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INTER RAO UES Generating Assets: Target Shareholding Structure March,16 2012

INTER RAO UES Generating Assets: Target Shareholding Structure March,16 2012. 1. Strategy recap and update. Engineering. Domestic Generation. Supply. International. Trading. A Leading Russian Power Company. Diversified Group Structure. Broad Geographical Coverage. Ownership Structure.

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INTER RAO UES Generating Assets: Target Shareholding Structure March,16 2012

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  1. INTER RAO UES Generating Assets: Target Shareholding StructureMarch,16 2012

  2. 1. Strategy recap and update

  3. Engineering Domestic Generation Supply International Trading A Leading Russian Power Company Diversified Group Structure Broad Geographical Coverage Ownership Structure INTER RAO UES Generation Assets Supply Assets Distribution Assets Countries with trading presence INTER RAO at a Glance • Diversified power holding involved in electricity/heat generation and supply, export/import of electricity and engineering • Operates and manages 27 thermal, 2 hydro power plants and 1 wind power farm • Total installed electricity capacity of 29GW and electricity output of 117 TWh⁽¹⁾in 2011 • Leading Russian export-import operator accounting for 97% of Russian electricity export in 2011 • Operations in over 14 countries, including Russia,Belarus, Lithuania, Georgia, Armenia, Kazakhstan, Tajikistan, Moldova, and Finland • Listed on RTS and MICEX (List A1), MCAP(2) of $11.1bn. Shares are included into MSCI Large Caps Index (0,56%) (2). GDRs admitted to LSE trading • INTER RAO –Electrogeneration (100%) • OGK-1 (75%) • OGK-3 (82%) • TGK-11 (68%) • RAO Nordic Oy (Finland) • Kazenergoresurs (Kazakhstan) • TGR Enerji (Turkey) • INTER RAO Lietuva (the Baltics) • 9 supply companies • Customer base: • 314 thousand legal entities and 9.8 million residential customers • Generation: • 2 Hydro PP - 0.2 GW • 4 Thermal PP - 5.2 GW • 1 wind power farm - 0.03 GW • Distribution • c. 34 ths. km of power lines (Georgia, Armenia) • Quartz Group • JV with Worley Parsons • JV with Rosatom • JV with GE • EMAlliance Engineering (3) • __________________________________________________________________________ • Not included Armenian NPP electricity output; • As of March,12 2012; • Russian State is represented by Russian Federal State Property Management Agency;

  4. Strategic Objectives Strategic Steps and Priorities Key Targets Key milestones Strategic Development • Organic growth through construction of new electricity generation capacity in Russia • Selective expansion into target foreign markets • Improvement of efficiency and modernization of existing assets • Integration of core assets in electricity generation and supply • Efficient management of minority stakes in the asset portfolio • Ensuring visibility into shareholder structure and stock performance • Shareholder value creation • Leadership in Russian power sector • Expansion of presence and operations abroad • Leadership in innovations and energy efficiency • Ensuring safety of Russian power supply 2012 - 2013 2015 - 2017 • Potential privatization of state-owned stake in INTER RAO as envisaged by Russian government privatization programme (until 2017) • Reorganization of INTER RAO to convert minorities of OGK-1 and OGK-3 into INTER RAO shares • International Credit Rating assessment • Potential international SPO with full London listing envisaged

  5. Portfolio of Minority Stakes(1) Value-Creative Management Progress to Date Stakes being disposed / disposed Minority Stakes Disposal • Minority participations are split into two categories with respective agreed strategies for each: • Significant minority stakes (5-50%): 1. Obtaining control 2. Swap transactions to acquire core assets 3. Creation of JVs • Small minority stakes (<5%): 1.Monetization to raise financing for the Group 2. Swap transactions to acquire core assets • Irkutskenergo: BoD resolution to swap for RusHydro • RAO ES of Far East: Swapped for RusHydro (0,2%) • OGK-6: Sold 3.47% in September 2011 (RUB1,571m raised under a buy-out). Remaining OGK-6 shares converted into OGK-2 shares • OGK-2: Sold 0.62% in September 2011 (RUB347m raised under a buy-out) • Kuban Supply Company: Sold 26.26% in September 2011 (RUB 850m) • Kuban Generation Company: Sold 26.26% in December 2011 (RUB 450m) • Tomskenergoremont: Sold 25.88% in December 2011 (RUB 150m) • E.ON Russia: Sold 3.26% in January 2012 (RUB 4,830m) • FSK EES: Sold to IRAO Capital for further swap with FSK EES • Fortum: Swapped for shares in PSK (31,01%) • Enel OGK-5: Signed agreement for sale 26.43% ______________________ (1) As of March, 12 2012;

