SLOVAK ENERGY MARKET STAKEHOLDERS SIDE A SLOVAK ENERGY MARKET STAKEHOLDERS SIDE B Focus on energy sector infrastructure Focus on energy sector infrastructure According to the results of the analysis of the reporting document of the Ministry of Economy of the Slovak Republic “Results of monitoring of the security of electricity supply in 2019” (Správa o výsledkoch monitorovania bezpenosti dodávok elektriny za 2019), prepared in July 2020, it was found that in the medium term, the Slovak government expects to change the import character of the energy balance of the Slovak Republic to an export one (Figure). According to the document, the commissioning of Unit 3 of the Mochovce NPP will significantly reduce the current balance of imports. At the same time, it should be noted that the import nature of the energy balance of the Slovak Republic will change to export only after the commissioning of Unit 4 of the Mochovce NPP. It is expected that, given the significant increase in the share of nuclear power plants in the installed capacity, the existing mix of sources in total electricity production will be supported by the government’s energy policy over the next five years. At present, the share of carbon-free electricity production in the Slovak Republic is 73.9% (2019) of total consumption. In 2025, the share of carbon-free technologies in the expected electricity consumption in the Slovak Republic may reach 92%. In the period up to 2035, provided the commissioning of those production facilities that are already being created (NPPs, RES), achieving a balance between consumption and electricity production will not require the construction of new significant (from 50 MW) energy facilities. In these conditions, investors in the Slovak electricity market are mainly focused on the implementation of projects of local importance. These are installations for the production of electricity based on natural gas used for combined heat and power (PPC, Co-generation steam and gas Power Plant, in - KVET, Kombinovaná 15% Výroba elektrickej Energie a Tepla), and facilities, using waste from industrial 25% enterprises (woodworking industry) or agricultural facilities, which should improve the savings of electricity consumers by reducing part of the required heat. They will also 4% generate their own premium in the form of electricity, which they also consume. Due to the increased regulatory pressure in the field of efficient and environmentally 7% friendly waste treatment, it is possible to expect an increase in the installed capacity at waste incineration plants and treatment plants. Due to their rated installed capacity, these devices can be connected to distribution systems and thus will be located 5% closer to the places of final electricity consumption. The largest player in the electricity sector, which operates 4.1 TW of installed 11% capacity and covers up to 50% of the electricity supply market in Slovakia, is Slovenské elektrárne, a.s., (pie chart Electricity production & supply). The 33% company’s assets include such strategically important power generation facilities as Bohunice and Mochovce NPPs; hydropower plants important for the stable functioning of the Slovak power system of PVE Cierny Váh and PVE Liptovská Mara; large thermal power plants Elektrárne Nováky and Elektrárne Vojany. EP Slovakia B.V. (registered in the Netherlands) owns 66% of shares and management control over Slovenské elektrárne, which is part of the Czech energy holding Energetický a průmyslový holding a.s. (EPH). The remaining 34% of the ownership rights of Slovenské elektrárne, belong to the Slovak government through the Ministry of Economy of the Slovak Republic (Ministerstvo hospodárstva SR) (pie chart Energy sector Infrastructure Owners & Beneficiaries). EP Slovakia’s share of ownership in Slovenské elektrárne was acquired from Italian Produzione, S.p.A. in accordance with the agreement dated 18.12.2015 for a total amount of EUR 750 million and on 28.07.2016 was paid in first installment in the amount of 33%. Completion of the two-stage agreement and transfer to ownership of EP Slovakia B.V. of the remaining 33% of Slovenské elektrárne’s shares from ENEL were planned for later 2022 or in the case of obtaining a permit for the operation of Units 3 and 4 of the Mochovce NPP, for the construction of which the Italian company is responsible. Technical and operational characteristics of NPPs are given in the table:

The infrastructure of the energy sector of the Slovak Republic provides for the nuclear power plants (NPPs); 33% - hydropower plants (HPPs) and water storage production, cross-border flows and distribution of electricity (as well as heat) in the power plants (WSPPs); the share of thermal power plants that use different types of interests of the national economy and population; natural gas transit, gas fossil fuels reaches 26% (natural gas - 15%, coal - 7%, oil - 4%); renewable energy transmission to / from distribution networks and underground gas storage (UGS) sources (RES) - 11% (pie chart Installed Capacity). facilities, oil transit and production of oil products, operation of the coal industry. The important objects of the Slovak energy infrastructure to meet the The electricity production capacity installed in the Slovak Republic country's electricity needs are the AE Bohunice and AE Mochovce nuclear power reaches 7.7 TW (2019). Up to 25% of the installed power generation capacity is plants. SLOVAK ENERGY MARKET STAKEHOLDERS SIDE B Focus on energy sector infrastructure The commissioning of Units 3 and 4 of the Mochovce NPP is owner of the international investment and financial group PPF international energy company E. ON Beteiligungen GmbH; The main activity of Slovnaft, a.s. is oil refining. At the same expected in 2021 and 2023. At present, the construction of the Group N.V. In turn, Petr Kellner is close to the President of the 49% of the ownership rights in VSE belong to the German time, the company is engaged in storage of petroleum products, rd their distribution and trade. Slovnaft’s assets include a refinery 3 block is actually completed (the degree of project , Miloš Zeman. Daniel Křetínský, through energy company RWE AG; 49% of the ownership rights in SSE near Bratislava with a capacity of 5.5-6 million tons of crude oil implementation is 99.95%). In the first quarter of 2021, subsidiary business structures of EP Infrastructure, a.s. and EP belong to EP Infrastructure, a subsidiary of EPH energy holding per year and the largest network of gas stations in Slovakia, Slovenské elektrárne operator is awaiting permission from the Power , a. s. co-owns six of the ten largest companies in Daniel Křetínský. which covers up to 30% of the market. In terms of SR Nuclear Supervision Authority (Úrad jadrového dozoru SR) the energy sector of the Slovak Republic. EPH’s assets are A prominent player in the Slovak electricity market is modernization, the Slovnaft refinery is one of the three most to load fuel into the reactor and put the plant into operation. The located in all strategic sectors of the Slovak energy sector: in ČEZ Slovensko, s.r.o., which supplies electricity to up to 5% of modern European refineries. Up to 80% of produced motor fuel th particular in the production, distribution and sale of electricity; Slovak consumers and is owned by the Czech government- construction of the 4 block was carried out by 87.76%. transportation, distribution and storage of natural gas; controlled joint stock company ČEZ, a.s. (69.8% owned by the is exported, mainly to the markets of EU member states. To date, the cost of the project, which began in 2008 and was exploration of oil and gas fields, oil and gas production in state). Slovnaft belongs to the Hungarian energy holding MOL Plc., due to end in 2012-2013, has increased from EUR 2.7 to 6.2 Eastern Europe. The next strategically important component of Slovak whose most significant shareholders are the Hungarian billion, and the readiness of Mochovce 3, 4 has been repeatedly On December 22, 2020, Enel Produzione and EP Slovakia energy is the Slovak GTS operator Eustream, a.s. (pie chart government, owning 15%, the Hungarian state research postponed. Among the main reasons for the increase in time signed a new agreement amending the terms of the agreement TSO, Storage, Refinery, Mining). EPH subsidiary, EP institution Corvinus University of , owning 10%, the and cost of work should be noted: the need to make dated 18.12.2015 on the sale of ENEL’s share in Slovenské Infrastructure, owns 49% of the ownership and control of Omani company OmanOil, owning 7%, the Hungarian technological changes to the project safety parameters after the elektrárny. The new agreement foresees that Enel Produzione Eustream (the largest taxpayer in Slovakia). The rest of the commercial OTP Bank, owning 5%, the Dutch ING Bank, accident at NPP “Fukushima-1” in 2011; unsatisfactory quality will provide additional loans for the completion of Units 3 and 4 shares of the gas transportation company, are owned by the owning 5%. control works, which led to the need to process already built of the Mochovce NPP in the amount of EUR 570 million, and state through the Ministry of Economy of the Slovak Republic. In general, up to 55% of ownership of Slovak energy parts of the object; supply of components and materials that do the term of the agreement is extended until 2032. Thus, the The Slovak GTS is an important energy link between the infrastructure belongs to foreign companies and their not meet technical conditions of the project; negative attitude of Italian ENEL will remain a shareholder of Slovenské elektrárne Russian Federation and the European Union. beneficiaries, mainly coming from Czech, German and Austrian environmental activists and the government to the longer than planned, and the amount of unplanned investments The transport system owned by Eustream consists of several Hungarian jurisdictions. The total direct and indirect construction of new units of Slovak nuclear power