Federal Grid Company

28 March, 2011London

Investor Presentation

Andrey Kazachenkov, Deputy Chairman of the Management Board

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Disclaimer

The materials comprising this Presentation have been prepared by the Company solely for use by the Company’s management at investor meetings with a limited number of institutional investors who have agreed to attend such meetings and to be subject to obligations to maintain the confidentiality of this Presentation.

This Presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this Presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This Presentation does not constitute a recommendation regarding the securities of the Company.

This Presentation is not directed at, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

The forward-looking statements in this Presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. These assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control and it may not achieve or accomplish these expectations, beliefs or projections. In addition, important factors that, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements include the achievement of the anticipated levels of profitability, growth, cost and its recent acquisitions, the timely development of new projects, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economic conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance.

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Listing overview

Company

Sector

Listing

GDR/Share split

Financial Advisor

Investor meetings

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Legal Advisor

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Key messagesThe largest publicly traded electricity transmission

company in the world by the length of transmission lines and transformer capacity

A leading Russian blue chip company and the largest Russian utility company by market capitalisation

Natural monopoly position on the Russia’s high-voltage electricity transmission market

Guaranteed return on investment following the transition to the Regulatory Asset Base tariff system (RAB)

Strong development pipeline backed by a five-year RUR 952.4 billion investment programme

Considerable scope to enhance performance through greater operational efficiency and capital structure optimization

Market Cap: USD 17.5 bln (24th March, 2011)Market Cap: USD 17.5 bln (24th March, 2011)

Federal Grid at a glance

(1) Based on IFRS figures

(2) Adj. EBITDA = EBITDA - Reversal of impairment provision of property, plant and equipment + Revaluation loss on property, plant and equipment + Impairment of available-for-sale investments and associates + Finance income

(3) Adj. profit for the period = Net Profit - Reversal of impairment provision of property, plant and equipment + Revaluation loss on property, plant and equipment + Impairment of available-for-sale investments and associates - Deferred income tax on adjustments

(4) Owned, managed or operated by Federal Grid

Russian Federation: 79.48%

Free Float: 20.52%

Shareholders Structure:

Key Indicators 2009 1H 2010

Revenues(1), RUR mln 87,580 56,565

Adj. EBITDA(1), RUR mln 42,431(2) 31,949(2)

Adj. profit for the period(1),RUR mln

17,010(3) 12,636(3)

Number of substations(4) 761 798

Transformer capacity, MVA, 35-750 kV(4) 298,459 305,960

Transmission grid length, thousand km(4) 118 121

Total volumes of electricity transmitted, bln kWh

466 239

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Regions of operations

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Russian Electricity Sector

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Regulatory bodies

Ministry of Economic Development

Ministry of Energy:Investment program approval

Federal Tariff Service (FTS):Tariff setting

Russian Electricity Sector

Generation

Transmission

Distribution SalesFederal Grid

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Federal Grid Business

Electricity transmissionElectricity transmission Technological connectionTechnological connection

Federal Grid is the backbone of Russia’s national electricity sector and a natural monopoly operating in 73 regions of the country

Primary consumers are regional distribution companies, retail electricity supply and large industrial enterprises

Federal Grid’s share in the electricity prices paid by the end-consumers is approximately 6%

Revenues are based on the tariff set by Federal Tariff Service (FTS) for 5 years using RAB methodology

Income generated from electricity transmission makes up approximately 94% of the total revenue

Costs of electricity losses are passed on to consumers

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Strategy

The transmission electricity grid is a backbone of the national economy and infrastructure. Federal Grid plays a vital role in ensuring the development and reliability of this system. We operate in a modern, regulated market environment, and are committed to delivering value to our shareholders and investors.

MISSION

Reliability and efficiency

Development and innovations

Safety

Corporate Governance and Personnel

Shareholder Value

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Investment Program 2010 – 2014

Total amount of planned investments 2010-2014 is RUR952.4 bln

Grid upgrades under Federal Programs(2)

(4,808 km; 4,181 MVA)

Upgrading grid facilities in Moscow, St. Petersburg,

Tyumen(980 km; 17,531 MVA)

Long-haul grids development(3)

(5,367 km; 10,890 MVA)

Innovations and energy efficiency, technological operations improvement

Renewal of fixed assets (10,468 km; 37,866 MVA)

Technological connection (33 km; 2,577 MVA)

Other grid development projects

Joint projects with regional authorities(1)

(5,367 km; 10,890 MVA)

Capacity provision(NPP, HPP, TPP)

(5,180 km; 10,936 MVA)

(1) Excluding Moscow, St. Petersburg, Tyumen

(2) East Siberia – Pacific Ocean oil pipeline, Sochi Olympic Games, Vankor, Sayan, etc.

(3) Excluding joint projects with regional authorities8

127.4 (13.4%)

90.4 (9.5%)

212.8 (22.3%)

65.8 (6.9%)

216.3 (22.7%)

14.7 (1.5%)28.4 (3.0%)

58.7 (6.2%)

137.9 (14.5%)

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Capacity provision of Novovoronezhskaya NPP-2 generating unit #1 (1,150 MW)

Commissioning date – 2012

Key Investment Projects

Transmission lines (220KW, 330KW, 500KW, 750KW)

Transmission lines and substations

Underground cabling

Capacity provision of Boguchanskaya HPP start-up complex (1,000 MW)

Commissioning date – 2013

Infrastructure for Sochi Olympic Games 2014

Commissioning date – 2012

Capacity provision of Kalininskaya NPP generating unit #4 (1,000 MW)

