JOINT STOCK COMPANY “ROSATOM ENERGY INTERNATIONAL”

ROSATOM:
Financing Opportunities and Challenges

Vyacheslav Ivanov

May 2016
Global Nuclear Technology Footprint

Fuel Power equipment NPP design, Electricity Services and

Uranium Uranium
fabrication manufacturing engineering generation modernization
production enrichment
and construction

JSC Rosatom Energy International - subsidiary of State Corporation ROSATOM – integrator and project developer of ROSATOM solutions in
Russian nuclear business abroad

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Tested Nuclear Technology – key reference factor for financing

Water-Water Power Reactor (VVER)

• One of the most reliable reactors in the world today
• One of the most referenced technology

Nuclear Icebreaker Fleet

• #1 nuclear fleet in the world
• Assures stable functioning of Northern Sea Route

Fast Reactors (Gen IV)

• #1 fast neutron reactor in the world
• #1 operating fast neutron reactor in the world

Small and Medium Size Reactors

• Variety of different designs with referent parameters

Floating Nuclear Power Plant and Desalination Solution

• FNPP solution - manufactured on a turnkey basis, unique, eco-friendly
• Desalination solution – variety of applications, referenced, proven safety

Nuclear medicine and Radiation technologies

• Nuclear medicine is a niche market based on the use of radioisotopes, mature for
diagnostic and emerging for therapy.

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 Russian nuclear technology – Water-Water Power Reactor (VVER)

Forefront of nuclear technology – Generation III+

reactor
Hanhikivi-1 project is based on VVER-1200 design
Proven and mature solutions – ≈1400 reactor years
of total operating time*
In Finland 2 VVER-440 units have been used safely in
Loviisa for decades
A high level of internal safety gained through
evolution of design
Most demanded capacity suitable for various grid
conditions – 1000-1200 MWe
60-year lifetime (+20-year extension possible)
High performing source of supply – availability factor ≈
92%
Meets all current Russian and international safety
standards and the IAEA requirements
Widely referenced by utilities

* According to WANO it is one of the most reliable reactors in the world today.

The content of this presentation is for discussion purposes only, shall not be considered as an offer and doesn’t lead to any obligations to Rosatom and its affiliated companies. Rosatom disclaims all responsibility for any and all mistakes, quality and
completeness of the information. 3
 ROSATOM VVER Technology
Nuclear Power Plants (NPP) Perspective pipeline

Great Britain 4 BOO* BOO*

Finland
Russia
Czech Republic 1 9
2 Belorussia
Slovakia 2 Kazakhstan
1 7 Armenia 2
Hungary Ukraine
2 1 2
4 Iran China
Turkey 2
BOO* 8
Egypt India Bangladesh
4 2 2 Vietnam
Jordan 12 2 BOO*
BOO(T)* Nigeria 2 Malaysia
2 Saudi Arabia 2
2 Indonesia
Brazil 2
4 BOO*

BOO*
South Africa
Argentina 8
1
43
25
24

In progress Tendering Potential

process/
negotiations

Rosatom NPP construction perspective pipeline – more than 90 units

*Countries of BOO(T) Projects- “built-own-operate (transfer)” projects where Rosatom Group owns equity vs. the rest EPC(M) project countries where it provides engineering procurement and construction (management) services .

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Our Approach to Financing New NPP Generation

Financing terms and structures for new NPP are unique and driven by:

Economic and credit Bilateral relationships

Selected business
metrics of host between host country and
model for NPP
country Russia

EPC contract + IGA BOO model might be put

financing (sovereign vs in place when economic
EPC Model BOO Model
loans and terms and conditions are
guarantees) is cost favorable. Such structures
effective and long- are multilayer, complex
term solution to and more expensive and
ensure new NPP usually not fully committed
generation built on at the beginning of the
time and budget. project (additional risk and
costs on the project).

Rosatom has successful track record arranging multibillion financing for Russia design NPPs (both EPC and
BOO models) new NPP generation across the world.

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Contracting and risk sharing

EPC BOO Various models are

possible :
Model Model
• Customer’s risk
appetite and
investment horizon
• Availability of
financing
• Host government
agreement and
guarantees
• Available tax
incentives

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Representative Financing Structure: EPC plus IGA Financing
Focus on Intra-Government Debt

Russian
Rosatom Family Host Country
Government

• IGA on cooperation in peaceful use

of nuclear energy
• Financial IGA for financing the
Project

70% debt of total

The Russian Vnesheconombank financing
Ministry (VEB) or other State bank
of Finance
EPC Contract /
State credit

 EPC contract implementation

Rosatom EPC Contractor  NFS contract
 O&M contract

Contracts 30% equity or

implementation sponsorship of
total financing
 Obtaining licenses and permits
Project company  NPP operation
 Decommissioning and waste disposal

