SEVAN-HRAZDAN HPP CASCADE IN ARMENIA MAY RECEIVE CREDIT IN 2007 FROM GERMAN KFW TO SUM OF 23,5 MLN EURO

ARMINFO News Agency
February 14, 2007 Wednesday

Sevan-Hrazdan HPP Cascade in Armenia may receive a credit of 23,5 mln
Euro from KfW German Bank in 2007 for modernization, Director General
of the "International Energy Corporation" CJSC (IEC), Mels Hakopyan,
told ArmInfo today. To remind, the IEC, being in structure of RAO
"UES of Russia", operates the Sevan-Hrazdan HPP Cascade.

According to Hakopyan, the first stage of coordination of key issues
has already been passed. Presently, the specialists are working over
the draft agreement text. "There are provisions in the agreement which
are unacceptable for us", the Director General said, having refused
to go into details of the negotiation process. He added the Company
had initially asked for a credit of 18 mln Euro from KfW, however,
the cost of the credit has further grown. M. Hakopyan expressed hope
that the sides will be able to agree in 2007 and the credit will
received. The German Bank is ready to give a credit under guarantees
of RAO "UES of Russia".

Earlier, the Company had informed that about 1,5 bln drams ($4,1
mln) were invested in Sevan-Hrazdan HPP Cascade in 2006. The cost
of IEC’s investment program for 2006-2009 makes up 9,950 bln drams
(about $27,2 mln) and it is scheduled to attract the most part of
means for its implementation at the expense of KfW German Bank’s
credit for reconstruction of the Yerevan Hydropower plant.

To note, the "International Energy Corporation" CJSC was created by RAO
"UES of Russia" in May, 2004 for operation of the Cascade. The Company
has licenses of the Commission for regulation of the sphere of public
services of Armenia for the production and export of electric energy
for 15 years. The property complex of IEC includes seven hydropower
plants, located on Hrazdan river. The Cascade’s installed capacity
is 556 MW or about 18% of the total capacity of Armenia’s power system.