UES is expected to conduct additional share issues or initial public offerings for up to four generation companies next year and is expected to prepare details of the deals for the government’s approval by 1 April.

However, the final restructuring of UES is expected to be postponed until 2008 when six wholesale generating companies and 14 territorial generating companies will be established. These are all expected to be privatised by then with at least three proposing to issue new shares as early as April next. Additional share issues by five or six of the generating companies could raise up to $5 billion in 2006-2007, Russian Industry and Energy Minister Viktor Khristenko reportedly said.

The Russian parliament passed comprehensive reform legislation in 2003 that will break up the vertically integrated UES into generation, transmission, and distribution assets, while boosting energy competition and investment.