OREANDA-NEWS. May 12, 2012. The Government of the Russian Federation, the majority shareholder of the MRSK Holding (LSE trading symbol: MRSK) (“the Company”), the largest electricity distribution company in Russia, has just informed us about its decision to transfer the functions of the sole executive body of MRSK Holding to Federal Grid Company of Unified Energy System (“JSC FGC UES”), the Russian electricity transmission company.

We believe the Russian Government's decision is in line with its plan to optimise the Russian electricity grid infrastructure, including through restructuring the transmission and distribution electricity grid sector. The Government expects that consolidating the management of the transmission and distribution electricity grids should help raise the overall efficiency of the electricity distribution sector in Russia, synchronize investment programmes and ensure a more efficient regulation of tariff revenue. It is also expected to solve the ‘last mile’ issue, which is related to cross-subsidisation between the transmission and distribution grids.

Furthermore, the Government is in the planning stages of implementing a unified technological policy for the electricity grid sector to enhance reliability of electricity distribution and raise the quality of electricity supply.
We will keep the market informed of any further developments.