Renaissance Capital 22Nd Annual Russia Investor Conference April 10-11, 2018 Disclaimer

RusHydro Investor presentation Renaissance Capital 22nd Annual Russia Investor Conference April 10-11, 2018 Disclaimer

This document does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any securities of the Company in any jurisdiction, nor shall it or any part of it nor the fact of its presentation, communication or distribution form the basis of, or be relied on in connection with any contract or investment decision.

These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities act of 1933, as amended. Any public offer or distribution of securities to be made in the United States will be made in accordance with a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements. The Company has not registered and does not intend to register any portion of any offering in the United States or conduct a public offering of any securities in the United States. This presentation is only addressed to and directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) ("Qualified Investors"). In addition, in the United Kingdom, this presentation is being distributed only to, and is directed only at, (i) Qualified Investors who have professional experience in matters relating to investments who fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and Qualified Investors falling within Article 49(2)(a) to (d) of the Order, and (ii) Qualified Investors to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This presentation must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this presentation relates is available only to (i) in the United Kingdom, relevant persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, Qualified Investors, and will be engaged in only with such persons. The distribution of this presentation in other jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. No reliance may be placed for any purpose whatsoever on the information contained in this document or on assumptions made as to its completeness. No representation or warranty, express or implied, is given by the Company, its subsidiaries or any of their respective advisers, officers, employees or agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of this presentation or its contents. This document may include forward-looking statements. These forward-looking statements include matters that are not historical facts or statements and reflect the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, performance, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forwarding-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that the actual results of operations, financial condition and liquidity of the Company and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this document. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in future periods. The Company does not undertake any obligation to review or confirm expectations or estimates or to update any forward- looking statements to reflect events that occur or circumstances that arise after the date of this presentation. By attending this presentation, you agree to be bound by the foregoing limitations.

2 I. About the company & key highlights

II. Strategy through 2020 & forward contract with VTB

III. Operating & financial results

IV. Russian power market outlook Key figures and facts

Key figures 39.1 140 71 >60% 104 19.9 1.2x 61% GW TWh Of Russia’s RUB bn RUB bn Average EBITDA thousand installed hydro net debt/ margin of Installed electric Total output of FY2017 EBITDA Dividends for employees capacity controlled EBITDA(2) hydropower capacity of RusHydro Group in FY2016 paid in 2017 by RusHydro segment in RusHydro Group(1) 2017 (1) Group 2014-2017

Largest generating company in Russia and one of the largest publicly traded generating company with predominantly hydro assets in the world with installed capacity of 39.1 GW (1) (ca.16% of Russia’s total installed electric capacity)

A developing and successful dividend story: 7 consecutive years of increasing dividend payments since 2010; dividend payout in the amount of 50% of net profit in 2016-2017

Focus on the Russian market: implementation of new construction projects, extension of life-time and improving efficiency of existing assets

Diversified holding company with hydro and thermal generation assets, alternative renewables, transmission and distribution, retail, R&D and repair assets

One of the most liquid generating companies of the Russian stock market: local shares included in Level 1 list on MOEX, DRs listed on the LSE and trading on OTCQX in New York, included in MSCI Russia index.

Green utility – one of the world’s largest renewable energy players, a sustainable development leader in Russia

(1) Including 3 GW Boguchanskaya hydropower plant, 50/50 JV with UC RUSAL (2) Reflecting expected cancelation of guarantee of Boguchanskaya HPP loan by PJSC RusHydro 4 Geography of key assets - benefitting from high diversification

Far East European Russia Siberia(1) Key facts Electricity Heat 72(1) 35 >100,000 km 0,1 hydro power major fossil fuel plants of electricity grids 5,1 plants 14.6 10.2 13.5 18,147 5 GW GW GW Gcal/h 4 ~ 4,000 km 8,3 types of non-hydro retail companies of heating networks renewables 14,6 10,2 18 147

Hydro(2) Fossil fuel Non-hydro renewables

Hydropower

Hydropower u/construction

Non-hydro renewables

Fossil fuel plants

Electricity retail

3 4

5 1 6 400 Armenia 561 MW

2 997 2 671 2 467 2 010 1 467 1 403 1 370 1 330 1 200 1 020 1 000 900 720 552 520

Sayano- Boguchanskaya Volzhskaya Zhigulevskaya Bureyskaya Primorskaya Saratovskaya Cheboksarskaya Zeyskaya Zagorskaya Votkinskaya Chirkeyskaya Kolymskaya Khabarovskaya Kamskaya Nizhegorodskaya Shushenskaya HPP HPP HPP HPP TPP HPP HPP HPP PSP HPP HPP HPP TPP-3 HPP HPP HPP (1) Including 2,997MW (total capacity) of Boguchanskaya HPP (50% owned by RusHydro) (2) Including 1,200MW of pumped storage capacity 5 RusHydro: yesterday and today

2015 2017

38.7 (1) Installed electric capacity, GW 39.1 (1)

127 (1) Electricity generation, TWh 140.2 (1)

73 ~ 104 EBITDA, RUB bn/ EBITDA margin, % 20% ~27%

6 20(2) Dividend, RUB bn/ Dividend per share, kopecks 1.56 4.66(2)

197 Total debt, RUB bn / 190(3) 2.0x Net debt/EBITDA 1.2x(3)

-49% (4) 3-year total shareholder return (TSR) +45% (5)

