Cabinet Approved Technical Plan Of Donbasenergo's New Power Unit Construction.

Donbasenergo (DOEN: BUY) is going to build a combined heat and power unit with electricity capacity of 125 MW and heat capacity of 110 GCal (128 MW). The power unit will have an economical and environment friendly CFB boiler, fueled by coal and coal refuse. The construction costs are estimated to be around USD 72 mln, it will take about three years to build the new unit. Concorde Capital: In our DOEN report from July 2005 we mentioned that the construction plan had been adopted by a special commission. Now, with the government’s approval, we expect construction to start soon. According to the government’s decree from 2004, 85% of the costs related to construction would be absorbed by a special surcharge to DOEN’s tariff, thus it should not affect the company’s cash flow. Note that this will be DOEN’s second power unit which uses modern CFB technology.