Market Overview 31 December 2016 year

Market Overview Price Dynamics on the Russian Market Comments Electricity and Capacity Price Dynamics Electricity price on the spot market in the 1st price zone increased 4.0% YoY alongside with unfavorable domestic market conditions in the 2nd price zone where electricity price decreased 5.7% YoY; KOM’s capacity prices in the wholesale market went up by 16.5% YoY; Capacity payments for CDA objects grew on average 27.7% YoY due to increased yields of long-term government bonds, adjusted mechanism for calculating the day-ahead market coefficient sand the CPI-indexed operating expenses and delta CDA payments for a number of objects after the 7th year of capacity delivery Capacity Deliver Agreements (CDA) resulted in an average from 4.5 and 8.7 times higher price level in comparison with other segments of the capacity market. Electricity Price Dynamics on the Spot Market, RUB/MW/hour Change 2016-2015 1st price zone +4.0% 2nd price zone -5.7% Capacity Price Dynamics on the Wholesale Market ths RUB/MW/month (1) 2016 2015 Change Regulated agreements 144,887 130,696 +10.9% CDA 958,046 750,395 +27.7% КОМ 136,075 116,824 +16.5% Forced-mode regime 210,680 212,864 -1.0% Expensive generation 0,0 - Free bilateral agreements 109,961 104,746 +5.0% Electricity Sales Breakdown on the Wholesale Market, 2016, TW*h(2) Capacity Sales Breakdown, 2016(3) CDA 14.4% Regulated agreements 30.3% Forced-mode regime 5.7% KOM 13.9% Free bilateral agreements 35.7% Regulated Contracts 21.5 Free market 78.5% The total volume of sales: 126.2 TW*h The total volume of sales: 25.7GW ____________________ Capacity prices dynamics is calculated on the base of nominal average price of 1MW of capacity sold in each market segment Electricity Sales Breakdown on the Russian Wholesale Market (Russian generation) For Russian assets only Market Overview