(1) Including capacity of Boguchanskaya HPP, a 50/50 JV with UC RUSAL (2) Dividends paid in 2017 (3) Reflecting forward contract with VTB (4) For 2012-2014 (5) For 2015-2017 6 Key highlights and events of 2017

• Capital raise in the amount of RUB 55 bn from VTB Bank RAO ES subgroup debt  • Repayment of RUB 55 bn debt of Far Eastern subsidiaries • Reduction of net debt/EBITDA to 1.1x(1) as at the end of 2017

 • Record-high dividend in the amount of RUB 20 bn or 4.66 kopecks per share (up 20% to 2016) Dividend with payout of 50% of IFRS net profit – one of the best dividends among Russian utilities

 • Electricity output in FY2017 – 140.2 TWh(2) – a new historical record Operations • 42.5 MW hydropower capacity uprate due following modernization

 • Board of Directors approved RusHydro Group value growth plan through 2021, aimed at Strategy increase in the Company fundamental value and market capitalization and preparation of measures, aimed at introduction of long-term tariff regulation in the Far East Federal District

• Commissioning of Yakutskaya GRES-2 (193 MW/ 469 Gcal/h) – second of the 4 priority new  construction projects in the Far East Investment program • Completion of comprehensive restoration of Sayano-Shushensklaya and full commissioning of Boguchanskaya hydropower plants

• Successful entry into Eurobond market: RusHydro placed RUB 20 bn worth of 5-year RUB- Financial policy  denominated LPNs on the Irish Exchange • Cancellation of RusHydro’s guarantee of RUB 26 bn in respect of Boguchaskaya HPP loan(3).

Organizational  • Merging HQs of PJSC RusHydro and JSC RAO ES East development • JSC ESC RusHydro took over management of retail function of PJSC DEK in the Far East

(1) Reflecting cancellation of guarantee on Boguchanskaya HPP loan by PJSC RusHydro (came into effect in early 2018) (2) Includes production of Boguchanskaya HPP (50/50 JV with UC RUSAL) (3) Came into effect in early 2018 7 Implementation of key investment projects and commissioning of electric capacity in 2017-2018

2017  Commissioning of Yakutskaya TPP-2 (193 MW / 469 Gcal/h).  42.5 MW of installed hydro capacity added due to implementation of modernization program.

2018 • Commissioning of combined 744 MW of new electric capacity. • Increase of installed hydro capacity by 63 MW due to implementation of modernization program.

+63 MW 39.9 GW +120 MW +140 MW 39.1 GW +342 MW +142 MW 38.7 GW 38.9 GW

Ust-Srednekanskaya HPP Vostochnaya CHPP

36.9 GW 36.1 GW 35.7 GW 35.9 GW

Zaramagskaya HPP-1 Sakhalinskaya TPP-2

2015 2016 2017 Zaramagskaya HPP-1 Ust'-Srednekanskaya Sakhalinskaya GRES-2 Vostochnaya CHPP Modernization 2018 HPP

RusHydro Group Boguchanskaya HPP

8 RusHydro – one of sustainable development leaders in Russia

 In 2017, RusHydro shares were included FTSE4GOOD Emerging index. Russia is represented in the index by no more than 20 companies. Companies are evaluated using three sets of criteria, reflecting environmental, social and governance practices.

 RusHydro received the 1st place among Russian utilities and the 2nd place among all Russian companies, participating in RobecoSAM rating. The Company also was 31 of 64 utilities companies from around the world, researched by the agency. RobecoSAM sustainable development rating is based on 26 criteria.

 RusHydro improved its Carbon Disclosure Project (CDP) ranking. In 2017, RusHydro received “D” ranking, corresponding to median result among Russian companies- participants. СDP is evaluating greenhouse gases emissions by the companies and initiatives, aimed at emissions reduction. 45 Russian companies took part in the survey in 2017.

Vigeo Eiris for the first time included RusHydro in list of top-100 most advanced companies in the field of sustainable  development (Best Emerging Markets sustainability performance ranking). RusHydro is one of four Russian companies, and the only Russian utility, included in the ranking. The agency researched over 850 companies from 37 sectors and 31 emerging markets. In the March 2018 revision RusHydro improved its overall rating result by 13%.

RusHydro is consistently included in the top-20 largest low-carbon generating companies of the world according to EI  ranking. RusHydro is the 2nd among Russian companies, included in the ranking. Only three Russian companies are included in the Energy Intelligence ranking: Rosatom, RusHydro and Eurosibenergo. The agency estimates the share carbon-free generation of RysHydro’s overall installed capacity at 78%.

RusHydro is included in top-20 of RSPP “Responsibility and Transparency” Index (member of Global Initiative for  Sustainability Ratings – GISR).

Only two Russian utilities are represented in these indices developed by RSPP (Russian Union of Industrialists and Entrepreneurs).

