Eesti EnergiaInvestor Presentation

22 August 2012

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The presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or any member of its group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Any person considering the purchase of any securities of the Company must inform himself or herself independently before taking any investment decision. The presentation has been provided to you solely for your information and background and is subject to amendment. Further, the information in this presentation has been compiled based on information from a number of sources and reflects prevailing conditions as of its date, which are subject to change.

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This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

Disclaimer

2

Margus KaasikChief Financial Officer

E-mail: margus.kaasik@energia.ee

Phone: +372 715 2203

Veiko RäimHead of Investor Relations and Treasury

E-mail: veiko.raim@energia.eePhone: +372 715 2884Mobile: +372 5668 1568

Presenting Today

3

• Leading oil-shale-to-energy company, 100% owned by the Republic of Estonia

• Integrated utility operating on converging Nordic and Baltic power market with added value from unique shale oil business

• Total revenues and other operating income €858m, assets of €2bn and EBITDA of €265m in 2011

• 40% of revenues and EBIT from regulated activities in 2011

• Rated Baa1 / BBB+ from Moody's and S&P with stable outlook

• Reasonable leverage with long term maturity profile

Introducing Eesti Energia

4

• Preliminary reading of Q2 GDP growth at 2% y-o-y (0.4% q-o-q)

– Mainly IT and construction contributing to the expansion

– Growth nevertheless slower than in Q1 2012 (3.4% y-o-y)

• June exports increased by 7% in current prices (1H 2012 average 3%)

• Most recently credit ratings affirmed by Fitch (01 June 2012, A+, stable outlook) and Moody´s (30 July 2012, A1, stable outlook)

• Economic outlook dominated by moderate growth expectations, while unemployment expected to continue trending lower

2011 2012E

GDP change (%) 7.6 2.6*

Inflation change (%) 5.1 3.9*

Unemployment (%) 12.5 10.5*

Government surplus/ deficit as % of GDP 1.0 -1.5*

Government gross debt as % of GDP 6.0 n.a.

Current account balance / GDP (%) 3.2 -2.6*

Estonia's Export Partners June 2012

Sources: Statistics Estonia, Eurostat,* Forecast Source: Bank of Estonia

19%

16%

13%9%

5%4%

4%4%

14%

12%Sweden

Finland

Russia

Latvia

Lithuania

Germany

USA

Norway

Rest of EU

Rest of World

Source: Statistics Estonia

Update on Estonian Economy

5

• 350 MW Estlink 1 power cable between Estonia and Finland operational from 2007

• Nord Pool Spot power market established in Estonia in April 2010

• In 2011 prices in Estonia and Finland equal ca 50% of hours

• Integration to Nord Pool to be improved with 650 MW Estlink 2 cable (expected commissioning in 2014)

• 700MW Nordbalt cable between Lithuania and Sweden potentially commissioned by 2016

• Most recently NordPool Lithuania price area established on 18 June 2012

RUSSIA

FINLAND

SWEDEN

ESTONIA

Moscow

St. Petersburg

Murmansk

WHITESEA

BARENTSSEA

RUSSIA

NORWAY

LITHUANIA

LATVIA

DENMARK

BELARUS

UKRAINE

Gotland

Oland

Minsk

Riga

Stockholm

Oslo

Copenhagen

Goteborg

Stavanger

Kaliningrad

BALTICSEA

NORTHSEA

POLAND

Vilnius

GERMANY

NETHERLANDS

GULFOF BOTHNIA

Tallinn

Helsinki138

TWh

137TWh

26TWh

81TWh

Planned interconnectors Existing interconnectors Nordpool Spot member

Source: Eurelectric, data for 2009

Estonia is Part of

6

Quarterly Power Price and Spread dynamics

NordPool Estonia Price Higher than in Finland

• Average quarterly price in Nord Pool Estonian price area 34.6 €/MWh -23.3%), in the Finnish price area 32.4 €/MWh -37.7%)

• Hourly prices in Estonian and Finnish price areas equal 57.2% of the time in Q2 2012

• Estonian hourly prices higher than Finnish prices 38.8% in Q2 2012

• Despite reduced power prices, EE dark clean spread (excl. oil shale and CO2costs) was higher than in year 2011 (12.5 €/MWh, +22.9% y-o-y)