Commissioning date – 2011

Electricity supply of East Siberia – Pacific Ocean oil pipeline

Commissioning date – 2012

Construction of Zeyskaya HPP – Russian-Chinese border transmission line

Commissioning date – 2013

Infrastructure for APEC summit in Vladivostok in 2012

Commissioning date – 2011

Construction of electricity supply facilities on Elginskoye coal deposit

Commissioning date – 2013

Underground cabling in Moscow, St. Petersburg, Nizhny Novgorod

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Transition from overhead lines to cable and construction of Skolkovo 220 KV substation

Commissioning date – 2012

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Investment Program: 2010-2014New Construction

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2010 2011 2012

26,557

13,047

22,4745,435

3,2933,521

Transmission lines, km

Transformer capacity, MVA

New construction 2010 – 2014

2013 2014

19,000

5,893

8,1022,936

73 new substations with a total transformer capacity of 89,180 MVA

123 new high-voltage transmission lines with a total length of 21,078 km

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Smart grid: new level of Russian power sector developmentSmart grid is a brand-new state of the grid based on the modern principles and technologies of electricity transmission and transformation

Smart grid (integration role)

Consumers, industrial plants

Digital substations

Microturbines and storage units

Smart grid element

Generation and alternative energy

Integration of all types of generation (including small generation) and all types of consumers (from households to large industrial enterprises) for situation management of demand for their services and active participation in energy system performance

Real-time change of the parameters and grid topology preventing the system from accident conditions

Enhancement of market infrastructure opportunities through rendering a wide range of services both by market entities and the infrastructure

Electricity loss minimization, enhancement of system self-diagnostic and self-sealing with compliance to the reliability and power quality terms

Power grid and information infrastructure integration for all-mode system management accompanied by a full information support

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Transition to RAB

201051.1%

tariff growth

Return on initial invested capital: 3.9%

Return on initial invested capital: 5.2%

Return on initial invested capital: 6.5%

Return on new invested capital: 11% per annum

*approved by the Government of Russian Federation

Source : Federal Tariff Service

5-year regulatory period*

Return on initial invested capital: 7.8%

Return on new invested capital: 10% per annum

Return on initial invested capital: 9.1%

26,95% tariff growth

201132.91%

tariff growth

201226.95%

tariff growth

201321.1%

tariff growth

201415.2%

tariff growth

Initial base of invested capital as of 01.01.2010 (Initial RAB) was RUR647.6 bln

Annual regulatory rate of decrease in operating costs controlled by FTS is 2%

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61,087

22,683

11,1672,003

69,251

33,813

7,66312,249

87,580

42,431

13,65117,010

56,565

31,949

13,98412,636

Revenue Adjusted EBITDA Adjusted operating profit Adjusted profit for the period

20072008

20091H 2010

Financial Performance(1) (2007 – 1H 2010)

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Indicator 2007 2008 2009 1H 2010

Adjusted operating profit margin,%

18.3% 11.1% 15.6% 24.7%

Adjusted EBITDA margin,% 37.1% 48.8% 48.4% 56.5%

Adjusted profit for the period margin,%

3.3% 17.7% 19.4% 22.3%

Key profitability ratios

P&L indicators, RUR mln

(1) Based on IFRS figures

(2) Adj. EBITDA = EBITDA - Reversal of impairment provision of property, plant and equipment + Revaluation loss on property, plant and equipment + Impairment of available-for-sale investments and associates + Finance income

(3) Adjusted operating profit is calculated as operating profit or loss adjusted for reversal of impairment provision of property, plant and equipment, specific impairment of property, plant and equipment and intangible assets, revaluation loss on property, plant and equipment and gain on sale of available-for-sale investments

(4) Adj. profit for the period = Net Profit-Reversal of impairment provision of property, plant and equipment + Revaluation loss on property, plant and equipment + Impairment of available-for-sale investments and associates - Deferred income tax on adjustments

(2) (4)(3)

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51.2%

20.7% 18.8%

56.5%

24.7% 22.3%

Adjusted EBITDA margin, % Adjusted operating profit margin, % Adjusted profit for the period margin, %

1H 2009

1H 2010

42,247

21,635

8,743 7,940

56,565

31,949

13,984 12,636

Revenue Adjusted EBITDA Adjusted operating profit Adjusted profit for the period

1H 2009

1H 2010

+34%

+48%

+60% +59%

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1H 2010 Financial Performance(1)

Key profitability ratios

(1) Under International Financial Reporting Standards (IFRS)

P&L indicators, RUR mln

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Bond issue RUR mln Interest rate,% Maturity date

Series 4 6,000 7.3 06.10.2011

Series 6 10,000 7.15 26.09.2013

Series 7 5,000 7.5 27.10.2015

Series 8 10,000 7.15 26.09.2013

Series 9 5,000 7.99 24.10.2017

Series 10 10,000 7.75 24.09.2015

Series 11 10,000 7.99 24.10.2017

Total 56,000

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Bond Portfolio (March 1st, 2011)

Credit portfolio and liquidity(1)

9m 2010 DEBT/EBITDA = 0.71

Credit facilities

(1) Based on Russian Accounting Standards (RAS)

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Summary

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Advanced Tariff Regulation System

RAB-based regulation enhances operational efficiency and ensures predictable returns on

invested capital

Large Scale of Operations and Stable Demand

Critical part of the infrastructure of the Russian economy and the backbone of the national

electricity sector

Sound Financial Position

Strong growth in revenue and earnings coupled with balance sheet strength

Established Development Program

Large-scale investment program is expected to stimulate a robust expansion of our

business and asset base

Maximization of shareholders value

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Contacts

Federal Grid Company of Unified Energy System5A, Akademika Chelomeya Str., Moscow, Russia, 117630

Head of Investor Relations

Alexander Duzhinov Head of Investor RelationsTel.: +7 (495) 710 90 64Mob.: +7 (916) 041 80 53E-mail: ir@fsk-ees.ru

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