9 Progress in achieving UN Sustainable Development Goals

In 2017 RusHydro identified 19 key sustainability development tasks to be implemented to accomplish the UN Sustainable Development Goals with the following progress made. Sustainable cities and communities Partnership for the goals  In February 2018 RusHydro was recognized as the winner In September 2017 RusHydro joined the UN of RSPP Sustainable Development contest in the Global Compact by sending the letter of nomination “For the social development of the regions of commitment addressed to the UN Secretary presence”. General in support of ten principles of the Global Corporate Compact with respect to human rights, labour, governance environment and anti-corruption. Life on Land  In June 2017, RusHydro signs the agreement with the Sustainable Institute for Environmental and Evolutional Problems to develop the Program for reintroduction of leopard development population in the North Ossetia Republic (Caucasus Peace, Justice and strong institutions region). Social policy Environment  In July 2017, RusHydro successfully completed “the  In May 2017, RusHydro confirms its adherence to the Bureyskiy compromise” program in connection with Anti-Corruption Charter, developed by RSPP (Russian construction of Bureyskaya HPP with creation of the Union of Industrialists and Entrepreneurs). Bureyskiy Natural Park for relocation of animals from  RSPP experts recognized RusHydro’s corruption the reservoir flood zone. prevention practice as one of the best among companies- participants of the Anti-Corruption Charter. Climate action; affordable and clean energy

Decent work and economic growth  In February 2018 RusHydro signed the memorandum of understanding with New Energy and Industrial Technology Development Organization (NEDO) and the government of the Sakha (Yakutia) Republic envisaging the construction of the  In November 2017 RusHydro management at a unique wind-diesel complex with the capacity of 3.9 MW in the polar village Tiksi. meeting with the head of utilities industry trade-  In March 2018, RusHydro organized the roundtable “Hydropower in the context of unions signed protocol with decisions, aimed at transition to sustainable and low-carbon development”. The event participants further joint effort, aimed at development of social analyzed the recent studies on carbon emissions from reservoirs in Russia and came partnership on the industry and regional levels. to the conclusion about their general carbon neutrality due to the GHG absorption factors of the Russian reservoirs.

10 Corporate governance

Key highlights Shareholder structure(1) Treasury . The Russian government directly owns 60.6% of RusHydro. Other shareholders A special Presidential decree stipulates minimum government's shares 0.9% ownership at 60.5% 25.0% . RusHydro’s shares are listed on the Moscow Exchange and on the London Stock Exchange in the form of ADRs (ticker - HYDR) VTB Bank Russian . The Board of Directors includes 13 reputable representatives 13.5% Federation and is headed by Mr. Yuri Trutnev – Deputy Prime Minister and 60.6% Authorised Representative of the President in the Far Eastern Federal District

Board of directors CEO Non-independent / Executive Directors Independent Directors(2)

Vyacheslav Kravchenko Sergey Shishin Deputy Minister of Energy Senior Vice-President, VTB Bank Pavel Grachev CEO of Polyus Nikolay Podguzov Andrei Shishkin General Director of Vice-President, Rosneft Sergei Ivanov Russian Post General Director of RT-Capital Artem Avetisyan Nikolai Shulginov Director of New Business at Agency Maxim Bystrov Yuri Trutnev Chairman of the Management Board of Strategic Initiatives for Promotion Chairman of the Management Nikolai Shulginov Chairman of the Board - General Director of RusHydro of New Projects Board, ATS, NP Market Council Chairman of the Deputy Prime Minister Management Board - and Authorised Alexei Chekunkov Nikolai Rogalev Vyacheslav Pivovarov General Director of Representative of the CEO of the Far East Development Head of the National Research CEO of Altera Capital RusHydro President in the Far Fund University “MEI” Works in the electricity Eastern Federal District sector since 1976

(1) As at 2 June 2017 (2) Independent Directors in accordance with the UK Corporate Governance Code 11 I. About the company & key highlights

II. Strategy through 2020 & forward contract with VTB

III. Operating & financial results

IV. Russian power market outlook Implementation of Taishet Aluminum Smelter (TaAS) project jointly with UC RUSAL(1)

Taishet aluminium smelter project parameters Annual aluminium output (‘000 tonnes) 428.5 Electricity/capacity consumption, TWh p.a. / MW 6.1 / 700 Construction of Taishet Aluminium Technology RА-400 Smelter in Irkutsk region began in Capex in 2005-2016 (not including VAT), USD mn 693 2007, but was suspended in 2008. Residual capex (not including VAT), USD mn 797 Initial project foresaw beginning of Full construction cost (not including VAT), USD mn 1,490 production in 2011. Requirement in project finance for construction completion, USD mn up to 1,040

Participation in the transaction Calculation of total effect for RusHydro from participation in TaAS* project, RUB bn Price of 50% share in the project: USD 319.5 mn

 Partial payment for TaAS share with a stake in Irkutsk Grid: USD 150 mn CAPEX increase + 0% +10% +15%  Partial payment for TaAS share from the cash flow of TaAS: USD 150 mn  Confirmation by RUSAL of interest-free deferral of payment for residual Integrated effect 7.6 5.7 4.8 share for the 3-year period after TaAS reaches project capacity : USD 19.5 * Scenario assumes RusHydro does not participate in construction of second phase of the project. Compensation of mn partial stake of USD 50 m from RUSAL is factored in. Risk of reduced project’s efficiency exists in the event of higher capacity price surge in Siberia.

