RusHydro Group 1Q 2018 IFRS results & market update

June 7, 2018 Disclaimer

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2 I. Key highlights & operating results

II. Financial results

III. Segment review

IV. Market update Key highlights of 1Q 2018

110.1 32.0 31.8 +3.2% 174.5 1.1x 11.2 66% RUB bn increase in RUB bn net debt/ EBITDA margin of RUB bn TWh manageable cash costs EBITDA (LTM) RUB bn hydropower segment Revenue EBITDA in 1Q‘18 Total RusHydro Financial debt of Dividend for FY2017 excl. fuel cost in 1Q’18 (1) in 1Q’18 in 1Q’18 (+5.9%) Group output in RusHydro Group recommended by the (+6.5%) 1Q’18 Board of Directors (+9.3%) (50% of IFRS profit)

1 • Total electricity output of the Group in 1Q’18 – 31.8 TWh (+9.3)% Operations  • RusHydro expects solid operational results to continue in 2018

2 Manageable cash costs printed a moderate growth of 3.2% (excluding fuel costs driven demand Operating efficiency  growth and lower hydropower output, as well as coal price growth) 3 Dividends  RusHydro management committed to 50% dividend payout from IFRS net profit in 2018 4 • Cancellation of RusHydro’s guarantee of RUB 26 bn in respect of Boguchaskaya HPP loan  • Successful placement of RUB 20 bn worth of 3-year loan participation notes on the Irish Exchange Financial policy • S&P raised long-term corporate credit ratings on PJSC RusHydro to ‘BBB-’ with ‘Stable’ outlook. Short-term corporate credit was raised to ‘А-3’ respectively.

5 • RusHydro committed to reduce direct greenhouse gas emissions by 6.1% through 2025 vs 2015 Sustainable development  • RusHydro initiated development of a unified occupational health and safety (OHS) policy in 2018

(1) Updated as at April 30, 2018 4 RusHydro Group 1Q 2018 operating results

. 31,8 TWh (+9.3% y-o-y) – total electricity production by power plants of RusHydro ↗ Volga-Kama cascade: increased water inflows to major reservoirs of the (1.2-2.5x); Group in 1Q 2018. ↗ South of Russia and Siberia: increased water • 22.1 TWh (+8.2% y-o-y) – total production by hydropower plants (HPPs) and inflow to major reservoirs (+10-25%); pump storage hydropower plants (PSPs) ↗ RAO ES East: growth of electricity generation • 9.6 TWh (+11.9%) – electricity production by fossil fuel plants in the Far East by thermal power plants due to lower hydro . 13,039 thousand GCal (+7.7%) – total heat output by the thermal plants. volumes and increase in consumption; ↗ Far East: increase in electricity sales to China . 2.8 TWh (-11.7%) – electricity production of Boguchanskaya hydropower plant. and UES of Siberia by 25% y-o-y.

1Q’17/18 – European part of Russia and Siberia (price zones), GWh 1Q’17/1Q’18 – Far East (non-price and isolated zones), GWh

+12.5% +5.3%

4,499 5,594 4,807 5,788 Siberia Hydro, RES 1,141 South 1,204 Center Thermal 10,957 8,561 9,581 8,729

1Q 2017 1Q 2018 1Q 2017 1Q 2018

FY’16/FY‘17 – European part of Russia and Siberia (price zones), GWh FY’16/FY’17 – Far East (non-price and isolated zones), GWh +3.1% -0.6%

18,195 16,753 25,380 29,208 Siberia Hydro, RES 6,826 South 8,239 Thermal Center 29,379 30,555 39,372 46,985

2016 2017 2016 2017

5 Hydropower production trends 2014-2018

Center of Russia, GWh Siberia, GWh

2015 2015 6 000 2016 3 750 2016 5 500 2017 2017 2018 3 250 2018 5 000 Long-run average Long-run average 4 500 2 750 4 000 3 500 2 250 3 000 1 750 2 500 2 000 1 250 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

South of Russia & N. Caucasus, GWh Far East, GWh

2015 2015 1 500 2016 2016 2017 2017 1 500 2018 2018 1 250 Long-run average Long-run average 1 300 1 000

750 1 100

500 900

250 700 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6 Electricity spot market overview

. RusHydro’s average achieved selling spot power prices in European Russia in 1Q’18 – RUB 1,249/MWh (-3%); in Siberia in 1Q’18 – RUB 867/MWh (-1%). . Non-indexation of gas tariffs for industrial consumption in 2016, increase as of 2H 2017 – ca.3%. . Low demand growth and overcapacity on the market coupled with below-inflation hikes in gas tariffs led to stabilization of unregulated power prices in European Russia. . Gradual decommissioning of excess and outdated fossil fuel capacity in European Russia to support unregulated power prices going forward.