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Representative Financing Structure: BOO plus Financing
Focus on project financing and international economics

Host Country
New Investors REIN
Consortium

equity ownership decided case by case

Project Company EPC contract

Construction site  Obtaining licenses and permits
Site Selection  Project management ROSATOM
Project warranties  Operation &
Fund raising
maintenance contract
Family
and permits
 Contract execution Companies
 Operation
Domestic Utility  Management
Power purchase Fuel supply contract
agreement (PPA)  Decommissioning and waste disposal

International and Russian ECAs,

Banks, Capital Markets

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Hanhikivi-1 Case. Project snapshot

• Project: construction of Hanhikivi 1 nuclear power plant on a greenfield site Pyhäjoki in Northern Finland, Baltic Sea
• Mankala structure: NPP will produce electricity which will be sold to the shareholders at cost (Finnish “Mankala model”)
• Shareholder base: majority shareholder is Voimaosakeytiö SF (“VSF”) which comprises some 47 Finnish corporates
(industrials and utilities). Rosatom also became shareholder in April 2014.
• Local support and government approval: In 2010, the Government of Finland and the Finnish parliament granted their
permit (Decision-in-Principle) to FV for the Project. The Project also benefits from strong and consistent local support
• Vendor and technology: Rosatom is the exclusive turn-key EPC contractor providing its AES-2006 / VVER nuclear reactor
technology (1,200MW). Its Leningrad 2 is the reference plant
• Timetable: It is currently planned that construction works will commence in 2018, and that the commercial operation date will
occur in 2024
• Project funding: project costs are to be funded 72.5% by debt financing and 27.5% by equity
• Competitiveness: Target Mankala price over 2024-2035 is expected to be highly competitive in Nord Pool.

Key project strengths Strong and balanced financing Proven and competitive Russian
structure technology

Established nuclear country with On-time and to-budget project

strong government support delivery secured by Rosatom role

Mankala structure providing optimal Strong EPC contract provides

risk diversification among protection to the project from delays
shareholders and open-ended full and cost overruns
recourse

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 Finland Sources of Funding

Equity financing: VSF (including its EUR ~ 1.7 billion NA

shareholders), REIN • Project’s economic
success highly
correlated with
Subordinated debt financing originated from
3% ~ CIRR+100
competitiveness of
EUR ~2.4 billion
NWF sources financing

Primary secured debt financing: various • Key economic rates

state-owned and commercial banks with EUR ~2.2 billion ~CIRR+200(*) have been favorable
ECAs coverage

• Rouble devaluation
Other EUR ~0.5 billion ~EURIBOR+300(*) contributed

2,50% 14,00% 80,00

13,00% 70,00
2,00% 12,00%
60,00
11,00%
1,50% 50,00
LIBOR 10,00%

1,00% EURIBOR 9,00% 40,00 CBR Rate

CIRR EUR 8,00% 30,00 USD-RUR

0,50% 7,00%
20,00
6,00%
0,00% 10,00
2010 2011 2012 2013 2014 2015 2016 5,00%

-0,50% 4,00% 0,00

2010 2011 2012 2013 2014 2015 2016

* Benchmark (target) terms

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Electricity supply-demand forecast for Finland

Finnish real yearly prices SKM, forecast € / MWh Domestic electricity balance (base case) TWh

70 120
SKM — forecast 102
57 96 93 95 95 98
60 FV Mankala 55 100 90
50 87
82
87 84 85 86 82 90
50 46 47 78 77 76
43 80 74
42 70 70 68
40 38 38 38 39 38
42 39 60
30
38 38 38
35
40
20
20
10

0 0
2015f 2020f 2025f 2030f 2035f 2007 2008 2009 2010 2011 2012 2015 2020 2025 2030 2035
High Central Low
Source: SKM (all except “Mankala price”), FV (“Mankala price” only) Source: SKM Production Consumption

Summary Financials, mln EUR

2 500 10 000
2 000 8 000
1 500 6 000
1 000 4 000
500 2 000
- -
(500) (2 000)
(1 000) (4 000)
(1 500) (6 000)
(2 000) (8 000)
(2 500) (10 000)
Cummulative FCFF, right scale Revenue, left scale Equity, left scale NWF funds, left scale Other commercial debt, left scale FCFF, left scale

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Hanhikivi-1. Preliminary project schedule

Phase 1 Phase 2 Phase 3 Phase 4

Preparation NPP construction Operation and Decommissioning
maintenance

2007 2010 Dec. 2013 July. 2017 Jan.2023 Mar.2023 Jan.2024 Dec.2025 2083

First criticality

Provisional Acceptance
FV Project EPC, SHA
company signed
Construction
established permit Commercial Operation

Decision-in- Decommissioning
Principal
Final work acceptance
granted to FV
NWF drawdowns