  6. OAO «OGK-3» OAO «OGK-1» OAO «Bashkirenergo»(generating assets) Consolidation of Generating Assets by InterRAO 75% 82% 27% • OGK-1 comprises of 6 thermal power plants with total installed capacity of 9,861 MW and 2,398 Gcal per hour • 100% of the Company’s generating capacities are located in the First price zone (Europe and Urals region) - in Russia’s most power-deficient regions with high electricity consumptiongrowth outlook • The Company owns modern and efficient generating capacities. Average fuel consumption rate amounted to 328.6 g/kWh in 2011 • Gas constitutes up to 93% share of the Company’s fuel balance, coal – 7% • The Company’s key gas suppliers are Novatek and ТНК-ВР • Current Company’s investment program implies launching 1,680 MW of installed capacity in 2011-2015 • OGK-3 owns 6 thermal power plants with total installed capacity of 8,357 MW and 1,768 Gcal per hour • 69% of the Company’s generating assets are located in the First price zone (Europe and Urals region), 18% - in the Second price zone (Siberia) with the remaining 13% located in non-price zones • Average fuel consumption rate in 2011 equaled 345.1 g/kWh • OGK-3 has a diversified fuel balance split into gas (56%) and coal (33%), which makes the Company less vulnerable to gas price growth rates • The Company’s gas suppliers: Novatek and Gazprom • According to the Company's current investment program 2,265 MW of installed capacity is planned for launch in 2011-2015 • Bashkirenergo assets include 1 TPP (Karmanovskaya TPP), 10 CHPPs (including Zauralskaya gas-piston plant), 5 gas-turbine units and 9 HPPs (including 7 small-size plants) • The total installed electric and heat capacity amounts to 4,926 MW and 13,035 Gcal per hour • 100% of the Company’s generating assets are located in the First price zone (Europe and Urals region) • Bashkirenergo sells its capacity in the Urals free flow capacity zone (does not fall under any capacity price caps) • Average fuel consumption rate amounted to 320 g/kWh in 2011 • Gas constitutes up to 97% share of the Company’s fuel balance #% - Inter RAO ownership

  7. 2. Transaction Details

  8. Short overview Transaction Overview Consolidation of certain generating assets by OAO “INTER RAO UES” implies obtaining 100% ownership in OAO "OGK-1”, OAO “OGK-3” and OAO “Bashenergoaktiv”⁽¹⁾ All minority shareholders of OAO “OGK-1”, OAO “OGK-3”, OAO “Bashenergoaktiv” will be granted an opportunity to convert their shares into OAO “INTER RAO UES” stakes (INTER RAO share capital will increase by 9,56%⁽²⁾) The Transaction is expected to be closed in 4Q 2012 Share swap coefficients of OAO “OGK-1”, OAO “OGK-3” and OAO “Bashenergoaktiv” into the shares of OAO “INTER RAO UES” has been approved by INTER RAO’s Board of Directors. Consortium of investment banks (comprised of Troika Dialog and Morgan Stanley) has provided an opinion that share swap coefficients for each of the companies fall within the range of fair conversion ratios from a financial point of view • Benefits for minority shareholders from transaction : • Optimized shareholder structure and wider free float will increase the level of investors’ interest in OAO “INTER RAO UES” shares supporting company’s market capitalization • Obtaining transparent shareholding structure of the generating assets • Liquidation of uncertainty in respect to company’s shareholder structure as well as management decisions of the controlling shareholder • Unique opportunity to convert minority interest in the assets with limited liquidity into one of the blue-chips in the Russian energy sector • Hera and hereafter, considering preliminary conception of reorganization scheme and that it will be approved by authorized bodies of JSC «Bashkirenrgo» and JSC «AFK Sistema» • OAO “Bashenergoaktiv” is a generating company which is to be established as the result of OAO “Bashkirenergo” reorganization via a split of the parent company into two subsidiaries (reflecting generating and transmission businesses) • Assuming that all minority shareholders will convert their shares

