Russian national hydro power company Hydro OGK has started construction of the Zaramagskoy GES-1 plant in North Ossetia.
The 242MW scheme is being built on the river Ardon and is scheduled for completion in 2011, Hydro OGK said in a statement.
Electricity demand in the state is 2.1B kWh per year but generating capacity in the region gas only been able to meet 16% of the demand, it added. The hydropower potential of the mountain river of North Ossetia is 5.2B kWh.