Europe and Urals (1st price zone), RUB/MWh (1) Siberia (2nd price zone), RUB/MWh (1)

1298 1269 1254 1233 1202 1204 1224 1221 1164 1204 1204 1026 1154 1184 1179 1180 1187 1167 994 983 1147 1148 1104 1136 914 1120 1122 928 928 1116 922 866 913 865 895 888 854 789 828 1043 800 790 777 764 718 1002 762 723 714 677 639 662

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018

(1) Day ahead selling prices data from the Administrator of the trading system (ATS). Could differ from RusHydro’s average achieved selling spot power prices. 7 Regulated market overview

Key highlights Average electricity tariffs for RusHydro’s HPPs in pricing zones RUB/MWh +45.5% . Electricity tariffs demonstrated healthy growth over the period 25.2 of 2015-2018 22.2 18.5 . Indexation of capacity tariffs in 2015-2018 amounted to 12.0% 16.0 20.0 in the European part and 11.0% in Siberia (cumulatively) 15.5 17.9 13.7 . In the Far East, tariffs (on electricity and heat) vary depending +57.0% on the region. In 2017-2018, most of them were subject to indexation above CPI levels 2015 2016 2017 2018 European Russia Siberia

Average capacity tariffs for RusHydro’s HPPs in pricing zones Electricity and heat tariffs growth in the Far East

‘000 RUB/MW/month Electricity tariffs Heat tariffs +12.0% 2017/2016 2018/2017 2017/2016 2018/2017 DGK 5.4% 1.0% 3.8% 4.4% DEK 7.4% 5.9% - - 130.4 124.8 127.5 116.4 Kamchatskenergo 12.1% 11.5% 8.6% 4.2% YuESK -0.8% 6.1% 4.3% -8.0% +11.0% Magadanenergo 14.4% 12.6% 4.3% 6.3% (1) 42.8 42.9 46.0 47.5 Chukotenergo 11.4% 88.1% 6.2% 11.4% Sakhalinenergo 1.2% 10.2% -2.5% 0.0% Yakutskenergo 27.7% 9.0% 11.6% 9.9% 2015 2016 2017 2018 Sakhaenergo 8.9% 9.5% 11.4% 8.4% European Russia Siberia Peredvizhnaya Energetika 22.3% 4.5% - -

(1) The tariff hike assumes an additional subsidy of ca. RUB 1 bn for Chukotka energy system that was due to be received in 2017. 8 I. Key highlights & operating results

II. Financial results

III. Segment review

IV. Market update 1Q 2018 financial results review

Key highlights . Key growth factors: ↗ solid operating results of hydropower plants in European Russia; ↗ increase in revenue from electricity sales of RAO ES East subgroup; 110.1 32.0 29.1% +3.2% ↗ growth of capacity sales following prices indexation. RUB bn RUB bn EBITDA margin manageable costs increase (excl. fuel . Negative factors affecting results: revenue EBITDA in 1Q 2018 cost) in 1Q 2018 ↘ Increase in fuel costs following significant increase in electricity and heat output as in 1Q 2018 In 1Q 2018 well as coal price growth. (+6.5%) (+5.9%) ↘ Increase in electricity distribution expenses as a result of transmission tariffs growth.

