Transelectrica SA

1. Transelectrica SA Two-tier-management company Transelectrica’s Strategy in line with European goals Romanian HydroPower Market Outlook and expected developments for 2014 Bucharest, Feb 2014

2. Romania at crossroads Between RGCE (ENTSO-E Continental Europe Regional Group) areas and non (or not yet) ENTSO-E areas (Moldova, Ukraine, Turkey) i Between different congestion management regions within ENTSO-E: - Central East Europe - South East Europe ii Between EU, and non-EU countries within ENTSO-E South-East Europe Regional Group (3rd EU legislative package not mandatory for all the members in the Regional Group) iii

3. Main challlenges faced by Transelectrica Transelectrica’s challenges facing alignment requirements with 2030 policy framework for climate and energy • Integrate renewable generation ( mainly wind) and new generation capacities • Development of interconnection capacity to avoid internal/regional congestion • Improving adequacy of the transmission grid (full compliance with ENTSO-E standards) High investment requirements

4. capex program OHL 400kV OHL 220kV OHL 400 kV operated at 220 kV Fossil Fuel PP Wind PP New lines (> 1000 km) Upgrade/ uprate Interconn. capacity increase First stage Second stage Power Flows High penetration of wind plants NPP Cernavoda new lines to strengthen the transmission capacity and interconnection capacity • facilitates the power exchanges in S-E Europe • ~400 km, 800 MW, 500 kV new facilities and technology change/updates consolidate the grid for all generation facilities in the area (renewables and nuclear)

5. Capex program Flagship projects (2014-2023) • Cross-border ≈Eur 500 mill • New interconnectorRO-RS (+1000 MW export) Eur 30 mill • Reinforcement of internal south-western route* to enhance cross-border interconnectivity (HU and RS) Eur 115 mill • New interconnectors RO-MD Eur 105 mill • New interconnector (undersea cable) RO-TR Eur 260 mill • *route linking Portile de Fier (RO-RS interconnection point) with Arad (RO-HU interconnection point) • RES integration and congestion relief • ≈Eur 265 mill • Connection OHL Isaccea-Varna and OHL Isaccea-Dobrudja in 400 kV Medgidia Sud subtation Eur 28 mill • OHL 400kV d.c. Cernavodă-Stâlpu and connection in Gura Ialomiţei Sbt Eur 50 mill • OHL 400 kV d.c. Gutinas-Smardan Eur 60 mill • OHL 400 kV s.c. Suceava-Gadalin Eur 95 mill • Upgrade to 400 kV of OHL 220 kV Brazi Vest- Teleajen-Stalpu Eur 5 mill • OHL 400 kV d.c. Medgidia Sud- Constanta Nord Eur 26 mill • Replacement & upgrade of existing aged network assets ≈Eur 350 mill Undersea Cable RO-TR

6. Cross-border interconnectivity Moldova (MD) • Cross-border interconnectors (Moldova): • OHL 400 kV Suceava (RO) – Balti (MD) • EUR 65 mill: OHL total funding • EUR 30 mill: OHL Romanian share • EUR 40 mill: additional amount for back-to-back in Blati substation • OHL 400 kV Straseni (MD) – Ungheni (MD) – Iasi (RO) • EUR 100 mill: OHL total funding • EUR 15 mill: OHL Romanian share • EUR 40 mill: additional amount for back-to-back in Ungheni substation • EUR 60 mill: additional amount for reinforcement of the Romania’s internal grid in the area • OHL 400 kV Vulcanesti (MD) – Isaccea (RO) • EUR 40 mill for back-to-back in Vulcanesti substation Balti MD Suceava Straseni Iasi Ungheni Vulcanesti Isaccea

7. Cross-border interconnectivity Serbia (RS) • Cross-border interconnector (Serbia): • OHL 400 kV interconnector between Romania and Serbia • Resita (RO) – Pancevo (SE) • EUR 30 mill: Romanian share in total funding requirement Arad Reinforcement of internal south-western route*to enhance cross-border interconnectivity (HU and RS)Eur 115 mill *route linking Portile de Fier (RO-RS interconnection point) with Arad (RO-HU interconnection point) Restita Portile de Fier RS Pancevo

8. Cross-border interconnectivity Turkey (TR) • Cross-border interconnector (Turkey): • HVDC 500 kV link between Romania and Turkey • EUR 520 mill: total project funding requirement • EUR 260: Romanian share Undersea Cable RO-TR TR

9. Backup slides

10. General EU Framework Romania’s priorities – in line with EU’s energy&climate goals Regulation (EU) No 347/2013 of The European Parliament and Council of April 17, 2013, on guidelines for trans-European energy infrastructure defines, up to 2020 and beyond, about 12 trans-European corridors and thematic areas of priority covering the electricity and gas grids and the transmission infrastructure of oil and CO2 as well: corridors : electricity – 4 + gas – 4 + oil – 1 and 3 thematic areas :Smart grids deployment, Electricity Highways, Cross-border CO2 network The communication from the Commission entitled “Energy infrastructure priorities for 2020 and beyond — A Blueprint for an integrated European energy network”, followed by the Council conclusions of 28 February 2011 and the European Parliament resolution, called for a new energy infrastructure policy to optimize network development at European level for the period up to 2020 and beyond, in order to allow the Union to meet its core energy policy objectives of competitiveness, sustainability and security of supply.

11. European energy infrastructure priorities Electricity, gas, and oil routes

12. ENTSO-E’s TYNDP Romanian projects included in EU’s 10-year Grid Masterplan

13. Projected power flow patterns Romania’s electricity transmission projects bring a positive contribution towards the enhancement of transmission capabilities of the European electricity backbone

14. contact C.N.T.E.E. TRANSELECTRICA S.A. Fiscal Code: 13328043 Registry of Commerce: J40/8060/2000 Address: ROMANIA, BUCURESTI, 2- 4 Olteni Street, District 3 Web site: www.transelectrica.ro e-mail: stefan.bucataru@transelectrica.ro Phone: +40 21-3035611 Fax: +40 21-3035610 President of the Executive Board (CEO): Stefan-Doru BUCATARU