Moldova Business Week Gas Natural Fenosa in Moldova

Moldova Business Week Gas Natural Fenosa in Moldova Jose Luis Gomez Country Manager Moldova November 28, 2018

Gas Natural Fenosa in the World Assets 47,332M EBITDA 3,915M Customers 18 + M Leading multinational group in gas and electricity Employees 15,375 Note: Figures as of December 31, 2017. 2

Gas Natural Fenosa in the World Presence in 30+ countries Mexico Gas distribution and electricity generation. Puerto Rico NG/LNG infrastructure and generation of electricity. Dominican Republic Electricity Generation Costa Rica Electricity Generation Panama Electricity distribution and generation Colombia Gas distribution Electricity distribution Brazil Gas distribution Argentina Gas distribution Electricity Distribution Peru Gas Distribution (start gasification) Chile Electricity Transmission and Distribution, gas distribution Portugal NG/LNG commercialisation and commercialisation of electricity Spain Exploration, transportation, distribution and commercialisation of gas and electricity. Generation. Regastification, upstream, commercialisation and NG/LNG infrastructure. Morocco NG/LNG infrastructure Algeria NG/LNG supplying and infrastructure United Kingdom NG/LNG commercialization GN/GNL Infrastructure France Belgium NG/LNG NG/LNG commercialisation commercialisation Angola NG/LNG infrastructure South Africa Coal supplying Netherlands NG/LNG commercialisation Kenya Electricity Egypt generation NG/LNG supplying and infrastructure Luxembourg NG/LNG commercialisation Germany NG/LNG commercialisation Moldova Electricity distribution Korea NG/LNG commercialisation Japan NG/LNG commercialisation India NG/LNG commercialisation Oman NG/LNG supplying and infrastructure Australia Wind generation projects 3

Gas Natural Fenosa in Moldova In Moldova since the privatization process in 2000 Customers: 889.078 State- Owned (30%) Sales: 2.704 GWh Network: 35.142 km Transformation facilities: 9.111 (2.032 MVA) Note: Figures as of December 31, 2017. Gas Natural Fenosa (70%) 4

Gas Natural Fenosa in Moldova Challenges Set-up a team capable of leading a process of transforming the company in line with European standards and GNF corporate culture. Improve the performance of the company, including the quality of service and the efficiency. Properly manage the regulatory framework. 5

Gas Natural Fenosa in Moldova Challenges Set-up a team capable of leading a process of transforming the company in line with European standards and GNF corporate culture. Improve the performance of the company, including the quality of service and the efficiency. Properly manage the regulatory framework. 6

Gas Natural Fenosa in Moldova Team of GNF 7

Gas Natural Fenosa in Moldova Challenges Set-up a team capable of leading a process of transforming the company in line with European standards and GNF corporate culture. Improve the performance of the company, including the quality of service and the efficiency. Properly manage the regulatory framework. 8

Gas Natural Fenosa in Moldova Challenges Set-up a team capable of leading a process of transforming the company in line with European standards and GNF corporate culture. Improve the performance of the company, including the quality of service and the efficiency. Properly manage the regulatory framework. 9

Key Performance Indicators Cumulative Investments (Million USD) 350 300 250 200 150 100 50 35 51 59 68 86 99 113 131 151 169 189 211 230 249 267 277 290 305 327 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 E2018 More than 80% of the Investments have been allocated to the renewal of power lines and the modernization of electricity facilities 10

Key Performance Indicators Number of Employees Employees 3.000 2.500 2.000 1.500 2.952 2.696 2.409 1.996 1.800 1.645 1.508 1.373 1.301 1.242 1.166 1.142 1.000 785 753 736 727 709 708 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Productivity reached via the introduction of best practices and technology 11

Key Performance Indicators SAIDI (System Average Interruption Distribution Index) SAIDI(h/client) 24,0 20,3 20,0 16,0 12,0 18,1 16,7 15,7 16,0 11,7 11,4 8,0 6,9 7,1 7,2 6,8 4,0 4,4 3,0 4,0 3,5 0,0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 E2018 81% improvement in Quality of Supply (average interruption time per customer) 12

Key Performance Indicators Energy Losses (%) 35,0 32,3 34,0 29,3 30,0 29,0 Losses % 25,0 20,0 23,4 21,4 16,9 16,9 15,4 14,0 13,9 15,0 13,1 12,4 10,8 9,5 10,0 8,2 8,3 8,1 8,1 5,0 0,0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 E2018 Reduction of 75% in energy losses 13

Key Performance Indicators Cash Collection Cash Collection (%) 110 105 100 97 97 98 102 98 100 99 99 100 100 100 101 101 101 99 100 99 95 90 88 85 81 80 75 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 E2018 Collection ratio consolidated at 99-100% level 14

Gas Natural Fenosa in Moldova Challenges Set-up a team capable of leading a process of transforming the company in line with European standards and GNF corporate culture. Improve the performance of the company, including the quality of service and the efficiency. Properly manage the regulatory framework. 15

Gas Natural Fenosa in Moldova Challenges Set-up a team capable of leading a process of transforming the company in line with European standards and GNF corporate culture. Improve the performance of the company, including the quality of service and the efficiency. Properly manage the regulatory framework. 16

Regulatory Framework Disputes and Problem Solving The delay to adjust the tariff to cost-recovery level produced a tariff deficit in 2015, resulting in a shortage of financial resources in the sector. However... With the involvement of MoEI, an Agreement was reached to adjust the tariff and to recover the tariff arrears in 4 years. The tariff methodology was amended in 2017 without sufficient consultations with interested parties. However... A new tariff methodology was openly discussed in 2018, correcting the drawbacks. 17

Challenges & Opportunities Moldova Short Term Renewable Energy Sources (Wind, FV) 2020 Wind: 100 MW; PV: 40 MW Tender or FiT by ANRE (or PPA with RetCo) Self-consumption (Net Energy Metering) Interconnection with Romania (ENTSO-E) 2 (3) Lines 400 kv + BtB station Energy Efficiency Climate Control, Lighting (LED),efficient equipment Demand Side Management Flatten the load curve: Peak & Off-peak tariffs SmartMeter EU Directive (but expensive: 120/meter) Energy Efficiency Equipment Use of technologies that lead to better energy use Control Knowing and understanding energy and economic costs Culture Knowledge, training and involvement in energysaving 18

Challenges & Opportunities Energy Trending Topics Generation Low emission power plants; Renewable: Solar PV, Wind, Biomass, Hydro Waste to Energy Sustainable Mobility Clean vehicle, electricity charging stations Energy Storage Distributed Energy Resources (DERs): Small Solar PV / Rooftop Solar / Small Wind / Small Hydro / Biomass Digital Transformation IoT, AI, Network automation Big Data Li-Ion batteries, storage by Utilities, non-utilities and residentials, Micro storage Assets, Customers SmartGrid Intelligent Networks integrating the activities of different agents to achieve an efficient, safe and sustainable electricity supply Participants: Power plants, DER, Transmission & Distribution networks, Off-grid systems, SmartMeter, Energy storage, Vehicle charging stations, along with DMS 19

Challenges & Opportunities SmartGrid 20

Thank you very much This presentation is the property of Gas Natural Fenosa. Both its content and the graphic design are for the exclusive use of its staff. Copyright Gas Natural SDG, S.A.