• Synergy effect for RusHydro is expected from higher electricity prices on the back of increased energy consumption in Siberia. • Participation of RusHydro in the project does not assume any preferential conditions for supply of electricity between RusHydro and TaAS. • Implementation of TaAS project assumes refusal by both parties in the JV of joint completion of Boguchansky Aluminium Smelter to declared project capacity (construction of the third and fourth phases)

(1) RusHydro’s participation in TaAS project was approved by the BoD on April 3, 2018. Details are presented on Slide 14. 13 RusHydro’s participation in TaAS project - approved by the BoD on April 3, 2018

‼ Limit on RusHydro’s liability under sponsorship support in the context of raising project financing for implementation of TaAS project – not higher than 7.5% of the full cost of TaAS project completion (not more than USD 60 mn); ‼ Cost of RusHydro’s participation in TaAS project must not exceed USD 319.5 mn, to be confirmed by report of an independent appraiser, and is to be paid in the following order: • UC RUSAL accepts as partial payment for ownership stake in TaAS a 42.75% stake in JSC Irkutsk Grid Company (JSC IESC), owned by RusHydro, valued at USD 150 mn; • Interest-free deferred payment of the residual USD 19.5 mn for a period of not less than 3 years after the smelter reaches its project capacity; going forward interest is accrued at average weighted rate used in the project financing of TaAS project; • Payment of USD 150 mn via paying up by the JV of the amount owed to companies of UC RUSAL Group under loan agreement from the cash flow of the smelter after reaching design capacity; ‼ Absence of limitations on RusHydro’s right to divest the stake in the project; ‼ Application for tax benefits to the project; ‼ Provision by UC RUSAL of guarantees and obligations on funding of additional capex in case TaAS construction cost overrun; ‼ Confirmation of the decision that implementation of transaction of acquisition of a stake in the JV by RusHydro assumes refusal by both parties in the JV of joint completion of Boguchansky Aluminium Smelter to declared project capacity (construction of the third and fourth phases); ‼ Provision of report on project’s economic efficiency to the Board of Directors based on the results of sensitivity analysis; ‼ Joint implementation of mechanism for RusHydro’s exit from the project in the event does not reach full operational capacity before the agreed upon date.

14 Key factors of RusHydro Group value growth plan (1)

On October 27, 2017, the Board of Directors approved the value growth plan of RusHydro Group through 2021 and commissioned the Management Board to prepare necessary applications to the Government of the Russian Federation for organization of measures in support of the Plan, as well as draft regulations aimed at introduction of long-tem tariffs and return on investment principles.

Current market cap ↗ Increase in company transparency and improved corporate Decrease of market discount governance quality; ↗ Ensuring sustainably high and predictable dividend;

Base fundamental value ↗ Increased liquidity of local shares and depositary receipts, weight increase of RusHydro’s shares in key indices; ↗ Diversification of shareholder base; Operating efficiency and opex optimization 13.7 ↗ Increased profile for international financial audiences; ↗ Compliance with sustainable development criteria. Decrease of cost of production through modernization 0.8

Decrease in transmission and distribution losses 0.6

Increase in efficiency of electricity retail and 1.0 Changing tariff system in the Far East Federal accounts receivable management District with the view to establish long-term tariff regulation for operating facilities, Sale of non-core assets 0.5 providing economically justified tariffs, enabling return on invested capital, as well Other measures 1.3 as amending regulation in order to include lost income in the tariffs. Long-term tariffs in the Far East 17.5

Strategic deals and JVs 11.3

Target fundamental value

(1) Effects estimate as at 2017. (2) Measures, aimed at improved energy efficiency and optimization of subsidiaries’ activity. 15 Overview of forward contract with VTB

RUB 55 bn 1 No mandatory buy-back of shares from VTB Bank by RusHydro (“put)  55 bn shares RusHydro Dividends paid to VTB will be netted against quarterly interest payments  5-year non-deliverable forward contract Potential additional income for RusHydro in case of further sale of the stake at a price above RUB 55 bn  2 Option of early settlement before expiration of the 5-year term Cash*  RusHydro Review of the forward rate along inline with CBR key rate  Cash Shares Requirement of Gov’t approval of sale of VTB Bank stake to strategic * Direction of the settlement depends on investor  the sale price and is calculated as the difference between forward and sale Strategic The fair value of forward capitalized at initial recognition is not a subject to  prices investor (s) change

Significant volume of RusHydro’s potential liabilities will be covered 5.42% -0.82 p.p. by third party investors via sale of RusHydro’s shares and dividend Current effective Reduction of average rate forward rate of RusHydro Group debt paid to VTB portfolio due to the forward contract (1) The transaction creates strong long-term incentives for the management to maximize company value in the interest if all shareholders Funds raised via the forward contract transaction were used for 702 >RUB 6.7 repayment of external debt of RAO ES East Subgroup companies, RUB mn allowing to significantly reduce consolidated debt of RusHydro Group. Effect from reduced bn Primarily short term bank loans were paid back, improving duration of payments to the Bank due Expected effect from to reduction of the CBR’s reduced payments to the the overall debt portfolio key rate 2017 Bank due to reduction of the CBR’s key rate for 5 years(2)

(1) Not reflecting expected further reduction of the rate by the Central Bank (2) As of 23.03.2018 16 I. About the company & key highlights

II. Strategy through 2020 & deal with VTB

III. Operating & financial results

IV. Russian power market outlook RusHydro Group 4Q & FY 2017 operating results (1/2)

Efficient interaction with the System Operator and the Federal regulator of water resources in planning and management of HPPs regimes in 2017 allowed the Company’s to minimize sterile spills, at the same time providing for successful management of the spring snow-melt flood and later – summer rains-driven flood, with optimal heads and high capacity utilization rate

Electricity output of RusHydro Group, TWh

+9% +1% Historic record high of electricity output in 2017 is due to: 138.8 140.2 127.4  Total water inflow to reservoirs of the hydropower plants of the Volga-Kama 14.0 13.3 13.1 29.4 31.0 cascade significantly higher than long-run average; 31.7  Commissioning of Zelenchukskaya HPP-PSP and Yakutskaya GRES-2;  Growth of electricity generation by thermal power plants in the Far East on 82.5 95.4 96.0 the back of decrease in water inflows to the reservoirs of the hydropower plants;  Increased equipment efficiency due to integrated modernization program 2015 2016 2017 implementation.

