a 220 kV transformer substation with a 220 kV feeder, four 110 kV substations and three 110 kV transmission lines.

The projects to develop the power grid infrastructure will be implemented by subsidiaries of RAO "UES of Russia", OAO "UES FGC" and OAO "Urals and Volga IDC". The companies will finance the projects with their own funds and the proceeds from connection fees.

The Agreement provides that the list of the projects covered by the Programme may be extended by including a promising project to construct a mine-mouth power station burning the coals of the North Sosva basin in 2008-2015. By that time, Urals Industrial – Urals Polar Corp. commits itself to carry out supplementary exploration and start coal production in the basin in 2008-2015.

RAO "UES of Russia", as one of the parties to the Agreement, undertakes to prepare a schedule of design and construction works under the Programme, and to coordinate its subsidiaries' efforts to implement the Programme. RAO "UES of Russia" will also be responsible for monitoring, on an annual basis, the increase in electricity use and loads in the Tyumen Region, Khanty-Mansi and Yamalo-Nenets Autonomous Okrugs. Moreover, RAO UES Holding will further develop the measures which seek to advance the power grid facilities in the area where the Urals Industrial - Urals Polar project is being implemented.

In its turn, OAO "Urals Industrial - Urals Polar Project Corporation" will furnish RAO "UES of Russia" with the key data on the project implementation, and will produce and adjust, on an annual basis, a forecast of electricity consumption and loads for the period until 2020 for the areas where the project is to be implemented, taking into account the data on anticipated grid connections of power intensive consumers.