7

1 2 413 10 13 12

2013

36

48 5047 45 44

3843

35

-20

0

20

40

60

2Q

2010

3Q

2010

4Q

2010

1Q

2011

2Q

2011

3Q

2011

4Q

2011

1Q

2012

2Q

2012

€/MWh

Nord Pool Estonia price areaDark Clean SpreadSpread between Nord Pool Estonia and Hels inki

Revenues

43

132

95

0

30

60

90

120

150

Q2 2010 Q2 2011 Q2 2012

m€

-27.9%

Investments

69

26

47

0

20

40

60

80

Q2 2010 Q2 2011 Q2 2012

m€

+82.2%

EBIT

38 3742

0

10

20

30

40

50

Q2 2010 Q2 2011 Q2 2012

m€

+13.5%

Operating cash flow

Higher EBIT and Cash Flow in Q2 2012

170206 177

0

50

100

150

200

250

300

Q2 2010 Q2 2011 Q2 2012

m€

-14.1%

8

Revenues 14% below Q2´2011

Breakdown of Revenues Q2 2012Change of Group Revenues by Products

37

5650

5

6

1210 1

Electricity sales at regulated pricesElectricity sales at non-regulated pricesSales of network servicesSales of heatSales of oil shaleSales of liquid fuelsOther services and productsOther income

m€

9

177

+1 -9 +10 -3-27

140

150

160

170

180

190

200

210

220

Revenues Q22011

Electricitysales at

regulatedprices

Electricitysales at non-

regulatedprices

Sales ofnetworkservices

Sales of liquidfuels

Otherrevenues

Revenues Q22012

m€

206

Non-recurring revenue from sale of 11% stake in Jordanian subsidiary €16.2m

10

Free CO2 allowance and Higher Network Service Margins Behind Growing EBIT

Impact on Group’s profitability:

37 42+8

+7+3 +2 (4)

(3)(8)

0

10

20

30

40

50

60

70

EBIT

Q2 2011

Higher

profitability

of

Distribution

Network

Higher

profitability

of

electricity

sales

Lower

repair

expenses

Higher

renewable

energy

production

Higher

depreciation

Lower

oil

sales

profitability

Lower

impact

from

non-

recurring

items

EBIT

Q2 2012

m€

Investment Project

Capex up to 30 June

2012 (EUR million)

Expected Future Capex (EUR

million)Expected

completion Expected result

Distribution networks 2011-2014

78 222 2014 Reduced network losses, smart metering

Desulphurisation equipment in Narva Power Plant

105 12 2012 Compliance of existing 800 MW of (gross) installed capacity with lower SO2emission limits

Narva wind park 55 4 2012 New wind park with 39 MW capacity

Paldiski wind park

26 6 2012 New wind park with 22.5 MW capacity

Iru waste-to-energy plant

45 60 2013 New CHP plant with capacity of 17 MWe and 50 MWh

New CFB powerplant in Auvere

147 491 2016 New biomass / oil shale fired CFB power plant with 300 MW (gross) generating capacity

Investment Plan and Key Projects

11

Investment Plan and Key Projects (Cont’d)

Investment Project

Capex up to 30 June 2012 (EUR

million)

Expected Future Capex (EUR

million)

Expected Comple-

tion Expected Result

Enefit-280 oil plant

182 33 2012 Additional annual oil production capacity of up to 290,000 tons of shale oil, additional products up to 78 m3 of high calorific value retort gas and up to 307 GWh of electricity

Development of oil shale industry infrastucture

16 9 2012 Infrastructure development for potential oil industry expansion and new CFB power unit in Estonia

Predevelopment of liquid fuels industry in USA

33 37 Development up to 2016

Opportunity to invest in an oil project with planned capacity of producing50,000bbl of oil per day in the US

Predevelopment of liquid fuels and electricity industry in Jordan

7 23 Development up to 2016

Opportunity to invest in oil project (planned capacity of producing38,000bbl of oil per day) and power project (oil shale power plant with 500MW capacity) in Jordan

12

New Enefit280 Oil Plant

• Designed based on the process in existing oil plant with added features and increased capacity

• EPC agreement signed in July 2009

• Hot commissioning started on 26 July 2012

• Successful launch of the plant a prerequisite for potential further investments in oil sector

13

Long Term Funding by Bond Issue and Equity Injection

• Liquid assets 144 million euros at 30 June 2012

• Issue of 300 million euro 4.25% notes due in 2018 to finance capex program

• Equity injection of 150 million euros on 10 July 2012

• EUR 595m unused credit lines as of 30 June 2012

14

* (excl. Deposits and other financial assets)

