30 December 2005 - Russian energy investor IES Holding and the Federal Grid Company (FGC) have signed an agreement on cooperation aimed to increase the market value of the power distribution grid sector.

Under the agreement the parties will develop and propose to introduce a price control system in compliance with international standards to raise the grid sector capitalization. The system will ensure a favourable investment climate in the entire industry.

In addition, the parties will work to standardize grid companies' accounting procedures, ensure transparency of their financial performance, and define measures to improve the companies' operations. A working group of IES and FGC representatives will soon be established to address these issues.
In the first half of 2006, IES intends to establish a special investment fund; the fund will hold the stocks in nine distributing grid companies in which the company has an interest. The value of the stocks totals around $100m, IES estimates.

A management company will be set up to manage the Fund, aiming to double the value of the grid assets within three years. The management company will be working to attract additional assets of other grid company shareholders to the Fund.