11

Operations breakdown

BUSINESS PROFILE

Transmission tariff blueprint

Scope of business operations

Romania

Regulated electricity transmission

Natural monopoly

TRANSELECTRICA

Generation Transmission Distribution End users

Regulated utility (regulated prices)

Pure network company - fully

unbundled from generation and sale of

electricity (not active on the market side)

Defensive business model

Stable and predictable cash-flow

General profile

Transelectrica SACompany under two-tier management system

Romanian Electricity Transmission Network Operator

We lead the power

Transmission Network Extension in the East of Europe

Bucharest, 21 October 2014

Carmen Neagu

Chairman of the Supervisory Board

22

Operations breakdown

BUSINESS PROFILE

Transmission tariff blueprint

Scope of business operations

Romania

Regulated electricity transmission

Natural monopoly

TRANSELECTRICA

Generation Transmission Distribution End users

Regulated utility (regulated prices)

Pure network company - fully

unbundled from generation and sale of

electricity (not active on the market side)

Defensive business model

Stable and predictable cash-flow

General profile

3

Ownership Structure

IPO

Strategic long-term governmental shareholding

• Strategic company holding a key position within a strategic economic sector

• Controlling equity interest to be closely held by the government

• No plans for further reduction of government’s equity share

No special powers retained by the Government in the company bylaws

Transelectrica shareholder structure evolution

since incorporation

76%

24%

2006IPO

Statul Român Alți acționari

59%

41%

2014Prezent

Statul Român Alți acționari

100

%

2000înființare

Statul Român

20002006

IPO 2014

State State Others State Others

4

Supervisory Board In office since May-2013 (appointed by shareholders)

7 seats, 4-years terms

4-year administration plan approved by shareholders (Sep 2013)

Executive Board In office since Sep-2013 (appointed by the Supervisory Board)

5 seats, 4-years terms

Two-tier management system in place as set by the corporate governance ordinance*

(Gov. Ordinance 109/2011 implementing corporate governance at state-owned companies)

• Transelectrica’s management: fully professionally appointed, based on EOG 109/2011.

• Recruitment was carried out by well-known independent executive search firm.

• Both Management Board and Supervisory Board are for 4 year mandates, and are remunerated based on

performance criteria (EBITDA, Total Shareholder Return, Total Investment and Network Downtime).

Corporate Governance

New management system

55

Highlights

Two-tier management. 4-years plan

Management strategy:

• to develop financial management performance at a high level of quality and professionalism;

• continuous improvement of operational management performance to enhance service quality

and increase safety in long-term functioning of the Romanian Energy System within a safe,

solid and innovative Company;

Focus areas:

• Investment: Capex ▲

• Funding sources: debt capital markets, international financial institutions

Expected results:

• Regulated Asset Base (RAB) ▲

• Cost efficiency: OPEX ▼

• Funding mix: diversified sources, predictable costs, extended maturity profile

i

ii

iii

4-year Management/Administration Plan

66

Significant investment volumes ahead

Leu 2.2 billion Capex in the next 4 years

Leu 0.55 billion average annual CapEx

Main investment focus:

Renewal of existing aged grid assets

40% of total planned Capex

4-year Management/Administration Plan

Expected results:

• OPEX ▼(cost efficiency due shift I Capex vs maintenance)

• Regulated Asset Base (RAB) ▲ (strong tariff driver)

• Cross-border volumes ▲(enhanced cross-border interconnectivity enables regional market

integration and fosters cross-border trading as Romania enjoys both extra generation capacity and

relatively lower energy prices)

source: Translectrica source: Translectrica

Capital Expenditure Plan

495 523575

622

2014 2015 2016 2017

Capex plan(Leu m)

34%

2%

23%1%

21%

3%

10%6%

Replacement and upgrade of existing grid

Reinforcement of exisitng grid to prevent futurecongestionsRES integration in Dobrogea

RES integration elsewhere (other regions)

Cross-border capacity increase

Dispatching central platform + Metering system

Protection of critical infrastructure

Other

Investment focus areas10-year grid development plan (2014-2023)

Percentage breakdown of total planned Capex

77

Romania: a nodal point in electric power interconnection

Between RGCE (ENTSO-E Regional Group Continental

Europe) and other zones (still outside) ENTSO-E

(Moldova, Ukraine, Turkey)i

Between different regions of congestions management

within ENTSO-E:

- Central East Europe

- South East Europe

ii

Between UE and non-UE countries within ENTSO-E –

Regional South Group – East European (Directive

72/2009 si Regulation 714/2009 – still not legally

implemented)

iii

Coupling Project of 4 Markets: 4M-MC

• The project performs the coupling by price of the Day Ahead

Markets from Czech-Slovakia-Hungary + Romania

• Members:

Transmission and System Operators from

CZ-SK-HU-RO (TSOs) & Power Exchanges (PXs)

and National Regulatory Authorities (NRAs)

• Observers: TSO & PX & NRA from Poland

Page 8

99

Transelectrica’s challenges facing alignment requirements with

2030 policy framework for climate and energy

Development of interconnection capacity to avoid internal/regional congestion

Improving adequacy of the transmission grid (full compliance with ENTSO-E

standards)

Modernization of SE zone Grid & OHL network for evacuation of electricity,

diminishing regional congestions, integrate renewable generation (mainly wind)

and new generation capacities (nuclear Cernavoda 3,4)

High/Heavy investment requirement

Investment challenge ahead 1/2

1010

VarnaDobrudja

TURKEY

Paşakoy

Tihau

Stuparei

IaşiMariselu

SERBIA

Stupina

Gadalin

Mintia

Retezat

Tariverde

Medgidia S

Isaccea

Munteni

Smardan

Constanta

Oradea

Suceava

CHEAP Tarnita Lapustesti

Centrale pe combustibili fosili

Centrale eoliene

Pancevo

LEA 400kV

LEA 220kV

LEA 400 kV utilizata la 220 kV

Rahman

Retehnologizare - prima perioada

Linii noi (> 1000 km)

Crestere capacitate

Fluxuri de putere

Volum mare de CEE

CNE Cernavoda

Cresterea capacitatii de interconexiune

Retehnologizare - a doua perioada

OHL 400kV Gadalin – Suceava, OHL 400 kV

Suceava – Balti, Iasi – Ungheni – Straseni,

OHL 400 kV Resita – Pancevo, internal south-

western route linking Portile de Fier with Arad

Investment highlights 2014-2017

Investment challenge ahead 2/2

Capital Expenditure Plan

Cross-border capacity increase & completion

of the 400kV ring

OHL 400 kV Cernavoda – Gura Ialomitei –

Stalpu – Brasov, OHL 400 kV Smardan –

Gutinas

RES integration & relief of associated

congestions

Integrated power-system dispatching platform,

enhanced metering system and remotely-

controlled equipment in substations

Further development of Transelectrica’s

dispatching capabilities

Modernization programme for substations:

400/110kV/MT Tulcea Vest, 110kV/220/MT

Campia Turzii, 400/110kV/MT Domnesti,

400/110kV Medgidia, 400kV Isaccea,

110kV/MT Suceava etc

Refurbishment and upgrade of existing grid

facilities

1111

11

HU

UA

RS

BG

MD

BG1

BG2

BG3

RS1

RS2

RO-RSCluster

RS1: New cross-border line between

Resita (RO) and Pancevo (RS)

Start: 2014

Completion: 2015/2016

RS2: 3-segment internal route

linking Portile de Fier (RO-RS

interconnection point) with Arad (RO-

HU interconnection point)

Start: 2014 (phase 1) 2018 (phase

2)

Completion: 2017 (phase 1) 2023

(phase 2)

RO-BGcluster

BG1: Internal line between

Cernavoda and Stalpu

Start: 2015

Completion: 2019

BG2: Internal line between

Gutinas and Smardan

Start: 2016

Completion: 2020

BG3: Internal line between

Gadalin and Suceava

Start: 2017

Completion: 2021

PCIs (Projects of Common Interest at EU level)

2 Capex clusters assigned PCI status by EC

PCI benefits

Fast permitting

Regulatory incentives (WACC

premium)

EU financial assistance*

*provided further additional criteria are met (PCI

status alone does not guarantee access to EU funds)

Capex plan: projects in EU’s top priority list

Incentivized Capex (return premium*) *conditions to be met for a WACC uplift are yet to be defined by the Regulator

1212

Ia

şi

SERBIA

TRANSBALKAN

CORRIDOR

Minti

a

Retez

atIsacce

a

Munteni

Smarda

n

Oradea

Suceava

CHEAP Tarnita Lapustesti

CENTRAL & WESTERN

EUROPE

TURKEY

New line/

Upgrade/ uprate

Power Flows

High

penetration of

wind plants

new lines to

strengthen the

transmission and

interconnection

capacity consolidate the grid for

all generation facilities in

the area (renewables

and nuclear)

- facilitates power

exchanges

- ~400 km, 800 MW,

500 kV

new lines &

network

upgrade

to strengthen

interconnection

capacity

Romanian Transmission Grid Map

1313

Investments of National Interest

Investment needs Romania 2014-2017

Other projects of national interest in

course of project preparation and

financing opportunities (partnership

schemes):

Increase of interconnection

capacity program with Republic of

Moldova

Undersea cable HVDC Romania

–Turkey

Connection to the Electricity

Transmission Network of CHEAP

Tarnita-Lapustesti - pumped

storage hydro power plant

The 400 kV ring of Bucharest

1414

TRANSELECTRICA S.A.

www.transelectrica.ro

Stock: ISIN ROTSELACNOR9, Bloomberg TEL RO, Reuters ROTEL.BX

Bond: ISIN ROTSELDBC013

Post: 2-4 Olteni, Bucharest 3, Romania

Carmen NEAGU

Chairman of the Supervisory Board

E-mail: carmen.neagu@transelectrica.ro

Phone: +40 213035611

Fax: +40 213035610

Contact

1515

THANK YOU!

www.transelectrica.ro