Environment and Safety

Environmental Policy of JSC Inter RAO — Electric Power Plants

Executive Summary

JSC Inter RAO — Electric Power Plants (the “Company”) generates electricity and heat across Russia from Kaliningrad to Zabaykalsky Krai.

The Environmental Policy of JSC Inter RAO — Electric Power Plants complies with the requirements of ISO 14001, GOST R ISO 14001, Declaration on Environmental Responsibility of JSC INTER RAO UES enacted by the Board of JSC INTER RAO UES on March 30, 2012 (Meeting Minutes No. 6 of April 02, 2012), Technical Policy of INTER RAO UES Group enacted by JSC INTER RAO UES Order of 10.06.2013 No. IRAO/320 (approved by the Executive Board of JSC INTER RAO UES, Meeting Minutes of 18.04.2013 No. 437) and the Development Strategy of the Company. It serves as the foundation for the setting of specific objectives and goals, the planning and the implementation of environmental protection initiatives, and the development of environmental footprint and risk management system used by the Company.

This document defines core goals and directions of the Company in the area of the management of environmental footprint and risks associated with Company operations, environmental protection, conservation of natural resources, and protection of health of employees and communities affected by Company operations.

Every employee of JSC Inter RAO — Electric Power Plants is required to comply with the key provisions of this Policy.

This Policy is long-term, and it is not limited in time.

The objective and key directions of the Environmental Policy of JSC Inter RAO — Electric Power Plants

The Company bears a share of responsibility for the environment and public health in the regions affected by Company operations.

The Company has adopted the following environmental goals to support sustainable development of the Company and the regions where it operates, to produce economic benefits and secure business advantage, and to increase market capitalization, all while recognizing its share of responsibility for the environment:

- Ensure the compliance of Company operations with the national, industrial, regional and local environmental protection and industrial safety regulations

- Constantly reduce negative environmental footprint as much as technically and economically feasible, and with regard to technology and business considerations, and strive for complete elimination of pollution and improvement of the environment

- Constantly reduce specific power consumption and energy costs

- Reduce environmental risks and the amount of payments (fines) for negative impact on the environment, and mitigate the risk of environmental disasters

- Ensure the agreement between the management team and the employees of the Company, shareholders, government authorities, community organizations and communities on the matters of environmental safety of Company operations and the efficiency of its environmental protection initiatives, and establish positive environmental image of the Company

- Use innovative power conservation and power efficiency technologies and solutions

By achieving these goals, the Company will strive for leadership in sustainability and environmental safety of electricity and heat generation.

To achieve these goals, the Company will develop its environmental protection initiatives in the following areas:

Planning:

- Improve operating energy efficiency, power and resource conservation, and technology discipline

- Improve the efficiency of natural and material resource consumption

- Reduce water consumption through adoption of water-free technologies, water recycling and closed water cycles where possible; measurement of water consumption; reduction of losses; and improved quality of engineering infrastructure operation and maintenance

- Ensure compliance with federal laws, regulations and other rules governing the protection of the environment

Implementation:

- Prioritize the implementation of environmental protection initiatives preventing production of hazardous elements, waste and negative factors, as well as comprehensive environmentally and economically sustainable undertakings

- Eliminate the use of hazardous and dangerous materials and processes where possible, monitor environmental performance of purchased power generation fuel, supplies and equipment

- Use the latest available environmental technology solutions in design and construction of new power generation facilities, and in modernization and rehabilitation of existing equipment

- Implement the plan for prevention of breakdowns affecting the environment, and ensure the readiness to respond to emergencies and compensate the damages

- Provide Company employees with trainings on environmentally safe processes and emergency response

- Provide updates on environmental protection initiatives to all stakeholders (communities, legislative and executive authorities, etc.) on a regular basis

- Promote environmentally responsible behaviors among Company employees, contractors, and suppliers of fuel, equipment and supplies

Monitoring:

- Develop a multi-level monitoring framework for environmental safety of individual subsidiary operations

- Develop the system for environmental monitoring of Company operations

- Monitor and measure environmental performance targets and motivate the employees to improve them

Analysis and improvement:

- Develop and constantly improve the performance of the environmental management system

- Pursue an active environmental information policy and develop public environmental reporting of the Company

- Ensure transparency and accessibility of Company facilities and the results of its environmental protection initiatives and environmental monitoring of its operations for all stakeholders; identify and consider stakeholder opinions

- Support international, national, regional and local community initiatives in the areas of environmental protection and sustainable development