Federal Grid has approved a bond issue

Federal Grid has approved a bond issue for up to RUB 125 billion

Moscow, 29 April 2011- Federal Grid Company of Unified Energy System ("Federal Grid" or the "Company", ticker: FEES on MICEX, RTS and LSE), the operator and manager of Russia's unified electricity transmission grid system, today announces its intention to undertake a bond issue for up to RUB 125 billion (The Issue). The prospectus (Prospectus) for the Issue has been approved by the Company's Board of Directors. 

The Company plans to issue various tranches of bonds in series 12 to 20 with each series being for a nominal value of 10-20 billion rubles each and with the maturity term of up to 12 years from issue. The placement price for each bond will be RUB 1,000.

Bond series 12 and 16 will mature on day 2548, series 13,14 and 17 will mature on day 3640 and series 15, 18, 19 and 20 will mature on day 4368 from issue. The Issue allows for a possible earlier redemption at the issuer' discretion or the request of the bond holders.

The money raised as a result of the Issue can be used by Federal Grid for the financing of its investment programme as well as refinancing its existing debt. Because the approved Prospectus is valid for a year from its registration date it can continue to cover bond issues in 2012 as well as 2011. The registration of the Prospectus does not legally commit the Company to the issue of any bonds.

Federal Grid will continue its broad approach to raising finance for its needs, including through loans, bonds, domestic and international fundraisings, with the view to securing sources of finance at the best possible terms depending on specific market conditions.

At present, Federal Grid's bond series 04, 06, 07, 08, 09, 10 and 11 with a total placement value of RUB 56 billion are in circulation. Federal Grid enjoys a long term credit rating of BBB by Standard & Poor's and Baa2/stable forecast by Moody's.

About Federal Grid Company

Federal Grid 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 regionsof 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 Federal Tariff Service. From 1 January 2010 a new RAB (Regulatory Asset Base) tariff framework, designed to stimulate investmentand operating efficiency, was introduced.

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

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

Neither the content of the issuer's website nor the content of any other website accessible from hyperlinkson the issuer's website is incorporated into, or forms part of, this announcement.