RAO UES Management Board Chairman Anatoly Chubais and Krasnodar Region Governor Alexander Tkachev have signed an Agreement on Cooperation in Implementing Priority Power Construction And Modernization Projects in the Region Until 2011.

The past few years have seen rapid development of the Krasnodar Kray infrastructure and health resort business on the Black Sea and Sea of Azov coasts, construction of oil, gas and chemical facilities, transport networks, upgrade of seaports have, etc. The economic growth has been accompanied with a surge in electricity use.

In 2006, electric power consumption in the Krasnodar Kray grew by 6.3% compared to the year before. The maximum load in the transmission lines and transformer substations is observed in the Sochi and Novorossiysk energy areas, on the Taman Peninsula, in the cities of Krasnodar and Maykop.
The Agreement seeks to ensure reliable supply of electricity to customers, increase the network throughput capacity, create the conditions for new user connections to the power grids and increase the capacity available to the users already connected, and prevent power shortages in the most important areas of the region.

The Agreement envisages an all-round development of the region's generation capacity, grid facilities, and dispatch infrastructure using advanced technologies. It is planned to bring on line 1,100 MW of generation capacity, 7,200 MVA of transformer substations (29 substations and 59 transformers), and build 1,480 km of bulk transmission lines. RAO UES companies also plan further expansion of the distribution grids in the area. They will construct and put into operation low voltage transformer substations with the total capacity of 1,842 MVA and 87.9 km of distribution lines.

In order to further develop the power grids in the "Greater Sochi" area, Federal Grid Company plans to construct a unique 220 kV aerial cable line bypassing the mountain ranges, which will link the substations—Tsentralnaya Substation, Goryachi Klyuch Substation, Dzhubga Substation, Psou Substation, and an undersea cable from Dzhubga to Psou, and a new 220 kV Dzhubga substation.