Revenue, bn RUB Operating expenses, bn RUB Operating revenue Government grants 103.4 110.1 4.6 10.4 84.8 98.8 99.7 78.9

1Q'17 1Q'18 1Q'17 1Q'18 EBITDA, bn RUB Net profit, bn RUB EBITDA EBITDA margin Net profit (reported) Net profit (adjusted) (1) 29.1% 29.3% 20.4 20.9

32.0 18.8 23.0 30.2 1Q'17 1Q'18 1Q'17 1Q'18 1Q 2018 EBITDA: cost analysis, bn RUB

0.0 +0.2 -0.3 -0.5 -3.3 -0.6 +6.7 -0.4

30.2 32.0

EBITDA Revenue Other operating Purchased electricity Employee benefit Grid company services Fuel expenses Third parties Other expenses EBITDA 1Q'17 income and capacity expenses on electricity distribution services 1Q'18

(1) Net profit is adjusted for the effects of recognition of financial income/expense arising from the change in fair value of non-deliverable forward contract, impairment of fixed assets, impairment of accounts receivable, profit / loss on disposal of property, plant and equipment, as well as other operating income arising from the change in fair value of financial assets measured through profit or loss. 10 Operating expenses in 1Q 2018 – increase is mainly driven by growth of fuel costs

1Q 2018 operating expenses

OPEX FY'17 78.9 ↘ Fuel costs: increase in electricity and heat output of JSC DGK (+14.6% and +9%, respectively): Fuel costs +3.3 • electricity & heat output growth on lower hydro volumes • commissioning of Blagoveshenskaya TPP and Yakutskaya Employee benefit expenses +0.3 GRES-2 Grid company services on electricity +0.5 • coal price increase. distribution ↘ Grid company services on electricity distribution: planned Purchased electricity and capacity -0.2 +3.2% tariffs increase and higher volumes of electricity transmission increase in +7.5% following increase of useful output of ESC RusHydro subgroup as Third party services +0.4 manageable Total growth well as RAO ES East subgroup. Group’s of of expenses ↘ Depreciation: increase in value of PP&E after commissioning Depreciation +0.9 cash costs excl. fuel costs new facilities (including JSC Yakutskaya GRES-2 incl. off-site Taxes other than on income +0.4 construction in 2017-1Q 2018) as well as planned refurbishment & modernization of the Group’s facilities. Other materials -0.3 ↘ Employee benefits: moderate growth following indexation of remuneration for operating personnel. Water usage expenses +0.1 ↗ Purchased power: change in accounting policy and decrease of power purchase in ESC RusHydro segment. Other expenses +0.5 ↗ Other materials: change in operational activity of a number of OPEX FY'18 84.8 general contractors and lower repairs & maintenance.

RusHydro Group cash costs in 1Q 2018 – segment analysis (RUB bn) (1)

-3.0 +5.6 +1.9 +0.9 -0.4 78.1 73.1

1Q'17 PJSC RusHydro ESC RusHydro Subgroup RAO ES East Subgroup Other segments Misc & 1Q'18 undistributed operations

(1) Operating expenses excluding depreciation and other non-cash items 11 I. Key highlights & operating results

II. Financial results

III. Segment review

IV. Market update 1Q 2018 revenue: segment review (1)

1Q’18 revenue – segment review

+1.7 -0.4 -0.4 0.0

99.7 98.8 +0.9%

Revenue PJSC RusHydro ESC RusHydro Subgroup RAO ES East Subgroup Other Revenue 1Q'17 1Q'18

1Q’18 revenue – sales review

+1.0 +0.2 +0.3 -0.6

98.8 99.7 +0.9%

Revenue Electricity Sales Heat Sales Capacity Sales Other Revenue 1Q'17 1Q'18

1Q’18 electricity sales

-0.5 +2.2 -2.3 +0.0

66.6 -0.9% 66.0

Revenue PJSC RusHydro ESC RusHydro Subgroup RAO ES East Subgroup Other Revenue 1Q'17 1Q'18

(1) Revenue only from external parties (intergroup sales are excluded) 13 1Q 2018 EBITDA: segment review

0.0 -0.3 +0.6

+1.5 ↗ commissioning of ↗ increase in electricity and heat Blagoveshenskaya TPP output of JSC DGK (+14.6% and +9%, and Yakutskaya GRES-2 respectively) operating in cogeneration mode; ↗ solid operating results of hydropower ↗ Increase in electricity demand; plants in European Russia; ↘ coal price increase; ↗ stable spot pricing environment in both ↘ lower hydro volumes. price zones; ↗ growth of capacity sales following 32.0 prices indexation.

