The main task of long term development of the Company is to modernise and expand its electricity production infrastructure, which will make it possible to eliminate the significant deficit on energy capacity and establish a base for stable development in the long term.

Acting with the framework of Order of the Government of the Russian Federation of 17 October 2009 N 823 On Plans and Programmes for Long Terms Development of Electrical Energy, in 2011 Kubanenergo took direct part in developing a Master Plan and Programme for Long Term Development of Electricity Energy in Krasnodar Region for 2012-2016 (hereafter the Master Plan and Programme). This Programme is synchronised with the long term investment programme at FSK EES, which manages the Single National (Russian) Electricity Grid. The Master Plan and Programme were approved by the Administration of Krasnodar Region in 2011. The Master Plan and Programme meet the main parameters of the long term Investment Programme at Kubanenergo for 2012-2016.

This plan was developed for the Kuban electricity network, a territory which includes two subjects of the Russian Federation: Krasnodar Region and the Republic of Adigeya. In accordance with the Master Plan and Programme, by 2016 particular attention will be paid within the Companys electricity production to development of the most problematic districts in Krasnodar region and the Republic of Adigeya: the Sochi, South West and Central energy districts, which need improvements to the electricity production network. Taking into account the planned absorption of new consumers in line with previously concluded contracts on technological connection, the Company intends to reduce the number of closed centres by at least 10% - substations with insufficient capacity - in all problematic districts, as well as unconditionally ensure the necessary capacity to Olympic facilities in the city of Sochi.

More than a third of the new capacity is planned to be brought into operation in the Sochi energy district itself. This will make it possible to create appropriate conditions for construction of Olympic infrastructure facilities essential for hosting the 2014 Winter Olympic Games. The main work in dealing with the existing shortages in electricity capacity and creating basic infrastructure for construction of Olympic facilities was carried out in 2010-2011 and will be continued in 2012.

Priority areas in the field of technological connection will also be development Tuapse and Novorossiisk industrial zones in Temryusk District; construction of the Golden Sands gaming zone in Blagoveschenskaya Village; the Lago Naki mountain resort; as well as eliminating shortages of capacity in major industrial and residential centres in the Region: Krasnodar, Novorossiisk, Tuapse and Greater Sochi.