11

Transelectrica SA

Two-tier-management company

Bucharest, Feb 2014

Transelectrica’s Strategy

in line with European goals

Romanian HydroPower Market Outlook and

expected developments for 2014

Transelectrica’s Strategy

in line with European goals

Romanian HydroPower Market Outlook and

expected developments for 2014

22

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

33

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 requirementsHigh investment requirements

Main challlenges faced by Transelectrica

44

capex program

- facilitates the power exchanges in S-E Europe

- ~400 km, 800 MW, 500 kV

consolidate the grid for all generation facilities in the area (renewables and nuclear)

new lines to strengthen the transmission capacity and interconnection capacity new facilities and

technology change/updates

Fossil Fuel PP

Wind PP

OHL 400kV

OHL 220kV

OHL 400 kV operated at 220 kV

First stageSecond stage

New lines (> 1000 km) Upgrade/ uprate

Power Flows

High penetration of wind plants

NPP Cernavoda

Interconn. capacity increase

Investment needs 2014-2023 (Eur mill)

≈1,115

Cross border ≈500

RES & Relief of associated congestions

≈265

Replacement and upgrade of aged network assets

≈350

55

Capex program

Flagship projects (2014-2023)

Cross-border ≈Eur 500 mill•New interconnector RO-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 CableRO-TR

66

Cross-border interconnectors (Moldova):

OHL 400 kV Suceava (RO) – Balti (MD)EUR 65 mill: OHL total fundingEUR 30 mill: OHL Romanian shareEUR 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 substationEUR 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

Cross-border interconnectivity

Moldova (MD)

MDSuceavaBalti

Isaccea

Vulcanesti

StraseniIasi Ungheni

77

Cross-border interconnector (Serbia):

OHL 400 kV interconnector between Romania and SerbiaResita (RO) – Pancevo (SE)

EUR 30 mill: Romanian share in total funding requirement

RS

Restita

Pancevo

Serbia (RS)

Cross-border interconnectivity

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)

Portile de Fier

Arad

88

Cross-border interconnector (Turkey):

HVDC 500 kV link between Romania and TurkeyEUR 520 mill: total project funding requirementEUR 260: Romanian share

TR

Undersea CableRO-TR

Cost breakdown (EUR mill)

Romania new 400 kV AC bay 2

Romania Conv Stn+link to Constanta Nord S/S 89

Romania DC Cable+OTHL+Cable Termination Stn 14

Sea HVDC cable 261

Tukey DC Cable+OTHL+Cable Termination Stn 20

Turkey Conv Stn+link to Alibeykoy S/S 81

Turkey new 400 kV AC bay 2

Telecomunication, incl. cable 20

Client Project Management 5

Contigencies (5%) 25

Turkey (TR)

Cross-border interconnectivity

99Backup slides

1010

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.

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

General EU Framework

Romania’s priorities – in line with EU’s energy&climate goals

1111

Electricity, gas, and oil routes

European energy infrastructure priorities

1212

Romanian projects included in EU’s 10-year Grid Masterplan

ENTSO-E’s TYNDP

1313

Romania’s electricity transmission projects bring a positive contribution towards the enhancement of

transmission capabilities of the European electricity backbone

Projected power flow patterns

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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.roPhone: +40 21-3035611Fax: +40 21-3035610

President of the Executive Board (CEO): Stefan-Doru BUCATARU

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