plants. of the Italian company during the project period will increase to parallel pipes with a diameter of 1200/1400 mm, a maximum (through ownership rights) impact of foreign business on The main contractors for the construction of Units 3 and 4 of the EUR 1.4 billion. At the same time, EPH’s financial support of operating pressure of 7.35 MPa and a total length of 2332.056 the infrastructure of the energy sector of the Slovak Mochovce NPP were: Mochovce 3, 4 is expected to be only EUR 200 million and the km. Annual volumes of natural gas transportation differ from 55 Republic is estimated at up to 60% and covers such a) The Czech company Škoda Jaderné strojírenství, a.s. (Plzeň, company is avoiding responsibility for the progress of the (2015) to 65 (2019) billion cubic meters. companies as: Slovenské elektrárne, Eustream, Nafta, project. During the final settlement, the pre-agreed share price Pozagas, Stredoslovenská energetika. 15% Czech Republic), one of the major European participants in of EUR 750 million will be recalculated taking into account the In addition to the transit of natural gas, an important task of nuclear projects in the Czech Republic, Slovakia, , Eustream is to ensure the transmission of gas to / from State influence is mainly concentrated in the electricity 25% Bulgaria and . Since July 13, 2004, Škoda JS has market position of Slovenské elektrárne and its financial distribution sector, which performs the socially sensitive condition. distribution networks and underground gas storage facilities 4% been owned by the Russian government-controlled PJSC (UGS) in Slovakia. function of providing energy to consumers and receiving United Heavy Machinery Plants, Moscow (OMZ Group, 99% of Another problematic asset of Slovenské elektrárne, which payments. Thus, among the important companies of the Currently, the Slovak underground storage facilities with ownership of which belongs to CJSC Gazprombank). OMZ needs investment and management decisions, are the two Slovak energy infrastructure, which are predominantly 7% the capacity of 3 billion cubic meters of gas (neighboring Group is the main manufacturer of equipment for the nuclear largest coal-fired thermal power plants in Slovakia, Nováky and owned by the Slovak government (including management has a UGS of 2.9 billion cubic meters of gas) are concentrated power and petrochemical industries in Russia and implemented Vojani. According to the strategic documents of the Slovak control), there are Západoslovenská energetika, in the Vienna Basin in western Slovakia and are operated by 5% NPP construction projects in Eastern and Central Europe, Republic for the energy sector, the operation of facilities should Východoslovenská energetika, Stredoslovenská Nafta, a.s. and Pozagas, a.s. (pie chart TSO, Storage, Turkey, Iran, India, and China; be supported only until 2023. After 2023, as a part of the energetika. The only strategically important energy asset Refinery, Mining). b) CJSC “Atomstroyexport”, Moscow (Atomstroyexport JSC), government’s plan to close the coal industry, power plants are that is 100% owned by the government of the Slovak Nafta is the operator of 84% of the capacity of Slovak 11% which is part of the Russian state corporation “Rosatom” and expected to be replaced by equipment for heat production and Republic is the oil transportation company TRANSPETROL, underground storage facilities, engaged in oil and gas specializes in construction of nuclear power plants outside the supply in the interests of the region. whose infrastructure is gradually losing its value (which is 33% exploration, oil and gas production in Eastern Europe. Nafta Russian Federation; Ensuring the transformation of the country’s main coal mining used by no more than 50% of its capacity) and can directly through Czech Gas Holding Investment B.V. and also c) Italian company Enel Ingegneria & Innovazione, S.p.A., region, Horná Nitra, and the social adaptation of up to 3,000 potentially have a stable load only in the interests of employees of the industry’s largest enterprise, the Slovak joint- indirectly through SPP Infrastructure, a.s. (49% of ownership Slovnaft refinery. Slovak companies VUJE, a.s., ENSECO, a.s., PPA Control, a.s. rights + management rights are owned by EP Infrastructure) are stock company Hornonitrianske bane Prievidza a.s., HBP (pie Up to 35% of the energy infrastructure assets of the Slovak Taking into account the parties interested in supporting their 69% controlled by EPH Energy Holding and Daniel Křetínský, chart TSO, Storage, Refinery, Mining). The period of state Republic are directly owned by the state. In addition, up to own exporters, the main creditors of the investment project who is the Chairman of the Supervisory Board of Nafta. The support for the coal sector of the economy ends in 2023, and 10% of the ownership of important energy companies in the Slovenské elektrárne for the construction of Units 3 and 4 of the remaining 31% of Nafta shares through 51% owned by the Mochovce NPP were state credit and financial institutions of the the main measures for the transformation of the region are the Slovak Republic belongs to local private shareholders. implementation of a number of investment projects totaling EUR Ministry of Economy of the Slovak Republic in SPP Russian Federation, the Czech Republic and . In particular, Infrastructure belong to the state. currently the largest creditor of the Slovak energy company is 439 million. Currently, the main source of funding for the closure Figure. Forecast of electricity consumption and production in Slovakia of Slovakia’s coal industry is the use of EU aid funds. The first Pozagas operates 16% of Slovakia’s underground storage divided into types of generation for the period up to 2035 (according to the government-controlled PJSC “Sberbank”. Other major facilities and is 62% (through Nafta and SPP Infrastructure) government data) lenders are the Italian state exporting credit agency SACE stage of selection according to the methodology of the European Investment Bank was passed with 7 investment controlled by Daniel Křetínský’s EPH energy holding. The S.p.A. and the State Export Bank of the Czech Republic Česká remaining shares of the company through SPP Infrastructure exportní banka, a.s. projects of Slovak companies, three of which were proposed by HBP. Completion of all preparatory and permitting procedures is and the Ministry of Economy of the Slovak Republic remain the The increase in Slovenské elektrárne’s credit liabilities led to an planned by March 2021, after which funding is expected and the property of the state. accumulation of EUR 3.4 billion in debt (2020), with a value of projects will move to the stage of practical implementation. Oil companies TRANSPETROL, a.s. and Slovnaft, a.s. EUR 9.2 billion (2020) in the company’s tangible assets. As of Stable assets of Slovenské elektrárne include WSPPs PVE remain important assets of the energy sector of Slovakia (pie the end of 2020, the company’s net debt was 10 times EBITDA chart TSO, Storage, Refinery, Mining). (meaning that the company is theoretically able to repay its Cierny Váh and PVE Liptovská Mara, which are important for Slovak joint-stock company TRANSPETROL, a.s. is one of the debts within 10 years). This ratio of net debt to EBITDA is the smooth operation of the Slovak power system, as well as strategic enterprises of the Slovak economy and is 100% state- generally considered dangerous for creditors. If Slovenské the HPP VE Mikšová. owned. The company is the infrastructure operator of the elektrárne is declared insolvent, a group of major creditors, Other important players in the Slovak electricity sector (pie chart southern branch of the “Druzhba” main oil pipeline and provides primarily Russia’s Sberbank, will have its assets affected by Electricity production & supply) are the distribution transportation of Russian oil to Central European countries means of collateral. companies of the Western, Eastern and Central regions of Slovakia, respectively Západoslovenská energetika, a.s. (Slovakia, Hungary, the Czech Republic, Croatia) and oil The difficult financial situation of the strategically important storage in the Slovak Republic. The nominal capacity of the Cepconsult s.r.o. energy company is a concern to the Government of the Slovak (ZSE, 21% of the electricity supply market), Stredoslovenská energetika, a.s. (SSE, 14% of the market), Slovak part of the “Druzhba” pipeline allows to transport up to www.cepconsult.com Republic, which is interested in the successful completion of the 20 million tons of crude oil per year. +421 919 480 943 Mochovce NPP project completion and the commissioning of its Východoslovenská energetika, a.s. (VSE, 10% of the Over the last five years, the capacity of the Slovak oil pipeline Mliekarenska 8, 821 09 Bratislava, Units 3 and 4. At the same time, CEO and majority owner of market). The Slovak government, through the Ministry of has not exceeded 50%. According to the results of 2019, EPH energy holding, Czech oligarch Daniel Křetínský is trying Economy of the Slovak Republic (pie chart Energy Sector Slovak Republic TRANSPETROL pumped 8.9 million tons of oil, 56.6% of which to minimize its costs of financial support for Slovenské Infrastructure Owners & Beneficiaries), owns 51% of the was transported in the interests of the Slovnaft refinery. The elektrárne at the expense of the Italian ENEL. shares of regional grid operators. All texts, images and other information are subject to the law of the Slovak The remaining 49% of ownership rights in ZSE belong to the average daily volume of oil storage during 2019 was 2.7 million Republic 618/2003 'The Act on Copyright and Rights Related to Copyright (the Daniel Křetínský is closely connected by family relations and tons. Copyright Act)'. The use of texts, images and other information is possible only business interests with another Czech oligarch Petr Kellner, with the written consent of the company Cepconsult, s.r.o.