Hydro, RES Fossil fuel Boguchanskaya HPP

Electricity output of RusHydro Group in 2016/17 Hydropower production trends 2015-18, GWh (1) quarter-on-quarter, TWh Hydro, RES 11 000 Fossil fuel 34.4 32.3 32.4 10 000 30.8 31.0 31.1 30.7 29.1 6.8 6.5 9 000 4.9 6.1 9.3 9.5 8.5 8.6 8 000

7 000

6 000 25.8 27.6 26.1 25.0 23.1 21.3 20.6 22.1 5 000

4 000 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 1Q'16 1Q'17 2Q'16 2Q'17 3Q'16 3Q'17 4Q'16 4Q'17 2015 2016 2017 2018

(1) See Appendix for hydropower production trends 2014-2018YTD. 18 RusHydro Group 4Q & FY 2017 operating results (2/2)

. Record operating results driven by rational utilization of increased water inflows to major reservoirs of the Volga-Kama cascade, modernization and commissioning of new power plants; . Total electricity generation by RusHydro’s HPPs of the Volga-Kama cascade has reached second highest result since its inception; . Electricity output by RusHydro Group’s electricity retail companies (excl. LLC ESC Bashkortostan divested in December 2016 ) in 4Q amounted to 5,781 GWh (-7.7%), in 2017 – 20,717 GWh (-5.5%); . In 2017, heat output by thermal plants of RAO ES East subgroup decreased by 5% to 29,924 thousand GCal as compared to same period of 2016; . Water inflow to the reservoirs of the hydropower plants of the Volga-Kama cascade in 1Q 2018 is expected to be higher than long-run average, to reservoirs of all other major hydropower plants of the Group it is expected to be close to the long-run average.

4Q’16/17 – European part of Russia and Siberia (price zones), GWh 4Q’16/17 – Far East (non-price and isolated zones), GWh

+10.5% -0.5%

6,782 Siberia 7,029 4,563 3,782 Hydro, geothermal 1,121 South CHP 1,386 Center 9,942 9,799 10,780 9,231

4Q 2016 4Q 2017 4Q 2016 4Q 2017

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

+3.1% -0.6%

Hydro 29,208 25,380 Siberia 15,904 14,484 6,826 8,239 South CHP and Center geothermal 31,672 32,824 39,372 46,985

2016 2017 2016 2017

19 4Q and FY 2017 financial results review(1)

Key highlights . Key growth factors: ↗ growth of capacity sales from newly commissioned Zelenchukskaya hybrid HPP; 380.9 104.0 27.3% ↗ 100% liberalization of capacity sales from hydro in Siberia to 100% as of May 1, +4.5% 2016; RUB bn RUB bn EBITDA margin manageable costs ↗ implementation of rigorous cost cutting in the Group; in 2017 increase in 2017 revenue EBITDA (vs. +5.6% in total cost) ↗ Solid operating results of hydropower in European Russia. in 2017 In 2017 (-2.7% or +5.4% on (+3.7% or +6.4% on . Negative factors affecting results: comparable basis) comparable basis) ↘ Non-cash impairments of PP&E, accounts receivable at al. ↘ Increase in electricity distribution expenses and fuel costs.

Revenue, bn RUB Operating expenses, bn RUB Operating revenue Government grants

391.3 380.9 361.4 380.9

112.5 112.1 106.0 112.1 374.1 348.1 344.2 348.1 315.7 303.8 287.7 303.8 105.4 99.5 99.0 99.5 88.8 87.6 82.7 87.6 4Q'16 4Q'17 FY'16 FY'17 4Q'16 4Q'17 FY'16 FY'17 4Q'16 4Q'17 FY'16 FY'17 4Q'16 4Q'17 FY'16 FY'17 (ex. ESCB) (ex. ESCB) (ex. ESCB) (ex. ESCB)

EBITDA, bn RUB Net profit, bn RUB EBITDA Net profit (reported) Net profit (adjusted) (2) EBITDA margin 28.9% 28.9% 64.4 62.7 62.8 62.7 27.3% 27.7% 27.3% 26.6% 27.1% 25.6% 22.9 21.8 22.6 21.8 39.8 22.5 38.2 22.5 29.9 32.4 100.3 104.0 29.4 32.4 97.8 104.0

4Q'16 4Q'17 FY'16 FY'17 4Q'16 4Q'17 FY'16 FY'17 4Q'16 4Q'17 FY'16 FY'17 4Q'16 4Q'17 FY'16 FY'17 (ex. ESCB) (ex. ESCB) (ex. ESCB) (ex. ESCB)

(1) Here and henceforth comparable data for 2016 excluding contribution of LLC ESC Bashkortostan, sold in the end of 2016, are based on management accounting and are given only for information (2) Net profit is adjusted for the effects of recognition of financial expense resulting from 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, financial result of disposal of subsidiaries as well as other one-off operating profits. 20 Potential of the Group’s operating expenses optimization and achieved effect in 2017