30.2

+5.9%

EBITDA 1Q 2017 PJSC RusHydro ESC RusHydro Subgroup RAO ES East Subgroup Other EBITDA 1Q 2018

14 Segment review (1/3) – PJSC RusHydro

Revenue, bn RUB Key highlights Revenue, external +8.8% Revenue, intergroup . Operations: 30.1 27.7 3.1 • 8.2% increase of electricity output from Group’s 2.4 hydropower plants operating in price zones even despite high base effect of 1Q’17. 27.0 25.3 • strong water inflows in 1Q’18 in all major reservoirs. . Pricing environment: 1Q'17 1Q'18 • Stable pricing environment supported by cold wave in March and a 7-9% demand growth in March 2018 y-o-y and >3+% Operating expenses, bn RUB growth in January-March 2018 y-o-y for Central and +9.8% Southern Russia; • average achieved selling spot power price in European Russia in 1Q’18 – RUB 1,249/MWh (-0.3%); 10.2 9.3 • average achieved selling spot power price in Siberia in 1Q’18 – RUB 867/MWh (-1%). . Operating expenses: 1Q'17 1Q'18 one-off 9.8% increase on the back of indexation of remuneration for operating personnel, tax and other expenses. Operating profit & EBITDA, bn RUB Operating profit EBITDA EBITDA margin, %

+14.7% +8.4% 66.5% 66.2% 19.9 18.4 16.1 14.0

1Q'17 1Q'18

15 Segment review (2/3) – RAO ES East Subgroup

Revenue, bn RUB Key highlights Governments grants . Operations: Revenue, intergroup +9.0% • total electricity production of RAO ES East Subgroup’s power Revenue, external 59.4 64.8 plants – 10,455 GWh (+11.8% y-o-y) on demand growth and 4.6 10.3 lower hydro output; 0.1 0.1 • heat output – 13,039 Gcal (+7.7% y-o-y) on lower air 54.7 54.4 temperatures in all the regions of the Far East with the exception of Chukotka; 1Q'17 1Q'18 • increase in electricity sales to China and UES of Siberia by 25% y-o-y. Operating expenses, bn RUB . Pricing / tariffs: +11.6% In 1Q’18, RAO ES East Subgroup saw a nominal increase in government grants due to introduction of a mechanism aimed at decreasing end-user electricity tariffs in the Far East of Russia (except for tariff for households) to an average 48.6 54.3 level of tariffs in Russia. The mechanism sees RusHydro collecting additional revenue via capacity sales (KOM price) 1Q'17 1Q'18 and transferring the proceeds in full to selected Far Eastern regions to offset losses incurred by subsidized power sales. Operating profit & EBITDA, bn RUB In 2017, the mechanism came into effect 5 out 9 regions of Operating profit EBITDA the Far East (see Appendix for details). EBITDA margin, % -9.5% -2.6% 18.2% . Operating expenses: Fuel costs and grid company services on electricity 16.2% 10.8 distribution expenses were the main drivers behind the 8.3 10.5 7.5 increase in operating expenses due to higher electricity output from thermal power generation; 1Q'17 1Q'18

16 Segment review (3/3) – ESC RusHydro subgroup (electricity retail)

Revenue, bn RUB Key highlights

-2.5% . Operations: • Total electricity output by RusHydro's retail 17.3 16.9 companies – PJSC Krasnoyarskenergosbyt, JSC Chuvash retail company, PJSC Ryazanenergosbyt and JSC ESC RusHydro – 6,025 GWh (+1.3% y-o-y). 1Q'17 1Q'18 • The increase was driven by an increase in net output by PJSC Krasnoyarskenergosbyt as a result of Operating expenses, bn RUB temperature factor and growth of customer base. • Increase in output by JSC Chuvash retail company is -2.3% driven by climate factor for the most part. . Outlook:

16.7 16.3 Improved outlook on accounts receivable following partial debt settlement by Concern "Tractor Plants“ (Cheboksary) in 2017 and continuing debt 1Q'17 1Q'18 restructuring.

