Eastern European Markets
May, 7th, 2007

Share issue in Russian TGC-1 - Fortum prepared for participation

At its extraordinary shareholders meeting on April 28, 2007, Russian Territorial Generating Company 1 (TGC-1) decided on a share issue. TGC-1's Board of Directors has today confirmed the decision. The total maximum amount of new shares is 1,875,228,129,448.

The share offering aims at increasing the share capital of TGC-1 by approximately 32.4 billion rubles (about 930 million euro). Fortum´s target is to maintain its current, slightly over 25% stake in the company. Fortum is thus preparing for acquisition of the corresponding amount of new shares.

The planned use of the new capital is financing the company´s investment program to increase production capacity.

TGC-1 in North-West Russia was founded in 2006 as part of the Russian power sector reform. The company operates in a large area, from St. Petersburg to the Kola Peninsula. The production capacity of TGC-1 is about 6,000 MW power and about 17,000 MW heat. With its slightly over 25% stake, Fortum is the second largest shareholder of the company.

Fortum still owns about one third of the electricity distribution company Lenenergo in St. Petersburg.

Further information
Kari Kautinen, Vice President, Fortum Corporation, tel . +358 50 453 2174

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