ECA
drawdowns

• June 2015 – application for construction license submitted

• January 2018 – first concrete
• January 2024 - Commercial Operations Date (COD)

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NPP in Jordan. Project snapshot

• Project: The Project envisages the construction of 2 nuclear power

plant units in the desert 72 km far from the As Samra Waste Treatment
plant
Nuclear energy in the region
• Model: ForJoint-Venture. The Project Company (PC) shall be
established for Project implementation and will be the Owner and
operator of the Plant Planned None

• Government approval: The Project benefits from strong and consistent Egypt Israel
political and state support
Saudi Arabia
• Vendor and technology: Rosatom is to be the exclusive turn-key EPC Syria
contractor providing its AES-92/VVER nuclear reactor technology (1000 Iraq
MW)
• Timetable: It is currently planned that engineering and designing works
will commence in 2017, and that the commercial operation date will
occur in 2025
• EPC contract price (estimation): ~10+ bn US dollars

Key project strengths

Sustainable cash flow and return on Proven and competitive Russian
investment technology

Jordan government guarantees Government support from both

Russia and Jordan

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NPP in Jordan. Preliminary contractual and shareholder structure

GK Rosatom JSC Rosatom Jordan Government Other investors

Energy International

25-50% stake 50+% stake Up to 25% stake

ownership ownership ownership

Construction site EPC contract

Jordan Project Company
Project warranties
and permits Operation and
 Obtaining licenses and permits maintenance
NEPCO
Power purchase  Project management contract
agreement (PPA)  Fund raising
 Contract execution
 Decommissioning and waste disposal
Purchase and sale of Fuel supply contract
Large consumers*
remaining power on
the market
Debt financing

Capital markets / Commercial banks

* In case of export opportunities

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 Electricity market in Jordan

Electricity consumption forecast 2014 – 2040* Cost of generation by source***

• Overall installed generating capacity in Jordan in 2012 was 3000 MW Source Current cost of
generation
• Expected annual electricity demand growth rate is around 6%
Gas 40-60 $/MWh
• Electricity demand forecast:
o to 2014 – 3 370 MW, Oil 170-190 $/MWh
o to 2020 – 4 782 MW,
Diesel 250-300 $/MWh
o to 2040 – more than 14 000 MW
Source Expected costs of
New electricity capacity commissioning 2014 -2030** generation
9000 Nuclear (from 2025) <100 $/MWh
7500
6000 Oil shale (from 2017) 90-110 $/MWh
4500
3000 Liquefied natural gas (from 2015) 100-120 $/MWh
MW

1500
0
Jordan imports more than 97% of energy,
Current installed capacity accounting for 20% of GDP.
Installed capacity, including commissioned units and imported capacity

Energy production by source* Nuclear energy will help to:

• Reduce the country's dependence on external fuel supplies
100%
80% • Increase the stability of the power system
60% • Reduce electricity tariffs and decrease Government subsidies (more than
40%
20%
1.8 billion U.S. dollars per year currently)
0%
2009 2010 2011 2012 2013

Gas Oil Diesel Electricity Import

* Worley Parsons Project Feasibility Study

** JSC Rosatom Energy International data
*** 2014 price level; Source: Jordan Atomic Energy Commission
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NPP in Jordan. Preliminary project schedule

Phase 1 Phase 2 Phase 3 Phase 4

Preparation NPP construction Operation and Decommissioning
maintenance

Oct. 2013 July 2014 May 2016 Dec.2017 2025 2027 2085

Unit 1

Unit 2
GK Rosatom Ratification
was elected of the IGA
NPP construction
as a preferred for the
documents package
supplier of the construction
signing (PPA, EPC
first NPP in and
Signing of contract, NFS Decommissioning
Jordan operation of
Project contract, SHA) of the first unit
NPP by the
Development Parliament
Agreement of Jordan

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Strong Relationships with Capital Providers
NPP Financing Considerations

Overview Key sources of funds(1)

• Rosatom maintains excellent
relationships with all major sources
of sovereign and institutional
financing, and is flexible in its
approach
• Russia’s sovereign funds, state-
owned banks
• Own shareholder financing including
bridge loan, straight debt, preferred
shares, straight equity subject to
satisfactory terms and conditions
• International export credit agencies
• National wealth funds, financial and
industrial institutions of host
countries, as well as those in the
region
• Partnerships with global and local
suppliers and providers

(1)
Russian State, Ministry of Finance, Ministry of Economic Development, National Wealth Fund (NWF), Export Insurance Agency of Russia (EXIAR), State Corporation Bank for Development and
Foreign Economic Affairs (VEB), Savings Bank of Russia (Sberbank), International Trade Bank (VTB), ECAs such as COFACE, EGAP, NEXI, ECGD and EKN

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THANK YOU FOR YOUR ATTENTION

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