Operating profit & EBITDA, bn RUB Operating profit EBITDA -7.4% EBITDA margin, % -9.4% 3.3% 3.1%

0.6 0.5 0.4 0.4

1Q'17 1Q'18

17 I. Key highlights & operating results

II. Financial results

III. Segment review

IV. Market update RusHydro Group debt profile (1)

Key highlights Debt repayment profile (2) (RUB bn) . Total financial debt as of Apr 30, 2018, amounted to RUB 174.5 bn. . Effective RUB interest rate of ca. 8.6% and comfortable weighted-average maturity of debt at 2.3 yrs. . Liquidity cushion (cash and cash equivalents, unused credit lines) amounts to RUB 212 bn and exceeds total repayment for the coming years. . In February 2018, guarantee obligation between PJSC RusHydro and Vnesheconombank on PJSC Boguchanskaya HPP was cancelled (RUB 26 bn). 74(3) . In April 2018, RusHydro and Far East Development Fund signed a loan agreement for RUB 5 bn with an interest rate of 5% p.a. with maturity date of 36.3 37.7 28.6 6.3 2026 to finance construction of Sakhalinskaya GRES-2 infrastructure facilities. 21.4 21.1 4.1 Current RusHydro Group’s credit ratings S&P Moody’s Fitch АCRА Cash & May-Dec 2019 2020 2021 2022 2023 2024-2041 Deposits 2018 BBB- (stable) Ba1 (positive) BB+ (stable) AAA(RU) (stable)

Transparent debt composition (RUB bn) Transparent debt composition

Other RAO ES East 9.4 Liability under the Subgroup forward contract with 37.5 VTB Bank Interest 98.2% – fixed rate 18.9 (4)

RUB Currency 94% – RUB 174.5 bn

PJSC RusHydro Sources 32% – state banks 54% – bonds 14% – 108.7 other

(1) As of April 30, 2018 (2) Debt excluding lease payments and liability under forward contract with VTB. (3) Cash and cash equivalents (bank deposits with a period of less than 1 year) as of April 30, 2018 (4) Liability under the forward contract with VTB recorded as a long-term derivative financial instrument at fair value in RusHydro Group’s IFRS in the amount of RUB 18.9 bn as of March 31, 2018. 20 Hydrological situation and outlook 2017/2018

Water levels at key reservoirs in May 2017/2018 . Winter season of 2017/2018 in most of the regions of the Russian 2017 2018 Federation was anomalous. The temperatures in the regions of the 140% 130% country were among top-10 highest readings in the history of 104% 120% 99% 100% 103% 96% meteorological observations. Cold front came only in the second half 100% 92% 93% 80% of January with temperatures in Yakutia, Siberia and the Volga region 60% reaching -60ºС, -50 ºС, and -30 ºС, respectively. 40% 20% . In March, the average temperature was below the normal level in 0% most of the country. In the central part of Russia March was colder Volga-Kama Sayano-Shushenskoe Zeyskoe Chirkeyskoe than January. It was the coldest month in the Volga Region, the 2nd cascade reservoir reservoir reservoir coldest in the Urals and the 3rd coldest in the Central region in the XXI Water inflow to the main reservoirs of HPPs in Jan – May 2018 century. The Black Earth Belt region did not see such cold in over 50 2017 2018 150% years. 122% 108% 98% 101% 103% 99% 103% 100% . Due to mostly warm weather in winter, total water inflows to 66% reservoirs on the Volga and Kama in the autumn-winter period of 50% 2017/2018 was 38.7 km3 (normal level – 21.3 km3). 0% . In 1Q 2018, the water inflow in the North Caucasus was 10% above Volga-Kama Sayano-Shushenskoe Zeyskoe Chirkeyskoe the normal level. cascade reservoir reservoir reservoir . Total water inflow to the reservoirs on the rivers of Siberia and the Far East was 5-45% above the normal level, while on the Lake Baikal it was Current water reserves in RusHydro’s key reservoirs are 30% below the normal level. close to the normal level. . In April-May 2018, electricity output of RusHydro’s hydropower fleet was mostly flat y-o-y, hydroelectric plants operating in price zones Accumulated water reserves were sufficient to increased production by ca. 2% y-o-y, in 5mo 2018 – by >7% y-o-y (1). guarantee the necessary level of electricity output of RusHydro’s HPPs during the autumn-winter period of . In 2Q 2018, water inflows to the reservoirs of the Group’s hydropower plants are expected to be close to or above the normal 2017 – 2018. levels.

(1) Preliminary data 20 Dividends – 50% payout of net profit maintained

Dividends (RUB bn) . On May 25, 2018, Board of Directors recommended the Annual General 19.9 Meeting of Shareholders (to be held on June 27, 2018) to pay out 50% of 2017 IFRS net profit or 2.63 kopecks per share. Ex-dividend date – July 7, 2018. 15.0

. As of 2015, RusHydro dividend policy provides for dividend payment based on 11.2 consolidated IFRS net profit.