Areas of optimization Effect, RUB bn

1 Optimization of operating staff expenses 3 0.9

2 Optimization of repair and maintenance costs 2.5 1.1

RusHydro 3 Optimization of fuel costs 4.1 1.1 + RAO ES Eeast 4 Optimization of transportation costs 0.6 0.3

5 Optimization and development of centralized supply system 3.5 1.3

TOTAL 13.7 4.7

Targeted effect following cost audit 2017 effect

21 Potential of SG&A costs reduction and achieved effect in 2017

Areas of optimization Effect, RUB mn

PJSC • Smooth improvement of management standards to internal 66 40 RusHydro best practice in PJSC RusHydro

• Reduction of number of administrative and managerial staff in RusHydro’s branches to internal best practice 119 80

• Liquidation of representative offices in Moscow 44 27 • Partial transfer of administrative and managerial duties of RAO ES East branches to DEK, DGK, DRSK, optimization of branches’ Subgroup functions and decrease in the number of executive staff of DEK, DGK, DRSK 651 129 • Reduction of number of administrative and managerial staff in operating branches

206 50

• Integration of headquarters of PJSC RusHydro and PJSC RAO ES East with advanced management standards and optimization of 319(1) 960(1) RusHydro management levels (1) Group

TOTAL 1,405 1,286

Target effect, based on audit 2017 effect

(1) Originally the Audit was conducted under assumption of partial integration of HQs of RAO ES East and RusHydro. In 2017 decision was made on full integration of the HQs.

22 RusHydro Group debt profile (1)

Key highlights Debt repayment profile (2) (RUB bn) . Total financial debt as of Feb 28, 2018, amounted to RUB 190.0 bn . Net Debt/EBITDA = 1.2x . 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 188 bn and exceeds total repayment for the coming years 81(3) . In February 2018, guarantee obligation between PJSC RusHydro and Vnesheconombank on PJSC Boguchanskaya HPP was excluded (RUB 26 bn) 51.4 . In February 2018, RusHydro placed RUB 20 bn of 3-year loan participation 29.8 35.6 5.9 notes with a coupon rate of 7.4% 21.3 21.0 4.1 Current RusHydro Group’s credit ratings S&P Moody’s Fitch АКРА Cash & Mar-Dec 2019 2020 2021 2022 2023 2024-2041 BBB- (stable) Ba1 (positive) BB+ (stable) AAA(RU) (stable) Deposits 2018

Transparent debt composition (RUB bn) Transparent debt composition (RUB bn)

Other RAO ES East 9.2 Liability under the Subgroup forward contract with 40.5 VTB Bank Interest 98.4% – fixed rate 20.7 (4)

Currency 95% – ruble RUB 190 bn

PJSC RusHydro Sources 38% – state banks 49% – bonds 13% – 119.6 other

(1) As of February 28, 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 February 28, 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 20.7 bn as of December 31, 2017. 20 I. About the company & key highlights

II. Strategy through 2020 & forward contract with VTB

III. Focus on operating efficiency and optimization

IV. Russian power market outlook Changing tariff regulation in the energy sector of the Far East as a strategic development priority

RusHydro is developing a long-term “I would like to highlight that Capacity program of obsolete capacity Supply Agreement plan might encompass substitution and is preparing the energy system of the Russian Far proposals on stage-by-stage East” transition of the Far East energy Alexander Novak, Minister of Energy of Russia at a meeting sector to tariff regulation based on on development of power generation (hosted by V.Putin), return on invested capital November 14, 2017

“Development of the Far East should be accompanied by development of the energy sector infrastructure, otherwise this might become a hindering factor. Now, that the new Capacity Supply  Substitution of obsolete capacity by Agreement program is being discussed, I think it is construction of new generation and grid important that the Program includes the Russian the facilities. Far East.”  Improved reliability of energy supply in the Nikolay Shulginov, Chairman of the Management Board of RusHydro, at a meeting devoted to development of power Far East, improved safety of facilities and generation (hosted by V.Putin), November 14, 2017 lower accident rate in the energy sector if the region.  Higher company value due to Far East TPPs, operating over normative implementation of projects with guaranteed life span (by commissioning year) return. wear and tear of (1) Vladivostokskaya CHPP-1 1911 equipment of  Creating opportunities for efficient energy Mayskaya GRES 1935 projects reflecting competition between Artemovskaya CHPP 1936 > 70% energy facilities in investors. Arkagalinskaya TPP 1954 the Far East District

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 Electricity and capacity prices dynamics in Russia

Electricity end-user prices 2014-2021(1) Electricity spot (day-ahead market) prices 2014-2021(1)

CAGR 6.4% CAGR 2.8% 3,8 4,0 3,4 3,6 1415 3,0 3,2 1318 1373 2,7 2,8 1202 1216 1262 CAGR 1163 1153 3,7 CAGR 3,0 3,2 3,3 3,5 5.8% 2,4 2,6 2,8 4.7% 1016 1087 914 938 949 985 789 866

2014 2015 2016 2017 2018 2019 2020 2021 2014 2015 2016 2017 2018 2019 2020 2021

Residential electricity end-user price, RUB/kWh Electricity spot price, 1st price zone (Europe), RUB/MWh Non-residential electricity end-user price, RUB/kWh Electricity spot price, 2nd price zone (Siberia), RUB/MWh

