EuroSibEnergo’s Hong Kong IPO Threatens Rivers of Siberia and Lake Baikal

Monday, March 14, 2011

An international coalition of NGOs for the protection of transboundary rivers, Rivers without Boundaries, has presented evidence of undisclosed environmental risks to investors in advance of EuroSibEnergo's IPO on the Hong Kong stock exchange. The report presented on the International Day of Action for Rivers exposes the environmental risks associated with EuroSibEnergo's plans to use the proceeds from its IPO to build two mega dams in the fragile river system in Siberia, including those connected to protected Lake Bakal, the largest freshwater system in the world.

In connection with EuroSibEnergo plans to seek investors (holding an IPO on the Hong Kong exchange) and statements made by EuroSibEnergo company management and En+ (the group including Rusal and EuroSibEnergo, part of "Basic Element" Holding) about the construction of new large-scale hydro and coal-burning power plants in Russia to supply energy for the domestic market and export, we consider it necessary to make the following statement.

At the end of February 2011, on the Hong Kong stock market, there should have taken place an previously delayed IPO by the EuroSibEnergo Company with the aim of attracting 1.2 billion dollars in investments. Plans for cooperation with the Chinese Yangtze Power (within the framework of the Joint Venture Yes Energy) propose the construction of power stations producing up to 10 GW of energy including at least two hydroelectric power stations and one thermal power station in Ust-Kut with a total output of 3 gigawatts. The energy produced is intended both for the internal Russian market and for export to China along high-voltage power lines via the Chita Region and Manchuria.

Russian NGOs declare with all responsibility that participation in the project proposed will involve potential investors in a large number of environmental, social, reputational and other risks. We appeal to the stock exchange management, to banks organising public offers and to potential investors to take into consideration the risks described below and abstain from participation in EuroSibEnergo's IPO.