6.0 . RusHydro is still committed to long-term growth in dividend payments 5.2 3.7 following improvement in free cash flow generation and better regulatory 2.5 2.5 visibility of its business in the Far East.

. 2011 2012 2013 2014 2015 2016 2017 2018 Dividend payments reduce RusHydro liabilities (and effective interest rate) (25% of IFRS (50% of RAS (50% of IFRS (50% of IFRS under the forward contract with VTB. profit) profit) profit) profit)

Dividend yield of the Russian generating companies(1) Dividend per share

2011 2012 2013 2014 2015 2016 2017 2018 Federal Grid 0.7% 0.0% 0.0% 0.7% 1.1% 6.6% 9.5% 8.2% 4.66 Quadra 1.9% 2.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3.88 Unipro (EOn Russia) 0.0% 2.6% 10.8% 16.2% 8.8% 7.2% 7.8% 4.0% RusHydro 0.6% 1.0% 1.3% 2.3% 2.5% 6.5% 5.6% 3.6% 2.63 Rosseti 0.0% 0.0% 0.0% 0.0% 0.0% 0.7% 0.8% 1.5% 1.56 Mosenergo 0.6% 1.7% 2.2% 4.6% 1.0% 3.6% 3.6% 6.5% 1.36 0.96 InterRAO 0.0% 0.0% 0.0% 0.0% 0.1% 0.8% 3.6% 3.4% 0.86 0.79 Enel Russia 0.0% 0.0% 0.0% 5.0% 9.0% 0.0% 6.8% 9.7% TGK-1 0.2% 0.5% 1.7% 2.6% 4.8% 4.9% 2.8% 4.5% 2011 2012 2013 2014 2015 2016 2017 2018 OGK-2 0.3% 0.1% 0.0% 0.0% 2.9% 2.1% 2.1% 3.8% (25% of IFRS (50% of RAS (50% of IFRS (50% of IFRS profit) profit) profit) profit)

(1) Calculated based on the date of announcement of recommendations on dividends by the Board of Directors. 21 2018 outlook and key drivers of 2018 financial performance

1 • The President of the Russian Federation and key ministries support the RusHydro’s proposals to introduce guaranteed ROI in the Far East which could help substitute retiring capacity of RusHydro’s facilities in the Far East Far East development • Ministry of Energy could finalise parameters of project selection for capacity modernization in 2Q/3Q 2018 • First project selection (price auction) could be held by year-end (with expected capacity delivery through 2022-24)

2 • In the 5 months of 2018, RusHydro’s hydropower plants increased electricity production by ca. 4% y-o-y, hydropower plants operating in price zones – by >7% y-o-y (1) Operations • RusHydro maintains solid operational outlook through 2018, will update its FY’18 production guidance in 2Q’18 operational update.

3 • Commissioning of the Sakhalinskaya GRES-2 (120 MW), Zaramagskaya HPP-1 (342 MW), Ust’-Srednekanskaya HPP (142 Capacity additions MW), Vostochnaya CHPP (140 MW), modernization and increase in capacity of existing power plants (63 MW) • Increase in RusHydro group installed capacity in 2018 is expected at 807 MW

Key positive factors in 2018 Operational EBITDA (Rub bn) ↗ Solid operational results on the back of favorable Targeted investment component (Rub bn) hydrological conditions; ↗ Commissioning of new capacity and increased output from newly launched plants; ↗ Successful cost optimization and efficiency gains; ↗ Further debt refinancing with better terms

24 13 100 104 73 Negative factors/risks that could affect 2018 results 26 79 73 64 ↘ Risk of reduced inflows to main reservoirs; ↘ Flat or lower spot electricity prices due to low demand and 44 37 capacity oversupply; 26 ↘ Increase in fuel costs in case of increased utilization of thermal capacity and interruption in fuel supply; 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ↘ Increase in non-controllable costs.

