«BELENERGO» Investment projects: Construction of Hydropower plants. State Production Association of Electric Power Industry

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1 State Production Association of Electric Power Industry «BELENERGO» Investment projects: Construction of Hydropower plants Advantages to make business in Belarus: Full protection of foreign investments Wide possibilities to invest in government assets Applying the principle of "one window" for business Providing privileged tax treatment for investors

2 The purpose of the HPP projects is the diversification of energy resources and reducing the dependence of the Republic of Belarus on imported natural gas. Dependence on Russian natural gas 2014 г г. 98 % 75 % Today the Belarusian energy system operates 46 Hydropower plants with total installed capacity of about 33 MW. At present time 2 Hydropower plants with the capacity of MW and 40 MW are being under construction. Only 6% of technically available hydro potential of Belarusian is being used. The projects are included in the State program of construction of hydropower plants in the period of years in the Republic of Belarus. SPA «Belenergo»

3 Grodno Hydroelectric Power Station Grodno Hydroelectric Power Station is a run-of-the-river hydroelectric power station on the Neman River, about 8 kilometres east of Grodno in Belarus. Construction on the 17 megawatts power station began in 2008 and it became operational on 1 September It is the largest hydroelectric power station in Belarus. SPA «Belenergo»

4 SPA «Belenergo» Construction of Hydropower Plants on the territory of The Republic of Belarus Projects location: Republic of Belarus, Vitebsk, Mogilev and Grodno region Vitebsk Technical and economic indicators of HPPs: Beshenkovichi HPP Estimated installed capacity 33 MW. Estimated project cost: 186 USD mln. Project output: 130 mln kwh. Mogilev HPP Estimated installed capacity 5,1 MW. Estimated project cost: 29,4 USD mln. Project output: 30 mln kwh. Grodno Minsk Mogilev Neman HPP Estimated installed capacity 20 MW Estimated project cost: 130 USD mln. Project output: 85,536 mln kwh. Brest Gomel Orsha HPP Estimated installed capacity 5,65 MW Estimated project cost: 48,1 USD mln. Project output: 24,3 mln kwh. Detailed project information is available on Belenergo web site at «Investment policy» section, «Direct Investments» subsection. Shklov HPP Estimated installed capacity 4,9 MW Estimated project cost: 28 USD mln. Project output: 26,6 mln kwh.

5 SPA «Belenergo» Quotas for creation of renewable energy plants In 2015 two legal acts entered into force in the Republic of Belarus, they regulates the procedure of establishment and the allocation of quotas to create installations using renewable energy sources. 1. Decree of the President of the Republic of Belarus no. 209 of May 18, 2015 «On usage of renewable energy sources»; 2. Resolution of the Government of the Republic of Belarus от «On establishing and distributing of quotas for creation of renewable energy plants». Quotas are established by Republican interdepartmental commission for the next three years, for each year and, if necessary, they are the subject for annual adjustment. To get quota investor should apply to the executive committee at the place (region) of intended location installation. The distribution of quotas is on a competitive basis. The quota for the establishment of facilities for the use of the energy of natural water flows motion MW 5 MW 72 MW

6 The way of investment projects implementation The law of the Republic of Belarus dd. July 12, 2013 N 53-З «On investments» Decree of the President of the Republic of Belarus no.10 of August 6, 2009 State guarantees Ministry of energy The ownership of HPP after commissioning Investment contract Investor Credit organizations Contractors Insurance companies HPP Maintenance activities for the production of electricity and support services a compulsory purchasing of electrical energy produced from renewable sources by state energy supplying enterprises ; a guaranteed connection of renewable energy devices to state energy networks; renewable energy fees at feed-in tariffs The ownership of HPP after the expiry of the investment agreement SPA «Belenergo»

7 SPA «Belenergo» High feed-in-tariffs The tariffs for electricity produced from renewable energy sources are set based on electric energy tariffs for industrial and equivalent consumers with the connected capacity of up to 750 kva that are indexed to the USD exchange rate, using multiplying factors differentiated depending on the type of a renewable energy source: Type of energy source Feed-in-tariff for the first 10 years from the date of commissioning of electricity generation Feed-in-tariff for the next 10 years of operation Natural movement of water energy, geothermal energy: 300 kw 301 kw 2 MW > 2 MW 1,2 (0,155 USD*) 1,15 (0,148 USD*) 1,1 (0,142 USD*) 0,75 (0,097 USD*) *As of per 1 kw*h.

8 Investment agreement Conclusion of investment agreement gives an investor the opportunity to receive additional legal guarantees and preferential conditions for the realization of an investment project including: construction of the objects provided by the investment project, in parallel with the development, expert examination and approval of the subsequent stages of the construction; simplification of obtaining land, which includes leasing of a land plot without holding of an auction; exemption from payment of import duties and VAT on importation of equipment and spare parts for the realization of the investment project; exemption from the compensation for losses of agricultural and forestry production, caused by the seizure of the land plot; exemption from the payment of the state duty for the issuance of permits to attract the foreign labour force into the Republic of Belarus; exemption from the targets fees to the local budgets.

9 Authorities. Potential state participants Ministry of energy of the Republic of Belarus Ministry of Architecture and Construction of the Republic of Belarus Ministry of Natural Resources and Environmental Protection of the Republic of Belarus The legislative acts The law of the Republic of Belarus dd. July 12, 2013 N 53-З «On investments»; Decree of the President of the Republic of Belarus no. 6 of May 7, 2012 «ON STIMULATION OF BUSINESS ACTIVITY IN THE TERRITORY OF MEDIUM AND SMALL TOWNS, AND RURAL AREAS»; Decree of the President of the Republic of Belarus no.10 of August 6, 2009 «ON CREATION OF ADDIONAL CONDITIONS FOR INVESTMENT ACTIVITIES IN THE REPUBLIC OF BELARUS» SPA «Belenergo»

10 Thank you for your attention! SPA «Belenergo»