Updated August 28, 2008

   Rosatom's head Sergey Kiriyenko signed the order "On organization of works for construction of the Baltic Nuclear Power Plant" in the Kaliningrad region. 49% of the pl ant will be sold to a private investor. The Russian company is already holding talks with the western companies that are already operating at the

Russian energy market.

Rosatom offers only financial participation in the project, therefore the company guarantees the return of investments.

   On August, 27, Russia's state corporation Rosatom reported that on August, 13 the company's chief executive Sergey Kiriyenko signed the order "On organization of works for construction of the Baltic Nuclear Power Plant (NPP)" in the Kaliningrad region. In April, Rosatom signed the agreement with the authorities of the region about the NPP's construction with the power of 2,4 GW. Then the Russian state corporation estimated the project at €5 billion. The first unit of the future plant will be launched in 2015.

The special company that will fund the project will be established. Rosatom will control this company, where 49% will be sold to a private investor that Inter RAO UES is looking for.

   A large western company can become the private investor, as were saying in Rosatom in April. As per August, 27 the position didn't' change, as said in the Russian state corporation.

"We are consulting with the Russian and foreign investment organizations and we are interested in the project", as confirmed in Inter RAO UES, but refused to comment further.

According to the source in Rosatom, the talks are held with foremost the foreign companiesthat are already operating at the Russian energy market.

"Obviously, it goes about the German E.On, the Italian Enel and the Finnish Fortum", as supposes the head of

the Fund for Energy Development Sergey Pikin.

These companies turned into the controlling owners of the Russian energy companies after the reorganization of RAO UES of Russia was completed. In Mr. Pikin's opinion, Electricity de France can be among the applicants as well.

   However, the foreign companies don't confirm their intentions of participating in the project. "As it has been already reported, we are not going to make large purchases in Russia in the nearest 2 or 3 years", as declared in Fortum. In Enel refused to comment. Still, the source in the company says that "it examines the Russian sector of nuclear energy and takes to account all opportunities that can appear in the long-term prospect". In E.On will comment the issue later.

   According to the source in Rosatom, in the company don't even talk about the coupled management of the NPP with a private investor – the prospective partners are offered the financial participation only.

Nevertheless, Dmitry Skvortsov from the Bank of Moscow considers that the project can be of high interest because until recently the Russian nuclear energy was closed for the private investments.

At the same time, if the Russian government wants to arouse the interest of the private western investors, it has to guarantee the future sale and distribution of the net income of the Baltic NPP, as the analyst says.