Vek to Be Ues’ Legal Successor Under China Sales Deals

MOSCOW. May 23 (Interfax) – The Eastern Energy Company (VEK), a 100% subsidiary of Russian national electricity company UES, is becoming legal successor to UES under contracts with China to export electricity to the Asian country, UES said, citing a decision on Friday by its board of directors.

One such deal is a set of agreements signed by UES and the State Grid Corporation of China (SGCC) late in 2006 and underlying a three- phase project valued at $18 billion that would ultimately result in 60 billion kilowatt-hours of electricity being exported to China yearly.

VEK is putting the project into practice.

Among other things, the project involves building new power plants, mainly coal-fueled, in the Russian Far East.

Under a decision by UES’ board in November 2007, VEK is negotiating terms for buying electricity from Russia’s Eastern Unified Energy System and for coal purchase agreements, and it is looking for ways to finance the construction of power plants.

There is a plan to sell shares in VEK, possibly to SGCC, coal producers, and financial organizations.

After the reorganization of UES, VEK is to become a subsidiary of Inter RAO UES, an electricity trading and holding company.

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