Open JSC "Territorial Generating Company #2" (TGC-2) plans to increase its capitalization from RUB32 billion to RUB76 billion till 2011. This goal was announced by TGC-2 Deputy Director General for Development and Corporate Governance Valery Ermakov at the TGC-2 management team meeting with analysts from top Russian investment companies. The implementation of the plan will be assisted by a large-scale Investment Program. The amount of the Program funds till 2011, taking into consideration the latest updates, will constitute RUB38,5 billion. The most substantial part of this amount will be allocated to replacement and modernization of obsolete and ineffective plants as well as to putting on line new generating capacity.

JSC "TGC-2" First Deputy Director General for Production and Investment Vasiliy Beliy defined three main directions for the Investment Program implementation. First of all it is effective operation of current equipment in terms of production effectiveness and ensuring market competitiveness for plants, second is the introduction of advanced steam-gas generating sets, as well as significant alterations in fuel balance and placing of main emphasis on coal.

In May of this year TGC-2 Board of Directors approved the Development Strategy and the Investment Program for a mid-term perspective. By 2011 TGC-2 intends to increase its installed electric capacity to 3262,5 MW, and by 2015 - to 6177, 5 MW, introducing in each of these periods 1145 MW and 4060 MW of new capacity accordingly. Parameters of the second stage in the Investment Program till 2015 will be approved by the Company Board later on. However, preliminary calculations show that the amount of Program funds will exceed RUB110 billion.

TGC-2 First Deputy Director General for Economy and Finance Marina Kopyova named main financial sources for Investment Projects within the framework of the Company financial model: attracted funds (20%), own funds (21%), project financing (36%) and additional share issue (23%).

At the meeting with analysts Company Management Board have also voiced its plans to enter new heat markets, including 21 localities in the regions of the Company presence, as well as the neighboring ones, in particular, Pskov region and Nenetsky autonomous okrug.

Senior analyst of "KIT Finance" bank Dmitry Tsaregorodtsev pointed out that TGC-2 originally not included in the list of companies to conduct additional share issue is rapidly transforming into one of the leaders. He considers the under way implementation of the Investment Program, which is thought through, well structured and specific, to be the main reason for such a change. Dmitry also pointed to a TGC-2 aggressive policy in increasing its heat market share.

Hence, TGC-2 team considers that the Program implementation will allow the Company to compete successfully on heat and electricity markets, increase its profitability and as a result to create a dynamic trend for its development and capitalization growth.

Company Profile
JSC "Territorial Generating Company # 2" (JSC "TGC-2") was established in February 2005. The Company"s Director General is Andrey Vagner. TGC-2 comprises generating capacityof 6 regions - Arkhangelsk, Vologda, Kostroma, Novgorod, Tver and Yaroslavl.

Since July 1, 2006 TGC-2 functions as a unified Company. TGC-2 operates 16 heat power stations, 8 boiler-houses, 4 enterprises of thermal networks. The aggregate electric capacity of TGC-2 enterprises is 2 582,5 MW, the installed thermal capacity constitutes 12 471 Gcal/h.

The Authorized Capital of JSC "TGC-2" amounts to RUB7 117 127 045 and is spread over 700 328 533 458 ordinary shares and 11 384 171 043 preferred shares with the face value of 1 kopec. The main shareholder of the Company is RAO "UES of Russia" which owns 49,18% of shares.