Results of 2016, 2017-2019, 2020 capacity auctions

. In November 2015, System Operator held 3-year capacity auction results 2016 capacity auction (KOM) under new (4) rules; 2015 2016 2017 2018 2019 2020 2021 st . In December 2015, first 3-year capacity 1 price zone (Europe) 123,842 112,624 113,207 110,992 110,451 115,199 134,393 auction was held for 2017-2019; 2nd price zone (Siberia) 179,000 189,191 181,760 185,739 190,281 190,512 225,339 . for the first time auctions were held within all Russian power market 1st 3-year capacity auction of the price zones (previously – within smaller free-flow zones in 2 price zones); . KOM prices in 2017-2019 will be hiked to CPI of the preceding year 2015 2016 2017 2018 2019 2020 2021 2022

X+4 yrs

(1) AKRA estimates 27 Regulated market overview

Average electricity tariffs for RusHydro’s HPPs Key highlights RUB/MWh in pricing zones +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 Electricity and heat tariffs growth in the Far East in pricing zones ‘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% 130.4 DEK 7.4% 5.9% - - 124.8 127.5 116.4 Kamchatskenergo 12.1% 11.5% 8.6% 4.2% +11.0% YuESK -0.8% 6.1% 4.3% -8.0% Magadanenergo 14.4% 12.6% 4.3% 6.3% 42.8 42.9 46.0 47.5 Chukotenergo 11.4% 88.1%(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. 28 Appendix Hydrological situation and outlook 2017/2018

Water levels at key reservoirs in March 2017/2018

160% 149% 2017 2018 140% In 2017, the rivers of Central Russia saw volatile hydrology with 109% 120% 104% 101% 103% periodic rainfall floods leading to several peaks of inflows. Thanks to 100% 89% 88% 79% continued rainfall, the water inflows reached all-time high. Total water 80% 60% inflow on the Volga and Kama during the spring-summer period was 40% 228.0 km3 compared to normal level of 198.0 km3, while in the 4th 20% 0% 3 quarter of 2017 total inflow to reservoirs was 54.3 km (normal level – Volga-Kama Sayano-Shushenskoe Zeyskoe Chirkeyskoe 36.6 km3). cascade reservoir reservoir reservoir

In January-February 2018, total water inflows to the reservoirs on the Actual water inflow to the main reservoirs of HPPs in Jan – Feb 2018 Volga and Kama continues to be above normal. According to Hydrometeorology Center of Russia, the total water inflow in March is 250% 220% 2017 2018 200% expected to be in the range of 10.3–14.3 km³ (normal level – 8.4 km³), 136% 129% 124% 150% 114% 113% 124% in the first quarter – 37–43 km³ (normal level – 21.3 km³). 89% 100% In January-February 2018, electricity generation on Cheboksarskaya 50% HPP set an all-time record over the plant’s 37-year history. Water 0% inflow to the Cheboksarskoe reservoir over the January-February Volga-Kama Sayano-Shushenskoe Zeyskoe Chirkeyskoe cascade reservoir reservoir reservoir period was 23.1 km³, 10 km³ above the normal level. In 1Q’18, the water inflow in the North Caucasus is expected to be close to normal level. Current water reserves in the reservoirs of the Volga- Hydrological conditions in Siberia remain stable. Water inflow to the Kama cascade is 49% higher than the long-run average. Novosibirskoe and Sayano-Sushenskoe reservoirs is expected to be Reserves at RusHydro’s other reservoirs are close to the within normal level in March. normal level for the most part. In February, water inflow to the Zeyskoe and Kolymskoe reservoirs was Accumulated reserves are enough to guarantee the 20-60% above the normal level. Same situation is expected in March. necessary level of energy output of RusHydro’s HPPs

30 Mechanism of surcharge transfer for lowering end-users electricity tariffs in the Far East

RAO ES East Subgroup subsidies’ composition after 1 Payment of surcharge on wholesale power market ‘tariff smoothing‘

2 Transfer of proceeds to collector of surcharge on dedicated account on the 21-22 of each month

3 Transfer of accumulated proceeds within 3 business days to regional budgets

4 Transfer of subsidies to regional power suppliers

5 Supply of electricity/capacity under subsidized tariffs 2016 2017 2018

Subsidy via capacity surcharge from price zones of wholesale power market Government grants Operating revenues of RAO ES East Subgroup 1 Commercial operator of the Industrial consumers in 1st (Europe) and 2nd (Siberia) price zones wholesale market

2  No loss of revenue as a result of tariff decrease: full compensation via surcharge to KOM prices Regional budgets 3 PJSC RusHydro Potential improvement in accounts receivable management as  part of revenue collected from customers will be substituted with direct subsidies from regional budgets 4 ? Potential increase in surcharge to incentivize investment and provide ROI in the power sector of the Far East is now under 5 Regional power suppliers All groups of consumers discussion, but no decision has been made yet in the Far East

31 Operating expenses in FY 2017 (1) – delivering on OPEX efficiency

FY’2017 operating expenses Comparable FY’2017 operating expenses

OPEX FY'16 315.7 OPEX FY'16 (ex.ESCB) 287.7

Employee benefit expenses +2.6 Employee benefit expenses +3.3

Fuel costs +3.5 Fuel costs +3.5

Electricity distribution expenses -3.2 Electricity distribution expenses +5.4

Purchased electricity and capacity -16.9 Purchased electricity and capacity +0.6

Third party services -0.1 -3.8% Third party services +0.1 +4.5% +5.6% Total growth increase in Total growth Depreciation +0.9 of expenses Depreciation +1.4 manageable in groups of cash comparable costs expenses Taxes other than on income +0.4 Taxes other than on income +0.7