  9. Transaction Structure: Consolidation of 100% in OGK-1 and OGK-3 Spin-off of OGK-1’ and OGK-3’ followed by a merger with INTER RAO – ElectroGeneration Merger of OGK-1 and OGK-3 with INTER RAO Target shareholding structure State and state-owned Companies INTER RAO minorities State and state-owned Companies INTER RAO minorities State and state-owned Companies INTER RAO, OGK-1, OGK-3 minorities >50% <50% >50% <50% >50% <50% INTER RAO INTER RAO 100% <50% INTER RAO OGK-1/OGK-3 minorities OGK shares conversion into INTER RAO INTER RAO ElectroGeneration INTER RAO ElectroGeneration 75%/82% 100% 75%/82% 25%/18% OGK-1/OGK-3 minorities Merger OGK-1/OGK-3 INTER RAO ElectroGeneration OGK-1’/OGK-3’ Spin-off of 100% subsidiaries with the following merger 25%/18% OGK-1’/OGK-3’ OGK-1/OGK-3 >50% OGK-1’/OGK-3’ Overview Corporate actions* OGK-1 and OGK-3 are reorganized via a spin-off of two 100% subsidiaries (OGK-1’ and OGK-3’, respectively) with all the assets and liabilities to be transferred to OGK-1’ and OGK-3’ property, accompanied by an immediate merger of the subsidiaries with INTER RAO-Electrogeneraciya; OGK-1 and OGK-3 are reorganized via a merger with INTER RAO along with a conversion of OGK-1 and OGK-3 minority stakes into INTER RAO shares; Shareholders who have voted against the transaction can demand buy-out of their stakes, however the total consideration is capped by 10% of net assets of the corresponding companies As of 30/09/2011,net assets value of INTER RAO equals to 46,049 mln RUB, OGK-1 – 5,896 mln RUB, OGK-3 – 9,021 mln RUB • OGK-1/OGK-3 General Shareholder Meeting: • Decision on the reorganization of OGK-1/OGK-3 via a spin-off of OGK-1’/OGK-3’ with immediate merger of the companies with INTER RAO- Electrogeneraciya; • Decision on OGK-1/OGK-3 reorganization via a merger with INTER RAO • INTER RAO General Shareholder Meeting : • Decision on the reorganization of INTER RAO via a merger with OGK-1/ OGK-3 • Decision on the increase of INTER RAO share capital • INTER RAO –Electrogeneraciya: • Decision on the reorganization of INTER RAO – Electrogeneraciya via a merger with OGK-1’/OGK-3’ • Decision on the increase of INTER RAO – Electrogeneraciya share capital (*) Corporate decisions of all the Parties of the Transaction will be scheduled in parallel

  10. Transaction Structure: Bashkirenergo Reorganisation and Consolidation of 100% in Bashenergoaktiv Reorganization of Bashkirenergovia a disproportionate split of the parent company into BashGridco and Bashenergoaktiv Merger of Bashenergoaktiv with INTER RAO Target shareholding structure Minorities State and state-owned companies INTER RAO minorities State and state-owned companies INTER RAO and Bashenergoaktiv minorities 49% 26% 25% OJSC “Bashkirenergo” >50% <50% >50% <50% Reorganization via splitting with an immediate merger with INTER RAO INTER RAO INTER RAO Generation Grids Others Bashenergoaktiv shares conversion into INTER RAO OJSC «Bashkirenergo» [Bashenergoaktiv] minorities 75%+ 100% Merger Minorities 25%- Bashenergoaktiv Bashenergoaktiv Bashenergoaktiv BashGridco Overview Corporate actions* OAO “Bashkirenergo” is reorganized via a split into a generating company (Bashenergoaktiv) and a transmission company with an immediate merger of Bashenergoaktiv with INTER RAO. As the result of the transaction Bashenergoaktiv minority shareholders convert their shares into INTER RAO stakes Shareholders who have voted against the transaction can demand buy-out of their stakes however the total consideration is capped by 10% of Bashenergoaktiv net assets • INTER RAO General Shareholder Meeting : • Decision on the reorganization of INTER RAO via a merger with Bashenergoaktiv • OAO “Bashkirenergo” General Shareholder Meeting : • Decision on the reorganization of OAO “Bashkirenergo” via a split of the parent company into OAO “Bashkirskayaelectrosetevayakompaniya” and OAO “Bashenergoaktiv” • Decision on the reorganization of Bashenergoaktiv via a merger with INTER RAO (*) Corporate decisions of all the Parties of the Transaction will be scheduled in parallel

