Ignitis Grupe

Interest Rate Update/Notice • Aug 3, 2021

National Storage Mechanism | Additional information

On the established rate of return on investments for 2022

AB “Ignitis grupė” (hereinafter – Ignitis Group or the Company) informs that National Energy Regulatory Council (hereinafter – NERC) has published updated data for calculation of weighted average cost of capital (hereinafter – WACC) for electricity and natural gas sectors. According to NERC data, WACC for Ignitis Group companies as of 1 January 2022 will be:

Segment	Company	WACC 2022	WACC 2021	Change	Regulated asset base (RAB) 2021**
Networks (electricity)*	AB “Energijos skirstymo operatorius”	4.16%	5.34%	(1.18 pp)	EUR 1,414m
Networks (natural gas)	AB “Energijos skirstymo operatorius”	3.98%	3.90%	0.08 pp	EUR 249m
Flexible Generation/Green Generation	AB “Ignitis gamyba”	4.03%	3.50%	0.53 pp	EUR 50m
Customers & Solutions	UAB “Ignitis”	3.05%	2.93%	0.12 pp	EUR 26m***

* WACC for electricity business of the Networks segment was calculated in accordance with the updated Methodology on Rate of Return on Investment (see below), which shall apply from the new regulatory period, which will start on 1 January 2022.

** RAB values by individual companies approved by NERC for 2021 are provided for illustration in order to point out the proportional significance of the changes.

*** RAB for businesses of the Customers & Solutions segment comprises net working capital for covering the demand of public supply of electricity.

The Company reminds that on 30 December 2020 NERC approved the updated Methodology on Rate of Return on Investment (hereinafter – Methodology). It must be noted that the provisions of the updated Methodology, related to determining equity capital for the Ignitis Group companies shall be applied only from the beginning of the new regulatory period. Due to the above, the return on equity capital for natural gas business of the Networks segment and the Customers & Solutions segment will be recalculated from 2024 and 2026 respectively.

At the same time, the provisions of the updated Methodology, related to determining the cost of debt, are applicable when calculating the rate of return on investments for 2022 because the cost of debt is recalculated each year.

New WACC rates correspond with the management’s expectations communicated during the Q1 2021 earnings call of the Company that, after the Methodology is updated, the WACC rate for electricity distribution business of the Networks segment will reach between 4.0% and 4.5%.

For more information please contact:

Artūras Ketlerius

Head of Public Relations at Ignitis Group

arturas.ketlerius@ignitis.lt

+370 620 76076