(1) Preliminary data 22 Group’s investment plan 2018-2023

Group’s investment plan 2018-2025, RUB bn (incl. VAT) (1) . RusHydro will add >1.5 GW and 1 ths. Gcal/h of capacity through to 2023, incl.: • 120 MW / 18 Gcal/h – Sakhalinskaya GRES-2, coal (1st stage) 123.7 Other • 143 MW – Ust-Srednekanskaya HPP 5.3 Priority thermal projects in the Far East • 342 MW – Zaramagskiye HPP (DPM contract) New construction 29.8 93.8 • 140 MW / 432 Gcal/h – Vostochnaya CHPP, gas Rehabilitation & modernization (hydro, thermal, grids) • 120 MW / 200 Gcal/h – Sovetskaya Gavan CHP, coal 4.1 • 320 MW – Nizhne-Bureyskaya HPP 16.6 72.6 • 300 Gcal/h – Peaking boiler plant at Yakutskaya TPP 4.0 56.2 • 261 MW – Capacity uprate /modernization 54.2 0.7 31.1 48.8 • 70.5 MW – Small HPPs (DPM for renewables contracts) 25.8 3.8 47.2 11.6 3.7 3.6 . Increase over prior projections driven by additional cost of Nizhne-Bureyskaya 6.1 6.3 HPP construction and greenfield construction of 5 small hydropower plants contracted under DPM agreement for alternative renewables; 34.4 41.9 42.1 40.8 39.0 37.4 . CAPEX forecast based on highest capped figures, and management will seek to optimize yearly outlays to ensure stable financial position of the Group. 2018 2019 2020 2021 2022 2023

RusHydro Group Boguchanskaya HPP +120 MW +140 MW +63 MW 39.9 GW 38.7 GW 38.9 GW 39.0 GW +342 MW +142 MW

Ust-Srednekanskaya HPP Vostochnaya CHPP

35.7 GW 35.9 GW 36.1 GW 36.9 GW

Zaramagskaya HPP-1 Sakhalinskaya GRES-2

2015 2016 2017 Zaramagskaya HPP-1 Ust'-Srednekanskaya Sakhalinskaya GRES-2 Vostochnaya CHPP Modernization 2018 HPP (1) CAPEX includes 18% VAT and excludes extra group outlays (Boguchanskaya HPP). The investment plan 2018, 2019-23 was reviewed by the Board of Directors on April 2, 2018. 23 Appendix Selected consolidated financial information

Consolidated income statement Year ended 31 March Consolidated statement of financial position As at 31 March RUB mn 2018 2017 RUB mn 2018 2017 Revenue 99,699 98,779 Government grants 10,398 4,580 ASSETS Other operating income 2,341 - Non-current assets Expenses (excl. impairment) (84,795) (78,869) Property, plant and equipment 803,702 799,855 Impairment (1,963) (1,846) Investments in associates and JVs 20,286 20,097 Operating profit 25,680 22,644 Available-for-sale financial assets 20,846 - Finance income 3,013 3,257 Finance costs (1,573) (2,139) Deferred income tax assets 8,934 9,354 Share of results of associates and JVs 346 175 Other non-current assets 25,494 25,331 Profit before income tax 27,286 23,937 Total non-current assets 879,262 873,132 Income tax expense (4,335) (5,131) Current assets Profit for the period 22,951 18,806 Cash and cash equivalents 56,437 70,156 Income tax receivable 4,112 3,839 Accounts receivable and prepayments 61,716 51,201 Consolidated statement of cash flows Year ended 31 March Inventories 22,617 25,523 RUB mn 2018 2017 Other current assets 17,313 4,400 CASH FLOWS FROM OPERATING ACTIVITIES: Total current assets 162,195 155,119 Profit before income tax 27,286 23,937 TOTAL ASSETS 1,041,457 1,028,251 D&A 6,624 5,683 EQUITY AND LIABILITIES Other adjustments (2,112) 331 Equity Operating cash flows 31,798 29,951 Share capital 426,289 426,289 Working capital and other changes (3,555) (6,505) Treasury shares (4,613) (4,613) (4,226) (3,460) Income tax paid Share premium 39,202 39,202 Net cash generated by operating activities 24,017 19,986 Retained earnings and other reserves 253,828 231,967 CASH FLOWS FROM INVESTING ACTIVITIES: Non-controlling interest 4,505 2,719 Purchase of property, plant and equipment (10,345) (10,496) Changes in bank deposits and other investments (13,927) (7,548) TOTAL EQUITY 719,211 695,564 Interest and dividends received 1,240 2,032 Non-current liabilities Other investing cash flows 775 4,276 Deferred income tax liabilities 41,788 41,695 Net cash used in investing activities (22,257) (11,736) Non-current debt 110,633 90,912 CASH FLOWS FROM FINANCING ACTIVITIES Non-deliverable forward contract 18,854 20,716 Proceeds from share issue - 40,000 Other non-current liabilities 28,207 28,116 Proceeds from sale of treasury shares - 15,000 Total non-current liabilities 199,482 181,439 Prepayment on forward contract (406) (275) Current liabilities 12,619 13,365 Proceeds from current debt Current debt 46,442 78,613 Proceeds from non-current debt 31,297 8,772 Accounts payable and accruals 57,700 55,625 Repayment of debt (54,601) (70,344) Current income tax payable 1,032 976 Interest paid (4,346) (4,492) Other taxes payable 17,590 16,034 Other financing cash flows (53) (93) Net cash generated by financing activities (15,490) 1,933 Total current liabilities 122,764 151,248 Effect of forex 11 (158) TOTAL LIABILITIES 332,246 332,687 Increase in cash and cash equivalents (13,719) 10,025 TOTAL EQUITY AND LIABILITIES 1,041,457 1,028,251

