Inter RAO — Inter RAO Group strategy for the period up to 2025 with a view to 2030

Inter RAO is a diversified energy holding, a leader in the energy industry in the Russian Federation, providing the most efficient asset management.

Retaining and strengthening leadership in the Russian energy industry.
Ensuring leadership among Russian energy companies in terms of efficiency of energy asset management.
Assuring energy safety and promoting Russia's strategic interests.
Growth of shareholder value, including the implementation of projects for the efficient use of the accumulated investments.

Target indicator	Target value in 2025¹	Target value in 2030¹
Revenue²	> 1500 bln RUB	> 2200 bln RUB
EBITDA²	> 210 bln RUB	> 320 bln RUB
EBITDA margin²	≥ 13%	≥ 14%
Share of the Russian retail market	>18%	20%
Volume of foreign trade operations³	≥12.2 bln kWh	≥10.2 bln kWh
Cumulative total use of investment funds⁴	500 bln RUB	1000 bln RUB
Efficiency of current projects	> WACC
Dividend yield	25% of the net profit by IFRS

1

The figures are based on the operating assets of Inter RAO, unless indicated otherwise.

2

The figures are based on potential M&A deals and/or potential new construction projects.

3

Excluding the possible development of large-scale electricity exports to China.

4

Investments to the implementation of M&A projects, new construction projects, etc., in addition to the annual investment program of the Group

Company value

Ensuring the growth of company value:

Effective participation in modernization and construction programs for thermal power generation assets (cogeneration modernization, competitive selection of new generation capacity, selection of generation facility construction projects using innovative power equipment, other mechanisms);
Effective use of the accumulated investment funds with the expansion of the Group;
Ensuring the preservation/growth of the efficiency of the Group's assets.

Business digitalization

Digitization (optimization / transformation) of key business processes in the management of production assets and funds, energy sales, trading, offering new digital services, as well as increasing the level of information security.

Business diversification

Diversifying the Group's business in the mechanical engineering segment, retail and other promising areas, including consideration of the possibility to participate in the development of renewable energy.

Sustainable development

Increasing sustainability with methods such as improving position in the international ESG ratings and reducing carbon footprint.

Electric power generation

Ensuring reliable power supply and improving the operational, energy and environmental efficiency of the current system of generation assets;
Implementation of modernization (KOMMod) projects, participation in selections;
Participation in the additional selection of projects using innovative gas turbines;
Participation in the construction of facilities within integrated territory development, including isolated energy districts;
Development and promotion of proposals for improving the wholesale electricity and capacity market model;

Heat generation business

Ensuring the reliability and safety of the functioning of assets, increasing their operational and environmental efficiency.
Interaction with regional/municipal regulatory bodies and administrations for establishing fair tariffs and standards;
Implementation of modernization (KOMMod) projects, participation in selections;
Ensuring payment collection, working with accounts receivable.

Retail business

Digital transformation;
Ensuring payment collection, working with accounts receivable.
Implementing development projects for smart accounting systems.

Foreign trade

Maintaining the position as a unified export/import operator;
Maximizing profits from trading operations;
Examining the issue of maintaining the supply volume to the Baltic countries after 2025;
Examining the issue of ensuring export of electricity generated by power plants in the Kaliningrad region.

International operations

Effective management of assets abroad;
Promoting the interests of the Russian Federation abroad;;
Participation in the implementation of construction projects for generating facilities and other projects (BOT, EPCM, supply, acquisitions).

Main areas of Development

Power engineering

Implementation of the localization project for production and service of GE gas turbines in Russia;
Launching serial production of the GTD-110M turbine;
Initiation of proposals for changing industry regulations in order to increase the market size for the main power equipment.

Engineering, repair and maintenance services

Guaranteeing the implementation of the Group's investment projects;
Participation in projects to create energy infrastructure in non-pricing zones and isolated territories for the needs of high-potential consumers and energy districts;
Development of competencies and available services performed on our own, including maintenance work for gas turbines.

Digital transformation

Digitization of business processes in key areas (generation, sales, support for making executive decisions at the corporate center level);
Formation of new business models using digital technologies.

Business diversification and innovation

Implementation of innovative development program; participation in the development of priority areas of science and technology in Russia;
Examining the possibility and implementation of projects in the following segments: distributed generation, renewable energy (along with the support program 2.0) and other areas (demand management, electric transport, hydrogen energy, etc.)

Sustainable development (ESG)

Integration of mechanisms for analysis and assessment of climate risks;
Inventory control and reduction of greenhouse gas emissions;
Increasing ratings by improving the quality of public non-financial reporting and their compliance with global requirements.

Economic efficiency of ongoing investment projects for Inter RAO (IRR> WACC, payback period in accordance with the market norm).

Advanced synergy with existing/operated assets of Inter RAO, presence in various links of the value chain (fuel, trading, generation, distribution and sales) and a balanced generation structure according to various fuel types.

Providing investment attractive level of dividend payouts.

Using various interstate lending mechanisms to fund infrastructural projects.

Systematic approach
(securing a substantial market share or creating reserves for further business development).

Optimal debt ratio of Inter RAO through the implementation of investment projects on the principles of project financing, attracting funds both in Russian and international capital markets.

Using state support to implement projects that form part of the state policy.

Increasing requirements for minimizing risks and guarantees of return on invested capital as part of new investment projects during a recession and economic recovery.

Generation/thermal assets in Russia and abroad

Fuel assets in Russia

Generation assets operating on renewable energy sources in Russia

Supply assets in Russia, including participation in tenders for receiving the status of a last resort supplier or unified sales center/company

IT companies

Power plant engineering companies

Innovative digital platform solutions and services

Repair and maintenance companies in Russia

Engineering assets in Russia and abroad, including design and installation organizations

Innovative development companies (including research institutes / venture capital funds)

Smart accounting systems

Private equity funds investing in companies within core business

Other assets in high-potential areas