Litgrid AB

Investor Presentation • Jun 4, 2015

Litgrid AB

4 June 2015, Vilnius

Litgrid mission:

ensure reliable electricity transmission and enable competition in the open electricity market

Litgrid – electricity transmission system operator

Litgrid vision:

full-fledged integration of Lithuania's electricity system into the European electricity infrastructure and the common electricity market, by creating opportunities for competitive economy

Litgrid AB shares listed on NASDAQ OMX Vilnius Exchange since 22-12-2010 (Baltic secondary list) Litgrid AB shares

Authorized share capital € 146 million Market capitalization € 350 million

97,50% 2,50%

UAB EPSO-G: 491 736 153 ordinary registered shares

Other shareholders (5 627): 12 595 227 ordinary registered shares

17-04-2015

Since the beginning 70 years ago Lithuania's power system has 12 interconnectors to other systems:

• 4 to Latvia
• 8 to Russia and Belarus

2 new interconnectors will help diversify electricity supply

Strategic Projects

• First electricity interconnection between Lithuania and Sweden
• 450 km long undersea cable
• 700 MW capacity • HVDC direct current converters in Klaipėda and Nibru (Sweden)

2004

Completion of the Feasibility Study on Interconnection of the Lithuanian and Swedish power systems 2009 The Baltic Seabed Survey

In 2010, agreements between Lithuanian and Swedish TSOs were signed, in December contract on the link related works concluded

In 2011, agreement on the intersection of NordBalt and Nord Stream was signed

In 2011, construction of Klaipėda -Telšiai line launched

In 2012, manufacture of the undersea cable launched.

In 2014, undersea cable laying works, direct current converter station construction works launched.

In 2014, TS reconstruction in Klaipėda completed.

In 2015, current converter equipment delivered to Klaipėda. Manufacture of the undersea cable completed. Cable laying in the sea continued. 90 % of the link -related works completed.

• Estimated project value: € 552 million, Lithuania's part - €222 million
• Powerful link between Lithuanian and Swedish power systems to meet the demand of alternative energy sources

• Already lower prices on futures on the electricity market

• First power link between Lithuanian and Western European power grids

• Power line Alytus-Elk (Poland)
• 500 MW power capacity as of 2015
• HVDC direct current converter station near Alytus

Since 1992 Possible options of the link project studied, feasibility studies conducted 2006

Political declaration by Lithuania and Poland on interconnection of the power systems

In 2011, TSO agreements on project implementation signed between Lithuania and Poland In 2013 , contracts signed for the

launch of works related to line and current converter station construction

In 2014, line and converter station construction works launched

Construction of overhead line supports, building of the converter station Reconstruction of

Alytus TS

In 2015, equipment for direct current converter station delivered

75 % of the link related works completed

• Estimated project value: €370 million, Lithuania's share - €108 million
• Finally, the homestretch of the project planned for almost 20 years
• First direct energy link between the Baltic States and Western Europe

Electricity links – strategic projects of the European Union, the Baltic Sea Region, and Lithuania

• LitPol Link and NordBalt offers Lithuania an opportunity to choose energy resources and guarantee energy independence
• Put on the European energy map they mean the implementation of the Baltic Energy Market Interconnection Plan (BEMIP)

Results

Consumer price on electricity in 2015– 12.787 euro cents/kWh

The value of investment into strategic power infrastructure (...) is expected to cut the major share of the electricity price "pie" and offer unparalleled opportunity to boost competitive abilities of the national industry and business several decades ahead

2% 3% 11% Balancing-regulation electricity revenue System services revenue ICT revenue 8% 4%

PSO revenue

2% Transmission revenue

• Other electricity-related revenue
• Revenue from investment projects and similar Other revenue

31%

Training and international activity Other

2014 2013

http://www.nasdaqomxbaltic.com/

19%

10%

2%

Key financial indicators, revenue and cost structure in 2014

Revenue structure Operating expense (OPEX) structure

Key financial indicators, revenue and cost structure of 2015 Q1

Revenue Structure Transmission income

• Balancing electricity income
• Auxiliary service income
• ITC income
• PSO income
• Other electricity related income

• Other income

• OPEX Structure Wage & social security

• Repair & maintenance
• ITC services
• Taxes
• Premise & transport lease
• Training & international activity
• Other

Litgrid price of share and trading volumes

http://www.nasdaqomxbaltic.com/

Upcoming Tasks and Challenges

Integration of the Baltic States into the Continental Europe – path guided by the experience of Poland and other Central European countries

Baltic States to Join the ECN Team

Benefits of integration of the Baltic States into the ECN:

• Reliable operations of the power grids and secure power transmission.
• Coordinated actions in maintenance of installations and planning of further network development.
• Common power grid management regulations: network codes common for all countries of the European Union.
• Guaranteed power availability from the Western European grids.

Our Team at Litgrid

Empowering the growth of Lithuania