25 Tariff ‘smoothing’ in the Far East – implications for the region and RusHydro Group

The mechanism of ‘tariff smoothing’ aims to lower the economic burden for the industry and other commercial electricity consumers in developing Far Eastern regions, increase competitiveness of regional economies and promote investment in the Far East Основные положения 24 34,8 Chukotka . On Dec 8, 2015, the President of the Russian 2.6 Federation ordered to develop a mechanism aimed 5.8 2.6 at decreasing end-user electricity tariffs in the Far 3.2 East of Russia (except for tariff for households) to 2.2 Magadan region an average level of tariffs in Russia. 5.2 . RusHydro was selected as recipient of the Kamchatka surcharge. 14.5 . The mechanism sees RusHydro collecting 17.3 Total surcharge surcharge Total Yakutia (Sakha) additional revenue via capacity sales (KOM price) and transferring the proceeds in full to selected Far Eastern regions to offset losses incurred by Sakhalin subsidized power sales (see Appendix). 2.1 3.3 . In 2017, the mechanism came into effect 5 out 9 2017 2018 regions. . The base level of end-user tariff for 2017 was set at 10.98 RUB 4/kWh and total surcharge to RusHydro’s -57% -37% -14% -33% KOM price was set at RUB 24 bn, for 2018 set at 6.87 6.42 -9% 5.04 respectively Rub 4.3 and RUB 35 bn. RUB 4.3 4.7 /kWh

Chukotka Magadan region Kamchatka Yakutia (Sakha) Sakhalin

Tariff for beginning of 2017 2018 tariff

26 IR and disclosure calendar 2018

June 27 Annual General Meeting of Shareholders July 7 Dividend record date July 20 1H 2017 operating results July 30 1H 2017 RAS results August 29 2Q & 1H 2018 IFRS results & conference-call September 12-14 Renaissance Capital Investor Conference (Moscow) Sep-Oct * VTB Capital Investment Forum "Russia calling!" (Moscow) October * HSBC ESG Investor Symposium (London) October 22 9M 2017 operating results October 30 9M 2017 RAS results Oct-Nov * Capital Markets Day (Moscow) November 12-13 Goldman Sachs CEEMEA Conference (London) November * UBS Global Emerging Markets Conference (New-York) November 29 9M 2017 IFRS results & conference-call December * Moscow Exchange Forum (London)

* - to be confirmed 27 Thomson Reuters Extel 2014: . No.1 IR Team in Russian Utilities . Best IRO, Russian Utilities Thomson Reuters Extel 2013: . No.1 IR Team in Russian Utilities . Best CFO, mid-cap (Russia), #1 . Best IRO. mid-cap (Russia), #2 . Best overall IR, mid-cap (Russia), #3

Thomson Reuters Extel 2012: No.1 IR Team in Russian Utilities

Thomson Reuters Extel 2011: No.1 IR Team in Russian Utilities IR contact details tel.: +7 (495) 225 32 32 ext. 1607, 1319, 1304 [email protected]