  11. Methodology for determining conversion ratios Transaction deal metrics Conversion Ratios ⁽¹⁾ • An independent appraiser, OOO Institute of Independent Valuation, was engaged for the purposes of determining buy-back prices; • The appraiser determined fair value of assets as of 30 November 2011 for purposes of calculating exchange ratios for shares of OGK-1, OGK-3 and BashGenco; • A consortium of investment banks consisting of Morgan Stanely & Co. Limited and ZAO Troika Dialog Investment Company was engaged to provided an opinion that share swap coefficients for each of the companies fall within the range of fair conversion ratios from a financial point of view, based on the definition of all-round fairness (i.e. fairness for both the selling and buying party). (1) INTER RAO shares per one share of OGK-1, OGK-3, Bashenergoaktiv

  12. Key Corporate Actions 12

  13. OAO “INTER RAO UES” Shareholding Structure Evolution • Post-deal shareholding structure is based on share swap coefficients implied that all OGK-1/OGK-3/Bashenergoaktiv minority shareholders convert their stakes into OAO “INTER RAO UES” shares • The proposed reorganization will increase INTER RAO’s share capital by 9,56% Pre-deal shareholding structure of OAO “INTER RAO UES” Post-deal shareholding structure of OAO “INTER RAO UES” Free-float 20.39% State and state-owned companies60%+ State and state-owned companies55%+

  14. Target Management Structure Current Management Structure A Move to the Target Generation Assets Management Structure INTER RAO INTER RAO 68% ООО “MC INTER RAO – ElectroGeneration” ООО “MC INTER RAO – HeatGeneration” ООО “MC INTER RAO – ElectroGeneration” OAO “TGK-11” 100% 100% 100% 27% ОАО “Bashkirenergo” 68% 75% 100% OAO “OGK-1” INTER RAO ElectroGeneration ОАО “TGK-11” 100% ООО “BGK” 100% 82% OAO “OGK-3” INTER RAO Plants* ООО “BGK” 100% ООО “PGU HPP-5” 100% 100% INTER RAO ElectroGeneration OGK-1 Plants** ООО “PGU HPP-5” 100% ООО “BashRTS” 100% INTER RAO Plants* OGK-3 Plants*** ООО “BashRTS” #% - ownership - management (*) KaliningradHPP-2, SochiHPP, North-West HPP, Ivanov PGU (**) Perm HEP, Verkhni Tagil HEP, Urengoi HEP, Kashira HEP, Iriklinskaya HEP, 75%+1 share of ZAO Nizhnevartovsk HEP (***) Cherepetsk HEP, Kostroma HEP, Gusinoozersnk HEP, Kharanorskaya HEP, Pechora HEP, Soutn-Ural HEP

  15. Conclusion Transactions continue INTER RAO's transformation into the leading Russian Utility Significant simplification of structure and increased efficiency and transparency Enables INTER RAO to maximise financial synergies of consolidation and accelerate delivery Increased free-float and liquidity directly benefits investors and inevitability of shares Management remains confident about strategy and future prospects

  16. 3. Minority Stakes Disposal: Enel OGK-5

  17. Transaction Rationale Transaction Terms Enel OGK-5 Equity Stake Sale • Equity stake sale on market terms pursuant to INTER RAO Electric Power Assets Management Guidelines; • Further implementation of the strategy for establishing a target generation assets ownership structure; • Raising significant capital to fund INTER RAO operations, including the Power Delivery Contracts program; 1 Investor Consortium Composition – Buyers of Enel OGK-5 equity stake • Rusenergo Fund • Russian Direct Investment Fund (RDIF) • Macquarie Renaissance Infrastructure Fund (MRIF) 2 Payment at closing • US$625 MM will be received by INTER RAO at the time Enel OGK-5 equity stake is transferred to the Investor Consortium 3 Additional potential exit payment • Additional potential payment will be made to INTER RAO at the time the Investor Consortium exits the investment provided the Consortium achieves the internal rate of return set • IRR below or equal to 18%: The Consortium pays nothing to INTER RAO • IRR above 18%: The Consortium will pay INTER RAO an additional potential payment of up to US$125 MM above the base rate of return (18% p.a.) and 20% of any subsequent excess amounts (remaining 80% will be retained by the Consortium) 4 Additional potential payment if Enel OGK-5 starts paying dividends • If Enel OGK-5 pays annual dividends representing at least 25% of net profit, the Consortium will pay INTER RAO an additional potential payment of up to US$25 MM. The additional potential exit payment will be reduced by this amount

