Stock exchange release

Fortum to acquire controlling stake in Russian TGC-10

29 February 2008, 10:30 EET

Fortum will acquire a controlling stake in the Russian territorial generating   
company 10 (TGC-10). The acquisition is in line with Fortum's growth strategy   
and will make Fortum a significant player in one of the world's largest energy  
markets with high demand growth. If Fortum reaches a 100% holding in TGC-10, the
total value of the transaction will be around EUR 2.7 billion. Fortum will      
retain its financial flexibility and will continue its Nordic investment        
programme as planned.                                                           

Fortum participated in a share auction conducted on 28th February to acquire a  
controlling stake in the listed Russian TGC-10. Fortum will acquire a 29% stake 
of the company from RAO UES for EUR 0.8 billion. In addition, Fortum has        
committed to acquiring a further 34-47% stake (range depending on how minority  
shareholders will use their pre-emption rights) in TGG-10 through a share issue 
for EUR 0.9-1.3 billion. This capital increase of EUR 1.3 billion will remain in
TGC-10 and will be used to finance its committed capacity investment programme  
planned at EUR 2.2 billion.                                                     

In the first phase of the transaction, Fortum will receive 63-76% of the        
company's shares and voting rights. The closing of the first phase is expected  
in March 2008. Fortum will also make a mandatory offer to purchase the remaining
24-37% of the shares held by minority shareholders.                             

The total consideration, EUR 1.7-2.7 billion, is to be financed with long-term  
bank loans. Fortum's pro forma net debt/EBITDA will be around 2.8x at           
acquisition assuming Fortum will reach 100% ownership of TGC-10.                

“The acquisition of TGC-10 is a significant step in delivering on our strategy. 
This is a great opportunity to become a significant player in the world's 4th   
largest energy market. We will maintain our financial flexibility that allows us
to continue our Nordic capacity investment programme and finance potential      
future investments. We are very pleased to have successfully taken this         
strategically important step”, says Mikael Lilius, Fortum's President and CEO.  

TGC-10 is a territorial generating company operating in Urals region. Out of all
territorial generating companies, TGC-10 has the best capacity utilization rates
and it is the leading district heating supplier in its area. The total installed
capacity is 3,000 MW electricity and 15,800 MW heat with annual production of 18
TWh electricity and 27 TWh heat, to be compared with Fortum's current 10,900 MW 
electricity and 11 200 MW heat with production of 52 TWh electricity and 26 TWh 
heat. The company has an extensive investment plan to further increase its      
electricity production capacity with 2,300 MW by 2013. The generation assets are
located in an area with significant oil and gas industry. The number of         
employees is 6,100.                                                             

"In the on-going Russian energy sector reform, TGC-10 is an excellent entity for
Fortum. It operates in the heart of the fast growing Russian oil and gas        
producing regions. We know we can contribute to the Russian energy sector in    
many ways - by being a reliable energy partner and by bringing in leading       
technologies and best practices to improve efficiency and thus make a positive  
impact on the environment. We are very inspired by the work ahead of us", says  
Tapio Kuula, Senior Vice President of Fortum.                                   

Fortum Corporation                                                              
Maria Romantschuk                                                               
SVP, Corporate Communications	                                                  

Further information:                                                            
Mikael Lilius, President and CEO, Fortum Corporation, +358(0)10 45 29100        
Tapio Kuula, Senior Vice President, Fortum Corporation, +358(0)10 54 24112      

Press conference and conference call for analysts                               

A press conference (in Finnish) will be arranged at 12.30 Finnish time in the   
auditorium of Fortum's head office, Keilaniementie 1, Espoo. The press          
conference will be webcasted and available on our website.                      

You can also participate in an international teleconference for analysts and    
investors at 4.30 p.m. Finnish time on 29 February by dialing +44 (0)20 3023    
4410 (if calling from Europe) or +1 866 966 5335 (if calling from the US).      
Participant code for both numbers: Fortum Corporation.                          

If you are unable to participate, there will be a replay facility available for
one week after the teleconference. The number to dial is +44 (0)20 8196 1998
(if calling from Europe) or +1 8 665 831035, access code for both numbers:

A live audio webcast of the call will be available together with the slide
on Fortum's website at: