Dubai will invest $100 million in electricity generator OGK-1, marking the last deal in the sell-off of former state power monopoly UES, the Russian company's chief executive Anatoly Chubais said on Monday.

With its assets sold or spun off, and a liberalised domestic power market in the works, state-owned Unified Energy System - formed in the early 1990s as a stopgap between the Soviet command system and privatisation - ceases to exist on Tuesday.

At a press conference marking the end of UES, Chubais said the Dubai government's investment arm is guaranteeing investments in OGK-1, which is the subject of an offer of as much as $5.3 billion from a Russian company, Roskommunenergo.

Chubais said the company had offered to buy OGK-1, which has big capital needs for stations in some of Russia's most energy intensive oil and gas regions, at a price of $516 per kilowatt.

Russian media have reported that Roskommunenergo was bidding on behalf of Dubai World. UES has already spun off 7 wholesale generating companies, known by the Russian acronym OGK, but an attempt to sell OGK-1 to a consortium of investors led by magnate Viktor Vekselberg failed as the group balked at its high investment needs.

Roskommunenergo's offer sent OGK-1 shares soaring 25 percent by 1000 GMT. They stood at 2.2 roubles per share, a discount of around 15 percent to Roskommunenergo's offer price. Shares in
UES were delisted earlier this month.

In terms of price per one OGK-1 share, the Roskommunenergo offer works out at 2.6 roubles per share, a spokeswoman for UES told Reuters.

Chubais said the total price would not exceed 125 billion roubles ($5.33 billion). Marking a new stage of Russian power reform, which will see the development of liberalised electricity trade, the government has approved the launch of a capacity market where independent generators can buy and sell each other's excess capacity - a key step toward loosening state price controls.

The decree was published on Monday in the government newspaper, Rossiiskaya Gazeta.-Reuters