Federal Grid Company Issues New Shares

Federal Grid Company Issues New Shares

Moscow, 1 August 2011 - JSC "Federal Grid Company of Unified Energy System" ("Federal Grid Company" or the "Company", ticker symbol: MICEX, RTS, LSE: FEES), today announces the issue of additional shares with the total nominal value of RUR 5.2 bln.

On 29 July 2011, the Board of Directors of Federal Grid Company approved the increase of the Company's authorised share capital by issuing additional ordinary shares and signed off the Prospectus for the issue. The Company will issue a total of 10,321,601,853 ordinary shares with the nominal value of RUR 0.5 per share.

The Government of Russia will acquire RUR 4.1 bln worth of the newly issued shares. The rest of the issue will be offered publicly on the market. Existing shareholders will have a pre-emptive right to acquire the newly issued stock proportional to their existing holdings in the Company.

The proceeds from the placement will be used for financing the Company's existing investment programme.

The placement of the newly issued shares is planned to take place in September 2011.

About Federal Grid Company

JSC "FGC UES" ("Federal Grid" or the "Company") is the operator and manager of Russia's unified electricity transmission grid system. With over 121,000 km of transmission lines and over 305 GVA of installed transformer capacity, it is the largest publicly traded electricity transmission company in the world.

Federal Grid's business is to provide transmission and connection services to the Russian wholesale electricity market. It maintains and develops the grid system and supervises grid facilities and infrastructure in 73 regions of Russia, in which it operates. Its customers are regional distribution companies, retail electricity supply and large industrial enterprises The Company operates in an exclusive, competition free environment, and is regulated by the Government of the Russian Federation.

The Company's revenue is mainly driven by the transmission tariff set by the Regulator, the FST. From 1 January 2010 a new RAB (Regulatory Asset Base) tariff framework, designed to stimulate investment and operating efficiency, was introduced. The RAB tariff will be reviewed every five years, with the initial five year period to expire at the end of 2014.

The Company was incorporated in June 2002 as part of reorganization of Russia's electrical power industry. The Russian government is the largest shareholder with a 79.48% stake.

Federal Grid's common shares are included on the RTS and MICEX stock exchanges under the ticker FEES. The Company's GDRs are listed on the London Stock Exchange and traded under the symbol FEES.

Further information can be found at www.fsk-ees.ru/eng