  18. Appendix

  19. Company overview Geography of operations Bashkirenergo overview Republic of Bashkortostan • Bashkirenergo is a large holding company engaged in electricity and heat generation, transmission and distribution in the Republic of Bashkortostan • Bashkirenergo’stotal installed electric and heat capacity amounts to 4,295 MW, and 13,141 Gcal/h respectively • The Company is currently reorganizing by splitting its generating and power grid assets as required by the Russian antimonopoly laws • Bashkirenergo is listed on MICEX-RTS Buyskaya Tatishly Karmanovskaya power plant Yanaul BashRTS-Neftekamsk BashRES-Neftekamsk Tyuldi Kubiyazy Shtandy Arlan Lemez-Tamak Kundashly BashRES-Neftekamsk Red’kino Novobelokatay N.Kigi Mesyagutovo Argamak V.Kigi Birsk BashRES-Ufa Bakaly Chekmagush Priufimskaya thermal power plant (200 MW capacity) Refinery Thermal power plant 1,2,3,4 (980 MW capacity) Yazikovo Nurlino Tyimazy Dema Vostochniy Ufimskaya Ufa Yfa-Yuzhnaya Blagovar Chishmy Subkhankulovo Beketovo Iremel Uchaly Raevka Beloretck-110 Aksakovo Novo-Sterlitamakskaya thermal power plant (255 MW capacity) Shkapovo BashRES Beloretck Tukan Sterlitamakskaya thermalpower plant (375 MW capacity) • The Republic of Bashkortostan is among the Russia’s most industrially developed and rapidly growing regions: • Ranks in the top-10 by GRP and investment appeal across Russia • A major industrial hub hosting upstream assets of Bashneft, downstream and petrochemical operations of the Ufa group of refineries (Ufa Refinery, Novoil, Ufaneftekhim, Ufaorgsintez), and Gazprom Neftekhim Salavat Beloretck-220 BashRES-Sterlitamak BashRES-Sterlitamak BashRTS-Sterlitamak Ashkadar BashRES-Beloretck Salavatskaya thermal power plant (245 MW capacity) Samarovka Burzyan Meleuz Zauralskaya heat station Kumertaunskaya heat station Mrakovo Sibaiskiy PP BGK Zilair HL 500 kW BSK Isyangulovo Thermal power plants BGK Galiakhmetovo HL 500 kW BSK Buribay TS 110 kWBashRES TS 500 kW BSK BSK BashRES TS 220 kWBSK BashRTS HL 110 kW BashRES PGU TEC-5

  20. Corporate structure of Bashkirenergo Key operating indicators Key operating indicators POWER GENERATION POWER TRANSMISSION ENGINEERING AND SERVICE Electric and thermal energy generation Electric and thermal energy transmission (high-voltage) LLC Energoremont LLC Energoteploremont LLC Energoavtomatika LLC Bashenergouchet LLC Bashenergotrans LLC Energosnabkomplekt LLC BGK LLC PGU TEC-5 LLC BSK Electric and thermal energy distribution (low-voltage) Heat generation and distribution LLC BashRES LLC BashRTS NON-CORE NNOU UTC “Bashkirenergo” LLC LOC “Energetik LLC Agrokhozaystvo “Mir Source: Company data

  21. Electricity Generation Evolution Installed Capacity Reference Fuel Consumption Rate Load Factor Inter RAO Generating Assets: 2011 Production Highlights(incl. generating assets of Bashkirenergo) TWh +6,8% 125.6 133.9 Total: 26.8 GW INTER RAO- Electrogeneration OGK-1 OGK-3 TGK-11 Bashkirenergo INTER RAO- Electrogeneration OGK-1 OGK-3 TGK-11 Bashkirenergo g/kWh OGK-3 INTER RAO- Electrogeneration OGK-1 TGK-11 Bashkirenergo INTER RAO- Electrogeneration OGK-1 OGK-3 TGK-11 Bashkirenergo

  22. THANK YOU FOR YOUR ATTENTION!

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