The Investment Program of JSC IDGC of the North-West for 2012 was prepared with regard to goals and tasks of the Unified Policy in the Distribution Electric Grid Complex.

Investment activities are a critical part of successful operation of the Company. Modern and sufficient investments allow ensuring reliability of the electric grid complex. Implementation of the investment program of JSC IDGC of the North-West in 2012 contributed to the increase of reliability of energy supply to consumers, reduced electric energy loss, decreased operating expenses and ensured commissioning of additional capacities for connection of new consumers and elimination of energy deficit.

JSC IDGC of the North-West has 7 branches which carry out their activities in the territory of 7 constituent entities of the Russian Federation: Arkhangelsk, Vologda, Murmansk, Novgorod and Pskov Regions and the Republics of Karelia and Komi.

In accordance with the criteria approved by Decree No. 977 of the Government of the RF of December 1, 2009, branches of JSC IDGC of the North-West are referred to the category of entities of the electric energy sector, investment programs of which must be approved by executive authorities of the relevant constituent entity of the Russian Federation.

The investment programs of the Company's branches are approved by executive authorities of the constituent entities of the Russian Federation within the framework of long-term investment programs:

The consolidated investment program of JSC IDGC of the North-West was approved by the Board of Directors of the Company within the framework of the business plan.

The capital investment volume in 2012 amounted to RUB 6,791.8 million, exclusive of VAT.

In 2012 new fixed assets were commissioned for the total amount of RUB 6,276.0 million. In physical terms 469.2 MVA of transformer capacity and 1,836.16 km of power transmission lines with voltage of 0.4-150 kV were commissioned.

Works for the total amount of RUB 8,157.1 million (including VAT) were financed.

In 2010 the consequences of the financial crisis, decrease in the regional energy consumption volumes, worsening of the payment discipline of energy transmission counteragents and decrease in revenues substantially affected the volume of the investment program of JSC IDGC of the North-West.

In 2011 the post-crisis recovery and considerable increase in the volume of works for technological connection of consumers allowed to increase the total volume of capital investments of JSC IDGC of the North-West almost twice compared to 2010. Moreover, Vologdaenergo and Pskovenergo branches switched to RAB regulation.

In 2012 the switch of the branches to RAB regulation was completed, which allowed to increase the volume of the investment program of JSC IDGC of the North-West by 30% compared to 2011.

Major Investment Projects

The consolidated investment program for 2012 includes 13 major investment projects. Under five of the projects new fixed assets were commissioned.

In 2012 works were completed under the following four projects:

•  In March 2012, Vologdaenergo branch completed the second stage of investment project "Reconstruction of overhead line 110 kV within SS 110 kV Lugovaya with overhangs to DS 110 kV" within the framework of performing technological connection of Vologda CHP (JSC TGC-2).

On the section of reconstruction of OL 110 kV AS wire was replaced by composite aluminum wire ASSR300-Т16, allowing for a substantial increase of the capacity of OL 110 kV.

New fixed assets amounted to RUB 54.483 million, in physical terms 2.984 km of lines were commissioned.

The goal of this investment project is to connect and supply new generating capacities to Vologda CHP required as a result of construction of the combined cycle gas turbine (CCGT). Construction of DS 110 kV to supply capacity from Vologda CHP directly to JSC TGC-2 was due to the adoption by JSC TGC-2 of long-term strategic development plans in order to increase the electric power sales market providing maximum heat supply to consumers. Implementation of the project in full will create the optimal scheme of electric power supply by CCGT-110 unit to be installed at Vologda CHP.

The implementation of the project commenced in 2009. In 2010 project design works were completed and key power equipment was supplied and in 2012, within the first stage of construction, 5 cells with SF6 circuit breakers PASS M0 (ABB) were erected and put into operation.

The total new fixed assets under this investment project amounted to RUB 208.6 million.

• In December 2012 Vologdaenergo branch put into operation DS 110 kV for connection of Krasavino GT CHP to the Vologdaenergo electric grid.

The construction of DS 110 kV was associated with the necessity of connection of substation 110 kV of Krasavino GT CHP to the existing grids 110 kV of Vologdaenergo branch. At the moment, Krasavino GT CHP is put into operation and connection to the grid is carried out using the existing 110 kV lines, which are not tailored for a full load. The construction of DS allowed to ensure normal functioning of the lines with distribution of flows among 4 lines, which contributed to a considerable reduction of power loss in the Company's grids.

The implementation of the project for construction of DS 110 kV in the territory of open distribution device (ODD) 110 kV of Krasavino GT CHP provides an opportunity for further development of infrastructure of the Veliky Ustyug district and the Vologda Region and ensures reliable and uninterrupted power supply to consumers.