Other materials +1.1 Other materials +1.1

Water usage expenses +0.2 Water usage expenses +0.2

Other expenses -0.4 Other expenses -0.2

OPEX FY'17 303.8 OPEX FY'17 303.8

RusHydro Group cash costs in FY’2017 – segment analysis (RUB bn) (2) Comparable RusHydro Group cash costs in FY’2017 – segment analysis (RUB bn) (2)

+2.2 +9.0 -2.6 +3.1 +9.0 -2.6 +3.1 -25.6 +2.2 +1.8

291.4 +5.1% -4.8% 277.5 264.0 277.5

FY'16 PJSC RusHydro ESC RusHydro RAO ES East Other segments Misc & FY'17 FY'16 PJSC RusHydro ESC RusHydro RAO ES East Other segments Misc & FY'17 Subgroup Subgroup undistributed (excl. ESCB) Subgroup Subgroup undistributed operations operations

Consolidated income statement Year ended 31 December Consolidated statement As at 31 December RUB mn 2017 2016 2015 of financial position Revenue 348,119 374,072 347,512 RUB mn 2017 2016 2015 Government grants 32,745 17,250 14,314 Other operating income 690 12,422 8,230 ASSETS Expenses (excl. impairment) (303,805) (315,705) (315,103) Non-current assets Impairment (29,957) (40,500) (20,272) Property, plant and equipment 799,855 765,047 744,585 Operating profit 47,792 47,539 34,681 Investments in associates and JVs 20,097 20,278 14,142 Finance income 8,443 9,943 12,313 Available-for-sale financial assets 18,495 21,181 6,094 Finance costs (21,133) (9,041) (9,744) Deferred income tax assets 9,354 6,640 5,486 Share of results of associates and JVs 417 6,682 428 25,331 Profit before income tax 35,519 55,123 37,678 Other non-current assets 21,847 21,402 Income tax expense (13,068) (15,372) (10,519) Total non-current assets 873,132 834,993 791,709 Profit for the period 22,451 39,751 27,159 Current assets Cash and cash equivalents 70,156 67,354 48,025 Income tax receivable 3,839 889 1,396 51,201 Consolidated statement of cash flows Year ended 31 December Accounts receivable and prepayments 47,076 49,646 Inventories 25,523 24,037 23,999 RUB mn 2017 2016 2015 Other current assets 4,400 9,097 22,574 CASH FLOWS FROM OPERATING ACTIVITIES: Non-current assets held for sale - 788 Profit before income tax 35,519 55,123 37,678 Total current assets 155,119 148,453 146,428 D&A 25,023 24,130 22,477 TOTAL ASSETS 1,028,251 983,446 938,137 Other adjustments 43,014 20,291 11,480 EQUITY AND LIABILITIES Operating cash flows 103,556 99,544 71,635 Equity Working capital and other changes (9,491) (15,394) 6,114 Share capital 426,289 386,255 386,255 Income tax paid (15,940) (12,777) (7,949) Treasury shares (4,613) (22,578) (26,092) Net cash generated by operating activities 78,125 71,373 69,800 Share premium 39,202 39,202 39,202 CASH FLOWS FROM INVESTING ACTIVITIES: 231,967 Purchase of property, plant and equipment (71,693) (60,957) (79,238) Retained earnings and other reserves 243,790 203,114 Changes in bank deposits and other investments 3,591 15,484 19,028 Non-controlling interest 2,719 4,263 11,440 Interest and dividends received 7,848 7,094 8,953 TOTAL EQUITY 695,564 650,932 613,919 Other investing cash flows 241 13,461 2,876 Non-current liabilities Net cash used in investing activities (60,013) (24,918) (48,381) Deferred income tax liabilities 41,695 39,086 37,034 CASH FLOWS FROM FINANCING ACTIVITIES Non-current debt 90,912 158,046 135,179 Proceeds from share issue 40,000 33 - Non-deliverable forward contract 20,716 - - Proceeds from sale of treasury shares 15,000 - - Other non-current liabilities 28,116 18,726 14,551 Prepayment on forward contract (3,243) - - Total non-current liabilities 181,439 215,858 186,764 Proceeds from current debt 55,773 64,855 83,896 Current liabilities 63,499 71,829 36,487 Proceeds from non-current debt Current debt 78,613 41,757 62,214 Repayment of debt (149,976) (128,291) (102,851) Accounts payable and accruals 55,625 58,784 60,307 Interest paid (15,794) (20,271) (19,498) Current income tax payable 976 858 898 Dividends paid to shareholders of PJSC RusHydro (19,673) (14,228) (5,712) Other taxes payable 16,034 15,257 14,035 Other financing cash flows (650) (764) (906) 151,248 Net cash generated by financing activities (15,064) (26,837) (8,584) Total current liabilities 116,656 137,454 Effect of forex (246) (289) 796 TOTAL LIABILITIES 332,687 332,514 324,218 Increase in cash and cash equivalents 2,802 19,329 13,631 TOTAL EQUITY AND LIABILITIES 1,028,251 983,446 938,137

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