LENENERGOLENENERGO

20042004

2

GENERAL OUTLOOK

Transmission lines by voltage

less than 220 kV 97%

330 kV 1%

220 kV 2%

The largest power company in the North-West Russia

Installed capacity – 3244.5 MW, of which Hydro – 649 MW

Franchise to 6.4 mln. people in St.Petersburg and Leningrad region covering 85.9 thousand sq.km

We distribute 99% of electricity and 55% of heat consumed in the region

Export access to Finland and Estonia

Length of transmission lines

Overhead transmission lines – 38.9 thousand km Cable lines – 15.2 thousand km

3

LENENERGO GENERATING CAPACITIES IN ST. PETERSBURG

TPP-14

TPP-15

TPP-7 Central TPP

TPP-5

TPP-22

TPP-21

TPP-17

4

SHAREHOLDER STRUCTURE

Foreing financial investors 18%

Individual investors7%

RAO UES49%

Russian financial investors 5%

Fortum21%

5

PRODUCTION 2003

Installed capacity 3 245 MW Working capacity 1 785 MW

Electricity generated 12 421 mln. kW·hElectricity purchased 17 753 mln. kW·hElectricity sold 24 730 mln. kW·h

ELECTRICITY

6

ELECTRICITY SUPPLY

Electricity deliveries Generation Purchased electricity

bil

lion

kW

h

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 F

21.8

16.1

10.7

22.8

16.2

12.0

23.5

16.7

12.4

24.7

12.4

17.8

24.9

13.3

16.1

4.6% 3.1% 5.1% 0.8% ANNUAL

GROWTH RATE, %

7

PRODUCTION 1H 2004

(in mln. kW·h) 1H 2003 1H 2004

Electricity generated 6 543 7 332

Electricity purchased 8 986 8 358

Electricity sold 12 754 12 533

ELECTRICITY

8

CONSUMPTION

24.1

25.3

27.6

28.9

26.8

23.0

24.0

25.0

26.0

27.0

28.0

29.0

30.0

31.0

32.0

33.0

34.0

35.0

36.0

37.0

38.0

1999 2000 2001 2002 2003 2004 F 2005 F 2006 F

THE MOST LIKELY SCENARIO

WE ARE NOTICING A STEADY CONSUMPTION INCREASE SINCE 1999:

From 24.1 billion kwh in 1999to 28.9 billion kwh in 2003

bil

lion

kW

h

9

mln

. G

Ca

l

20

21

22

23

24

25

2000 2001 2002 2003 2004 F

HEAT SUPPLY

DUE TO EXPIRY OF KIRISHY LEASE

22.06

22.98

24.86

22.50

22.10

10

PRODUCTION 1H 2003

(thousand GCal) 1H 2003 1H 2004

Heat generated 13 758 12 694

Heat sold 13 428 12 378

HEAT

11

II

0

150

300

450

600

750

900

1050

2000 2001 2002 2003 2004 F-15

0

15

30

45

60

75

90

FINANCIAL POSITION

Revenue/net profit (mln. USD) Growth rate (2000-2003)

250 %

Revenue Net profit

THE HIGHEST RESULT AMONGST OTHER

REGIONAL AO-ENERGO

363

718

580

868

1010

7.1

40.834.5

-10.7

20.0

12

REVENUE SPLIT FOR ELECTRICITY

Housing20%

Industry48%

Wholesalescompanies

9%

Other consumers3%

Commercial sector20%

Transport7%

13

REVENUE SPLIT FOR HEAT

Otherconsumers

26%

Industry6%

Social sector 68%

14

DEBTORS AND CREDITORS

Debtors/Creditors

0

1000

2000

3000

4000

5000

6000

7000

800001

.01.

2003

01.0

4.20

03

01.0

7.20

03

01.1

0.20

03

01.0

1.20

04

01.0

4.20

04

01.0

7.20

04

RU

R m

ln.

Creditors

Debtors

15

EFFECTIVE TARIFF SETTING SCHEMES

Electricity 89.81 kop/kWh Electricity 90.02 kop/kWh Heat 329.9 RUR/GCal Heat 325.4 RUR/GCal

Average current tariffs:

St.Petersburg Leningrad Region

5

25

45

65

85

Ele

ctr

icit

y,

ko

p./

kW

h

Electricity, kop/kWh Heat, RUR/GCal

31.0

1.00

30.0

4.00

31.0

7.00

31.1

0.00

31.0

1.01

30.0

4.01

31.0

7.01

31.1

0.01

31.1

0.02

30.0

4.02

31.0

7.02

01.0

2.03

0

250

450

650

850

Hea

t, R

UR

/GC

al

5

25

45

65

85

Ele

ctr

icit

y,

ko

p./

kW

h

31.0

5.00

31.0

8.00

30.1

1.00

28.0

2.01

31.0

5.01

31.0

8.01

30.1

1.01

28.0

2.02

31.0

5.02

31.0

8.02

01.0

2.03

Hea

t, R

UR

/GC

al

0

100

200

300

400

DUE TO EXPIRY OF KIRISHY LEASE

01.0

1.04

01.0

1.04

16

GENERATION DEVELOPMENT IN 2004

TOTAL GENERATION INVESTMENTS IN 2004 — 1 940 mln. RUR,

of which:

own funds — 540 mln. RUR

long-term credit financing (EBRD) — 1 400 mln. RUR

Power unit #1 of TPP-5 with installed capacity of 180 МW и 260 Gcal/h –– 1 400 mln. RUR

