Stock exchange release

Fortum discusses its capital expenditure and increases TGC-10 efficiency improvement target in Capital Markets Day

30 October 2008, 08:30 EET

Fortum Corporation Stock Exchange Release 30.10.2008 at 8.30 EET

Fortum discusses its capital expenditure and increases TGC-10 efficiency        
improvement target in Capital Markets Day                                       

Fortum Capital Markets Day for analysts, portfolio managers and bankers is held 
today on 30 October in Espoo, Finland. During the event, Fortum management will 
discuss the company's strategy and financial position.                          

Fortum confirms its strategy focusing on the Nordic countries, Russia and the   
Baltic rim area, and stresses the strength of its balance sheet and its good    
liquidity. The company had liquid funds amounting to EUR 1.7 billion and undrawn
committed credit facilities of EUR 1.9 billion on 28 October. Fortum's maturing 
debt for the reminder of 2008 is EUR 0.3 billion and for 2009 EUR 0.5 billion.  

There is significant flexibility in Fortum's investment programme - the level of
annual investments can be adjusted depending on the overall economic conditions 
and availability of funding at a reasonable cost. The annual level of Fortum's  
capital expenditure including investments in Russia is estimated to be within a 
range of EUR 1.0-1.5 billion during 2009-2013. In 2009, capital expenditure is  
expected to be close to the higher end of the range. During 2009, two new       
combined heat and power plants (Suomenoja, Finland and Tartu, Estonia) will be  
commissioned bringing volume and earnings growth.                               

Fortum's Russian acquisition, Territorial Generating Company 10 (TGC-10) has    
committed and contractually obligated to an extensive investment programme which
will increase its electricity generation capacity by approximately 70% to 5,300 
MW by 2013. The value and timing of the investment programme in new capacity,   
initially estimated by TGC-10 at EUR 2.2 billion, has been reviewed as the      
contract negotiations and programme execution have progressed. The Russian      
capacity investment programme is now estimated to amount to approximately EUR   
2.5 billion. Out of this, approximately EUR 400 million will have been spent    
during 2007-2008.                                                               

Fortum has put considerable efforts into integrating TGC-10 to Fortum. Fortum   
management model, organisational structure and the way of working were in place 
at the beginning of September. The integration has proceeded well and several   
targets for efficiency improvements have been identified. Consequently, the     
previously announced annual efficiency improvements of at least EUR 30 million  
are expected to increase to over EUR 100 million and to be reached in 2011.     

In April 2008, Fortum made a mandatory public tender offer (MTO) for the entire 
share capital of TGC-10 to TGC-10's minorities. The MTO has now been completed. 
Fortum's ownership in TGC-10 reached approximately 93.4% including shares owned 
by TGC-10's fully-owned subsidiary. Fortum has paid approximately EUR 443       
million for share purchases under the MTO. The total consideration for Fortum's 
current ownership in TGC-10 amounts approximately to EUR 2.5 billion including  
the EUR 1.3 billion new share issue Fortum subscribed to in February.           

TGC-10 will continue to be a key focus area for Fortum also in the coming years.

Fortum Corporation                                                              
Maria Romantschuk                                                               
SVP Corporate Communications                                                    

Further information:                                                            
Juha Laaksonen, CFO, Fortum Corporation, +358 50 4524519                        
Mika Paloranta, Vice President, IR, Fortum Corporation, +358 50 4524138         

NASDAQ OMX Helsinki                                                             
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