Liquidity Comments

Net debt* / EBITDA**

1.0

1.6

2.1

0

1

2

3

Q2 2011 Q1 2012 Q2 2012

* Net debt = borrowings at nominal value – cash and cash equivalents (incl. deposits with maturities more than 3-months)

** EBITDA – rolling 12 months

12

+207

719

47-131

9

65

-80

-60

-40

-20

0

20

40

60

80

100

120

140

160

Liquidity31.03.2012

Operatingcash flows

Investmentcash flows*

Financingcash flows

Liquidity30.06.2012

m€

Other financial assets

Deposits with maturities of more than 3 months

Cash and cash equivalents

Outlook for FY2012

15

EBIT and EBITDA outlook

168265

050

100150200250300

2011 2012 2011 2012

EBIT EBITDA

m€

Revenue Outlook

• Revenue outlook changes:

� Lower electricity prices and related lower electricity sales

• EBIT and EBITDA outlook changes :

� Lower opex including CO2 costs

858

0

200

400

600

800

1 000

2011 2012

m€

Stable

Comment

GrowthGrowth

• Eesti Energia (Baa1/BBB+, both with stable outlook) is an integrated utility active in the converging Nordic and Baltic power market, 100% owned by the Republic of Estonia (A1/AA-(n)/A+)

• Approximately 40% of the Group’s revenues and EBIT from regulated activities in 2011, final step of power market deregulation in 2013

• Long term funding consisting of EUR 150m equity increase and EUR 300m new Eurobond completed in 2012ytd

• Comfortable liquidity position (EUR 740m) as of end Q2 2012

• 2H 2012 focus on the new Enefit280 oil factory commissioning

Summary

16

Eesti Energia Results in Q2´2012

Appendix 1

37 37

Revenues (m€)

1195 1222

Volume (GWh)

Q2 2011 Q2 2012

Electricity Market Full Opening in 2013

CommentsElectricity Sales at Regulated Prices

+2.3% +1.1%

• Average sales price in the regulated market 30.4 €/MWh (-1.1%)

• Upon joining the EU, Estonia agreed to open its electricity market to competition

– Estonian Parliament approved corresponding amendment to Electricity Market Act on 6 June

• Law enacts public supply conditions

– Distribution Network is obliged to supply consumers who have not chosen electricity supplier on average monthly NordPool Estonia spot price

18

1267

922

Volume (GWh)

Q2 2011 Q2 2012

65

56

Revenues (m€)

CommentsGroup Electricity Sales at Unregulated Prices

24% Retail Market Share in Baltics

• Retail sales 591 GWh (+87 GWh), with average Q2 open market shares 68% in Estonia, 20% in Latvia and 7% in Lithuania

– Largest y-o-y sales growth from Latvia to 184 GWh (+83 GWh, +82%)

• Sales on power exchanges and to wholesale buyers reduced to 331GWh (-432 GWh) due to low wholesale prices

• Average open market sales price 48.7 €/MWh (+3.0% y-o-y, excluding renewable energy subsidies)

• Renewable energy subsidies grew to 11.3 mln euros (+105.3%) due to increased generation

19

-27,2% -14,0%

1376 1414

Volume (GWh)

Q2 2011 Q2 2012

24% Increase in Distribution Revenues

CommentsSales of Network Services

• Average Q2 2012 network tariff of32.7 €/MWh (+18.5%)

• Q2 network losses were at 4.1% (-0.2 percentage points)

– 12-month average network losses at 5.8%

20

40

50

Revenues (m€)

+2,8% +24,4%

42

34

Sales volume (th tonnes)

Q2 2011 Q2 2012

16

12

Revenues (m€)

CommentsSales of Liquid Fuels

-19.6%

-21.9%

Lower Production Impacting Oil Sales

• Lower production volume decreased liquid fuels sales

• Average sales price 364 €/t(-3.0% y-o-y)

– Excluding price hedges average sales price 461 €/t (+9.0%)

– Average price of heavy fuel oil, the reference product, 517 €/t

• As at end of June 2012, 2H 2012 sales hedged against price risk amounted to 67.2 thousand tonnes with an average price of 451 €/t

21

74

45

96

5

4

6

3

16

Q2 2011 Q2 2012

m€

Sale of businessSales of electrical equipmentSales of repair and construction servicesSales of oil shaleSales of heatOther revenues

48

21

• Non-recurring revenue from the sale of 11% stake in Jordanian business and revaluation of remaining stake in Q2 2011 (-16.2 million euros)

• Sales of electrical equipment and repair and construction services decreased due to commissioning of new Enefit280 oil plant (-4.5 million euros)

• Reduction in telecommunication revenues (-2.9 million euros) due to sale of subsidiary in Q1 2012

• Reduction in sales of oil shale (-2.9million euros) due to lower miningvolume

CommentsOther Revenues

Decline in Non-recurring Revenues

-55.5%

22

Retail Profitability – Higher Electricity Sales Volume and Margin

� +1.0 million euros due to higher electricity sales

� +0.6 million euros due to higher electricity sales margin

� -1.1 million euros due to sale of telecommunication subsidiary

Impact on Retail division profitability:Retail Division

Q2 2011 Q2 2012

Q2 2011 Q2 2012

Electricity sales (GWh) 1725 1783

71

2

69

0

20

40

60

80

Revenue Opex EBIT

m€

74

1

73

0

20

40

60

80

Revenues Opex EBIT

m€

23

Distribution Network ROIC at 7.4%

Impact on Distribution Profitability:Distribution Network subsidiary

Q2 2011 Q2 2012

Q2 2011 Q2 2012

Electricity distributed (GWh) 1444 1477

Distribution network ROIC 4.9% 7.4%

� +6.7 million euros due to increase in network service margin

� +0.9 million euros due to increase in network service sales volume

� +0.9 million euros due tochanges of amortization period ofconnection fees

� +0.8 million euros due to lower network losses

� -0.7 million euros due to increase in depreciation

� -0.6 million euros due to increase in maintenance and fixed costs

52

15

37

0

10

20

30

40

50

60

Revenues Opex EBIT

m€

42

7

35

0

10

20

30

40

50

60

Revenues Opex EBIT

m€

24

100

20

80

0

30

60

90

120

Revenues Opex EBIT

m€

� +15.5 million euros due toincrease in electricity salesmargin

� +8.7 million euros due to lowerenvironmental provisions

� +4.4 million euros due to lower fixed costs

� +1.8 million euros due to higher renewable energy production

� -6.8 million euros due to decrease in electricity sales volume

� -3.1 million euros due to increasein depreciation

Impact on Generations Profitability:Electricity and Heat Generation Division

Q2 2011 Q2 2012

Electricity sales (GWh) 2527 2238

Electricity generation (GWh) 2316 2049

Electricity purchase (GWh) 213 192

Heat sales (GWh) 132 143

Q2 2011 Q2 2012

110

2

109

0

30

60

90

120

Revenues Opex EBIT

m€

Free CO2 allowances Boost Generation Division EBIT

25

� +3.0 million euros due to lower fixed costs

� –16.2 million euros non-recurring revenue from the sale of 11% stake in Jordanian subsidiary and revaluation of remaining stake in Q2 2011

� -3.6 million euros due to decline in the variable profit of oil shale mining

� -3.1 million euros due to decrease in oil profitability

Impact on Fuels (excl Mining) division:Fuels Division

Q2 2011 Q2 2012

Shale oil sales (th tonnes) 43 36

Q2 2011 Q2 2012

59

6

53

0

20

40

60

80

100

Revenues Opex EBIT

m€

Non-Recurring Revenues in Q2 2011 Weigh on Fuels Division

26

76

27

16

65

0

20

40

60

80

100

Revenues Opex EBIT

m€

92

€ 23 mln

€ 42 mln

€ 23 mln

€ 7 mln

Distrubution NetworkGenerationFuelsOther

Capex at €95m in Q2 2012

Major projectsCapex divisional breakdown Q2 2012

• Distribution networks 23 million euros

• Paldiski wind park 18 million euros

• New CFB power plant 14 million euros

• New Enefit280 shale oil plant 14 million euros

• Desulphurisation equipment in Narvapower plant 6 million euros

• Iru waste-to-energy plant 5 million euros

• Oil shale mining equipment 4 million euros

Capex€95m

27

Profit and Loss Statement

Q2 Change 6 months Change

million euros 2012 2011 % 2012 2011 %

Revenues 177.1 206.0 -14.0% 412.9 443.0 -6.8%

Expenses 134.8 168.7 -20.1% 314.2 361.6 -13.1%

EBITDA 69.7 60.7 14.9% 152.1 127.2 19.5%

Depreciation 27.4 23.3 17.2% 53.3 45.8 16.3%

EBIT 42.3 37.3 13.4% 98.8 81.4 21.3%

Net financial income /(-expenses) -0.8 -1.5 -46.5% -1.2 -3.2 -65.0%

Income tax on dividends 16.9 14.6 16.3% 16.9 14.6 16.2%

Net profit 24.6 21.2 15.7% 80.7 63.6 26.9%

28

Balance Sheetmillion euros 30 June 2012 30 June 2011

Changemillion euros

Total current assets incl. 335.6 296.4 39.2Cash and cash equivalents 70.6 87.3 -16.7Deposits with maturity of more than 3 months 65.0 55.0 10Trade receivables 77.2 99.8 -22.6Inventories 55.8 34.7 21.1Other 66.9 19.6 47.3

Total non-current assets 1939.7 1525.8 413.9Total assets 2275.3 1822.2 453.1

Total liabilities, incl. 1017.6 684.3 333.3Trade payables 54.4 125.5 -71.1Other 195.4 134.3 61.1Borrowings 732.5 357.4 375.1Current liabilities 1.4 26.8 -25.4Long-term liabilities 731.1 330.6 400.5

Provisions 35.3 67.1 -31.8Equity 1257.7 1137.9 119.8Total liabilities and equity 2275.3 1822.2 453.1

29

Cash flow statementQ2 Change 6 months Change

million euros 2012 2011 % 2012 2011 %

Net cash from operating activities 47.0 25.9 81.7% 106.0 130.8 -18.9%

Purchase of fixed assets 120.7 117.3 2.9% 266.1 189.2 40.7%

Net change in deposits with maturities greater than 3 months -65.0 143.0 -145.5% -65 126.4 -151.4%

Received long-term bank loans 0.0 1.3 -100.0% 26.3 1.5 1701.1%

Repayment of bank loans 25.0 1.1 2235.8% 25.7 1.9 1230.0%

Dividend payment 65.2 56.1 56.1% 65.2 56.1 16.3%

Other adjustments 287.8 17.3 1563.7% 319.6 21.7 1372.1%

Net cash flows 58.8 13.0 351.7% 29.8 33.2 -10.2%

30

Detailed Business Overview

Appendix 2

Distribution

� Improvement of the distribution network� €300m investment plan for 2011-14 regulatory period

on the back of 7.83% WACC on RAB� Reduction of network losses and provision of reliable

service to clients

Power Generation and Supply

� Refurbishment of existing generation portfolio to maintain compliance with more stringent regulation

� Investment into new generation capacity with lower CO2 footprint

� Maintaining significant market share in Baltic retail market to hedge generation portfolio

Shale Oil

� Expansion of shale oil production in Estonia with Enefit 280 plant expected operational in 2012

� Exploring shale oil upgrading into lighter products� Exploiting shale oil production expertise and proprietary

technology internationally

Eesti Energia Business Strategy

32

10.4 TWh of powergenerated in 2011

6.2 TWh of power distributed to clients in 2011

18m tonnesof oil shalesold in 2011

164 thousand tonnesof shale oil sold to clients in 2011

10.7 TWh ofpower sold in 2011

Deregulated Retail Sales in Baltics

Unregulated

Regulated

Shale Oil Production

Power Sales

Shale Oil Sales

Oil Shale Mining

Power and Heat Generation

14.3

1.6 2.1

Power Oil Externalclients

0

5

10

15

20

5.5

2.0

3.2

Regulated Retailderegulated

Wholesalederegulated

0

2

4

6

89.9

0.4 0.1

Oil shale Renewable Gas0

2

4

6

8

10

12

Distribution networkRegulated Power Sales in Estonia

Power Sales on Nord Pool Spot

Eesti Energia Business Model in Brief

33

Power GenerationMining Distribution1 2� Group holds licenses for

559m tons of geological oil shale as of 31 December 2011 (ca 465m tonnes of saleable oil shale)

� Annual mining limit of 15m tonnes of geologic oil shale (ca 17.8m tonnes of saleable oil shale)

� Regulated price of oil shale €10.5 / tonne in 2011

� Oil shale pricing regulation expected to be revised after full retail power market deregulation in 2013

� Price of power generated in Narva Power Plants for Estonian regulated retail market is set by Estonian Competition Authority (“ECA“)

� The last approval came into force from October 2009 when the price limit was confirmed at 29.4 €/MWh

� Regulation expected to end alongside retail market deregulation at the beginning of 2013

� Distribution of electricity is fully regulated by the ECA

� Allowed return regulated to equal WACC earned onRegulatory Asset Base (RAB)

� Current WACC 7.83%, RAB €559m

� Current 3-year regulatory period August 2011 – 2014

� Main driver for business is general economic environment and power consumption growth in Estonia

Regulated Supply3� Average price of

electricity on the regulated retail market was 30.8 €/MWh during 2011

� Estonian retail market to be fully deregulated at the beginning of 2013

Oil Shale Mining

Distribution network

Power and Heat Generation

Power Sales

Regulated Power Sales in Estonia

1

4

3

2

4

Regulated Business Drivers

34

Deregulated Retail Sales in Baltics

Mining

Shale Oil Sales

Power and Heat Generation

Shale Oil Production

Power Sales

Power Sales on Nord Pool Spot

5

6

7

5

Power Sales on Nord Pool Spot5

-20.0-10.0

0.010.020.030.040.050.060.070.080.0

Jan-

11F

eb-1

1M

ar-1

1

Apr

-11

May

-11

Jun-

11Ju

l-11

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12

Feb

-12

Mar

-12

Nord Pool Estonia EE Dark Clean Spread

€ / MWh

Shale Oil Sales

0

20

40

60

80

100

120

140

0

100

200

300

400

500

600

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12

$/bbl€/t

Fuel oil 1% ARA (€/t)

Brent crude oil ($/barrel)

2011 Open Retail Market Sales in Baltics6

72%

15%7%

0%

20%

40%

60%

80%

100%

0

1 000

2 000

3 000

4 000

5 000

Estonia Latvia Lithuania

Eesti Energia sales Other sales

EE market share

Source: Reuters, Eesti Energia Source: Reuters,

7

Unregulated Business Drivers

35

Overview Regulation

� Mining licence provides exclusive right to mine oil shale within defined area

� Exception to the auction process for new licences applied to companies with reserves depleting within five years

� Price limit on sales to generation plants with capacity in excess of 500MW approved by ECA

� Under the current regulation, the approved weighted average price of oil shale is €10.55/tonne

� Regulation expected to be revised or ended after full electricity market opening in 2013

Eesti Energia Mining Operation

Mine TypeGeological oil shale resource

(mt) 31/12/2011Saleable oil shale sales

in 2011 (mt) (1)

Estonia Underground 230.6 7.0

Viru Underground 7.7 2.2

Narva Open-pit 104.8 5.6

Aidu Open-pit 2.7 2.7

Uus Kiviõli Underground 207.8 (2) –

Tammiku Opencast 5.6

Total 559.2 17.5 (3)

(1) Saleable oil shale – i.e. includes limestone

(2) Uus-Kiviõli license issued in October 2011(3) Does not include: (a) change in inventory; or (b) sales, of oil shale where such oil shale has been purchased from mines outside the Group.

Source: Company information

Mining — Business Overview

36

� Process fines – all mined oil shale can be processed� Energy self sufficient� No water required for processing� Retort gas can be used as fuel for power generation

and as a source for hydrogen production that can be used in shale oil upgrader

Overview Benefits of Enefit Technology

� The Narva oil plant currently has two Enefit 140 units, each of which has the installed capacity to process 140 tons of oil shale per hour

� The plants were commissioned in 1980, but to date, 80% of the plant’s equipment has been replaced and improved by Eesti Energia’s engineers

� The shale oil produced comprises three fractions:– shale heavy fuel oil (78% by mass)– shale gasoline (18-20% by mass)– shale light fuel oil (2-4% by mass)

� Shale heavy fuel oil can be sold as standalone product; other products are blend of the three fractions and sold by Eesti Energia at a similar price

� The key customer segments are bunkering and heating sectors

� The Narva oil plant also produced approximately 58m m3 of retort gas1 in 2011 that was used for electricity generation in the Narva Power Plants

� New Enefit280 unit expected to be commissioned in 2012

(1) Calorific value 46 MJ/Nm3

Narva Oil Plant — Enefit 140 Units

Shale Oil — Business Overview

37

Existing Generation Portfolio (as at 31 December 20 11)

Plant Net MW e

Electricity generated

(GWh, 2011) Net MW h

Heat generated (GWh, 2011) Built Fuel

Eesti pulverisedCFB

1,187

1945,6831,440

84

–

97–

1963-73

2005Oil ShaleOil Shale, biomass

Baltipulverised*CFB

Gas boiler house

462

192

–

1,7931,278

–

–160

240

–43418

1956-66

2005

2005

Oil Shale

Oil Shale

Gas

Iru (CHP) 156 129 764 593 1980-82 Gas

Aulepa 48 90 – – 2009 Wind

Other 5 13 62 41 n/a Renewables / Diesel

Total 2,244 10,426 1,310 1,183

*The pulverised blocks in the Balti power station will be put in reserve from 31 March 2012 due to new restrictions on SO2 emissions from 2012.

Source: Company information

Generation — Business Overview

38

Overview Map of Operations

� The Group is the largest distributor of electricity in Estonia, having distributed around 6.2 TWh of power in 2011

� Distribution area covers ca 42,400 km2, which contains c. 92% of Estonia’s population

� The network operates over 60,000 km of overhead and underground cables

� RAB (as at 31 December 2011): €559m� Number of connections: ca 655,000� Allowed pre-tax return WACC 7.83% from

1 August 2011

Distribution — Business Overview

39

Regulatory Framework Regulatory Building Blocks

� Regulated Asset Base (RAB), calculated at book value

– RAB1 is calculated as RAB0 plus capex less regulatory depreciation

� Allowed pre-tax return (WACC)– applied on RAB plus expected working capital

requirement (ca.5% of the expected revenue)� Regulatory depreciation of average 35 years (with

some exceptions) — different from actual accounting depreciation

� Allowed operating costs of the company are subject to annual cost escalation by CPI-1.5%, agreed with ECA for 2012-14

� Regulation is in place from 2005

CAPEX

RAB

Return oncapital

Return ofcapital

OPEX

DepreciationAllowed

pre-tax return

Allowed Revenue

Distribution — Regulatory Overview

40

Domestic Market International Markets

� Eesti Energia is dominant player in the domestic market

� The Group operates out of 14 customer service offices in Estonia and relies heavily on electronic channels (internet, call centre)

� Regulated supply margin is 1.3 EUR/MWh� Estonian regulated electricity market to liberalise

fully in 2013� 24% Baltic retail market share in Q2 2012

Latvia � Operates through 100%-owned subsidiary SIA

Enefit� Started business in 2008.Lithuania� Operates through 100%-owned subsidiary UAB

Enefit� Started active business in 2010

Market Shares in Estonian Market (Q2 2012) Market Shares in Baltic Markets (Q2 2012)

Other, 8%

Eesti Energia, 92%

Regu-lated

Other, 32%

Eesti Energia, 68%

Unre-gulated

Other, 80%

SIA Enefit20%

Latvia

Other, 92%

UAB Enefit

8%

Lit-huania

Supply — Business Overview

41

Concession Area in Jordan� The Group has entered into a 44 year concession agreement in the Attarat region in Jordan

� Pre-development of 38,000 bbl/d shale oil industry ongoing and to last until at least 2016.

� Development of a project for constructing and operating 500 MW oil shale fired power station could enter construction phase in 2013

– Most recently a tender for EPC contract announced

� Additional investment during the pre-development phase of the two projects estimated at €27 million.

� The Group may reduce its holding and engage additional capital to finance the projects beyond the pre-development phase.

� Total oil shale resource ca 2.3 billion tonnes based on 44 year concession agreement

� Pre-development of an oil project and power project� The Group has 65% ownership in the Jordan

projects while YTL Power International Berhad controls another 30%

Development Projects in Jordan

42

Resource in USA, Utah� In March 2011, the Group acquired 100% of Enefit American Oil Co. (formerly known as Oil Shale Exploration Company)

� Pre-development of shale oil industry (including mines and processing facilities) ongoing and to last at least until 2016

� Additional investment during the pre-development phase estimated at €39 million

� Oil shale resource in Utah, approximately 300 km east of Salt Lake City

� Access to 3.8 billion tonnes of oil shale� Pre-development of shale oil industry with capacity

of up to 50,000 bbl/d

Development Project in USA

43