Boiler installation on TPP-7 –– 200 mln. RUR

Turbine with installed capacity of 30 MW and 75 Gcal/h on TPP-15 –– 58 mln. RUR

17

GENERATION DEVELOPMENT

NEW CONSTRUCTION

Соnstruction of power unit #2 of TPP-5 (Steam Power Facility 300 MW and 200 Gcal/h) to supply heat to densely populated areas of Nevskij and Krasnogvardeiskij districts

Соnstruction of power unit # 4 of TPP “South”(SPF 300 МW и 200 Gcal/h) to supply heat to Frunzenskij and Nevskij districts

Соnstruction of circuit water supply system of TPP-14

18

PRESENT STRUCTURE

MANAGEMENT

Heat network CPRР

TPP-22

TPP-5

Central TPP

TPP-7

TPP-14

TPP-15

TPP-17

TPP-21

TPP-8

HEPP-6

Cascade-1

Cascade-2

HEPP-13

Luzhskie

Cable

High-voltage

Suburban

Vyborgskie

Gatchinskie

Kingiseppskie

Lodeinopolskie

Novoladozhskie

Tihvinskie

Energosbit

CIT

IAC

ASP

ATP

Generation Heat networks MaintenanceSales ServicesElectric networks

Assets share as of 01.01.04

Generation

Electric networks

Heat networks

Sales

Maintenance & Services

RESTRUCTURING

19

TARGET STRUCTURE

MSK

High-voltage

MMSK C-З

or

Regional Network Company Regional Generating Company Energy Sales Company

TPP-22

TPP-5

Central TPP

TPP-7

TPP-14

TPP-15

TPP-17

TPP-21

HEPP-8

Luzhskie

Cable

Suburban

Vyborgskie

Gatchinksie

Kingiseppskie

Lodeinopolskie

Novoladozhskie

Tihvinskie

EnergosbytOther non-core assets and

services

100% OAO CPRP-Energoservice

13,8% ZAO North-Western TPP

3,46% OAO Power Machines

HEPP-6

Cascade-1

Cascade-2

HEPP-13

Heat Networks

Managing Company

21,6% OAO Petroenergobank

50% ZAO LEIVO

75% ZAO Petroelectrosbyt

Management assets

EIO

20

LENENERGO IS AN EXPENSIVE COMPANY

COMPARISON OF INSTALLED CAPACITY COST

12 882

5 075

3 495

14 900

8 263

4 750

2 625

1 884

3 25310 146

13 000

4 547

5 555

47 000

42 000

27 000

13 000

34 000

631

273

193

1 908

180

273

125

136

5501 617

4 982

1 472

1 545

10 831

12 133

9 980

5 454

32 998

Irkutsk

Bashkir

Samara

Mos

Sverdlov

Kuzbass

Novosibirsk

Chelyab

RUSSIAN AVERAGELENENERGOCEZ (Czech)

Huaneng Power (China)

Copel (Brasil)

Cemig (Brasil)

Korea Electric Power (Korea)

Developing Markets Average

Endesa (Spain)

Entergy (USA)

Cinergy (USA)

E-ON (Германия)

Developed Markets Average

48.9

53.8

55.2

128.1

21.8

57.5

47.6

72.2

60.6169.0159.4

383.2

323.7

278.1

230.4

275.0288.9

369.6

419.5

970.5

512.1

AO-energo Installed Capacity(MW)

Market Capitalization(mln US$),

as of 02.02.04

Cost of InstalledCapacity (US$ / kW)

OUR AIMS FOR OUR AIMS FOR

20102010

22

ELECTRICITY DEMAND FORECAST

According to forecasts electricity consumption in Russia will grow annually by 1,5-2,5%

By the year 2010 electricity consumption in the North-West region of Russia could grow by 20%

It is necessary to reconstruct the existing and build new electricity transmission lines and energy supply sources to satisfy the growing demand for electricity

The estimated need for investments in reconstruction and technical renovation of transmission lines, which supply our existing customers, amounts to more than 620 mln. USD. Thorough technical audit is needed to estimate real condition of the gridlines

Approximately 240 mln. USD of investments are needed for reconstruction and building new gridlines to satisfy growing demand

23

TARGETS - 2010

Growth of Net margin up to 20% (based on IAS)

Electricity generation efficiency ratio growth up to 45%

Strengthening our positions on the international capital markets

REVENUE TARGETS

PRODUCTION TARGETS

Electricity Sales, TWh Heat Sales, mln.GCal

25.1626.17 27.21 28.29 29.42 30.60 31.82

22.14 22.02 21.89 21.77

23.52 24.00

21.65 21.5322.3924.86 22.27

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2002 2003 2004 2005 2006 2007 2008 2009 2010

921,19 1028,56

1149,001285,07

1439,57 1488,13 1537,83

827718

0

250

500

750

1000

1250

1500

1750

1 2 3 4 5 6 7 8 9