In the process of construction of DS the following state-of-the-art equipment was used: ODD 110 kV was carried out on cells PASS M0 (4 linear cells and 1 sectional cell). In the modular ODD micro-processor relay protection devices, automatics, telemechanics, and communication were installed.

The project realization began in 2010. In 2011 project design works were completed and construction works on the site were commenced.

Fixed assets under this project amounted to RUB 160.6 million.

• In September of 2012 Novgorodenergo branch put into operation substation 110/10/6 Parfino after its full reconstruction.

From 2008 SS 110/10/6 kV Parfino was a closed substation. The capacity of power transformers that had been installed earlier (10 and 6.3 MVA) did not allow to connect new and increase the supply to existing consumers. There was no possibility to take one of the transformers out of the load in peak fall-winter seasons.

The project implementation commenced as early as in 2006, however, due to the lack of financing sources, the Company kept postponing it to later periods. As a result, a full scale reconstruction of SS 110/10/6 kV Parfino commenced in 2011 and was carried out in two stages. In 2011works for removal of existing utility and communication networks from the construction footprint were performed and the first power transformer was installed. In 2012 the second transformer was assembled on the site, works for assembly of open distribution device 110 kV, relay protection devices, automatics, telemechanics and communication were performed.

SS 110/10/6 kV Parfino is equipped with two transformers of 16 MVA each, SIЕMENS commutation equipment, modern cells of 6 and 10 kV, equipment and data transmission protection means. The energy facility operation is controlled through a computerized control station located in the territory of the substation.

New fixed assets under this project amounted to RUB 284.7 million, is physical terms transformer capacity 32 MVA was commissioned.

• In December 2012 Komienergo branch completed works under investment project "Construction of OL 20 kV, OL 10 kV, OL 0.4 kV, DS 20/10 kV, PTS 10/0.4 kV for energy supply to Abez village".

In accordance with Minutes No. 184pr of the Joint Meeting of the Ministry of Industry and Energy of the Republic of Komi, JSC IDGC of the North-West and ZAO Yamalgazinvest on organization of stable energy supply to Abez village of August 27, 2009 the cost of construction of this facility was provided under the agreement for technological connection of facility "Control Base of Automatic Load Transfer (ALT) Combined with the Administration Complex of Vorkuta Line Production Management Department of Main Pipelines" to the electric grids of the branch of JSC IDGC of the North-West Komienergo.

As a result of implementation of investment project "Construction of OL 20 kV, OL 10 kV, OL 0.4 kV, DS 20/10 kV, PTS 10/0.4 kV for energy supply to Abez village" the following facilities were constructed:

• distribution point of DS 10/10 kV — 1;
• PTS 10/0.4 kV in Abez village — 1;
• DTS 10/0,4 kV in Staraya Abez village, Yarpiyag village — 2;
• two-chain OL 10 kV on multi-faceted metal supports, length 15.792 km;
• one-chain OL 10 kV on multi-faceted metal supports, length 13.532 km;
• cable junction over the existing railway bridge across the Usa river, length 0.72 km;
• OL 0.4 kV, length 10.559 km;
• repair and operation base (ROB) in Abez village with a full set of machines and equipment — 1;
• cable junction over the railway by the horizontal directional drilling method (HDD) — 0.152 km;
• radio towers (3).
• automatic voltage control points (10 kV) were installed;
• DPPs were installed.

The project implementation allowed to increase the reliability of energy supply to towns and villages of the Inta district of the Republic of Komi.

New fixed assets amounted to RUB 299.7 million (out of which RUB 2.4 million was invested in 2011). In physical terms 5.36 MVA of transformer capacity and 37.431 km of power transmission lines with voltage of 0.4-20 kV were commissioned.

• Furthermore, in 2012 Komienergo branch completed works under the first stage of investment project "Construction of Overhead Line110/35/10 kV Sokolovka-Pazhga with the expansion of SS 110/35/10 kV Sokolovka, SS 110/35/10 kV Pazhga".

The performance of the first-stage works allowed to connect the Finno-Ugric Ethnocultural Park with the required level of reliability and to ensure the electric supply to consumers of the Sysolsky, Priluzsky, Koigorodsky districts of the Republic of Komi.

As a result of the project implementation two-chain OL 110 kV with total length of 24.9 km and one-chain OL 110 kV with total length of 0.4 were constructed. New fixed assets amounted to RUB 132.3 million.

The project realization commenced in 2011 and project design works were completed in the same year. It is planned to complete works on SS Sokolovka and SS Pazhga by 2014. The second transformer with capacity of 6.3 MVA will be installed at SS 110/10 kV Pazhga. The estimated budget cost of the second stage is RUB 314.9 million.