Strategy of State Atomic Energy

Corporation “Rosatom” till 2030

June, 2012

Karavaev I.A.

Chief Strategy and Investments Officer

www.rosatom.ru

By 2030, nuclear power generation is expected to keep pace with global energy demand

1Source: EIA International Energy Outlook 2011

• Significant share in the power balance

• Emissions of CO2 and nitrogen&sulphur

oxides

• Volatile prices on fossil fuels

• High costs ( 2-6 times more than nuclear

energy)

• Low load factor

• Development of electricity transmission

and storage technologies

Thermal energy

• Large scale electricity supplies in base

load

• Absence of emissions of CO2 and

nitrogen&sulphur oxides

• Low operating costs (including fuel)

compared with thermal energy

Renewables

Nuclear energy

Electricity generation by types‘000 TWh

Development drivers

31,9

20302025

14%

24%

62%

28,8

61%

24%

15%

2020

25,4

61%

25%

15%

2015

22,6

63%

23%

14%

2008

19,2

67%

19%

14%

fact forecast forecast forecast forecast

2,5%

3,3%

2,0%

2,3%

CAGR

Thermal

Renewable

Nuclear

www.rosatom.ru

Within a year after Fukushima majority of the countries confirmed nuclear power development plans

2

Complete refusal from nuclear

power with accelerated

decommissioning

Refusal/freezing of new

reactors construction plans

Confirmation of previous plans

on nuclear power development

Increased activity in nuclear

power development

Changes in official positions of

countries on nuclear power

development, March 2011 – May 2012

Source: Rosatom analysis

447

-3%

2012

435

385

50

Temporary

shut-down

50

Final

shut-down

12

2011

Reactors in operation

New reactor projects

194216

11

Freezed 2012

-10%

Refusal

11

2011

South Africa

Venezuela

Germany

ItalyTurkey

Pakistan

Saudi Arabia

Kazakhstan

Vietnam

Japan

Belgium

Switzerland

Taiwan

Philippines

Slovakia

www.rosatom.ru

Steady growth of nuclear power will be accompanied by development of nuclear related segments

3

Nuclear market segments in 2011-2030,

bln USD

CAGR

2011- 2030

2%3% 1%4% 7%7%

• All nuclear markets are expected to grow until

2030

• Radiation management and SNF

reprocessing are likely to grow at the highest

rate:

o Radiation management nuclear

technologies may be used in the sphere of

ecology waste destruction, nuclear

medicine, radiation centres, security

systems and nondestructive testing

o SNF reprocessing allows to solve the

problem of nuclear wastes condition to

development of reprocessing technologies

and breeders

Source: Rosatom estimations

31718

31

69

133

92622

53

267

300

Front end

of fuel cycle

Service SNF

reprocessing

and

secondary

fuel

Nuclear

generation

NPP

construction

Radiation

manage-

ment

2011

2030%

www.rosatom.ru

Rosatom strategy implies transformation into the global market leader through development of new segments based on conventional markets

4

2006 – 2011 2012-2020

Implementation of NPP

construction programme in

Russia, increase in foreign

presence to support global

business development

Growing operating efficiency

Choice between key technology

options

Innovative businesses

development

Bid formation

Assets consolidation

Staffing

Quantification of new

strategic goals

2020-2030

Creating conditions

for growth

Controlled

breakthrough

Accelerated

development

Retention of positions

in conventional

markets

Development in the

role of the global

technology leader

Global

technological

leader

www.rosatom.ru

The objective of Rosatom global leadership is specified in key 2030 target indicators

5

Technological leadership

Investments in new projects up to $3 bln per

year

Launch of IV generation reactors (breeders)

R&D commercialization

1

Global presence

Top-3 in all key nuclear market segments

Scale

Business scale which can be compared with

nuclear leaders

3

2

Target goal for 2030

Nuclear generating

capacities2,5 times

growth

Foreign assets

share

Revenue 5 times

growth

Share of new

products40%

25%

R&D expenditures4,5% of

revenue

Foreign operations

share50%

Corporate goals

Brand

awarenessTop-100 in

the world

NPP construction

abroadLaunch of

30 units

www.rosatom.ru

R&D development is one of the key Rosatom priorities for 2012-2030

6

Share of R&D expenses in revenue, %

Source: The 25 Most Innovative Companies 2010, Bloomberg BusinessWeek

R&D expenses and share of new products in

revenue4,5

4,1

3,5

3,0

2,1

0,6

0

1

2

3

4

5

From

20122006

40%

30%

0

2

4

6

8

10

0

10

20

30

40

2030

3,4

2020

2,1

2011

0,6

4%

% of new products in

revenueR&D expenses, $ bln

• Share of R&D expenses in the revenue the Corporation has reached the leading global technological companies

• The objective of the Corporation is to enter Top-20 leading innovative companies. That will require annual R&D

expenses at least at the level of 4,5% of revenue

• Taking into account growing R&D expenses Rosatom is planning to increase its share of new products in revenue up to

40% by 2030

www.rosatom.ru

Growth of NPP construction projects, development of foreign operations and assets are expected to support Rosatom global presence

7

Existing / under

construction

Potential projects

NPP of Russian design:

Capacities localization,

production development

Export of fuel cycle

products and services and

NPP services

Alliances/ strategic

partnerships

2030

25%

2011

8%

Share of revenue from foreign

operations

Agreements concluded

Tender / negotiations

Potential

May, 2012

78

1920

39

2030

50%

2011

33%

Share of revenue from foreign

assets

NPP construction project portfolio

on foreign markets (ЕРС and ВОО)

Russia

Argentina

Canada

USA

Australia

India

Turkey

Armenia

Kazahstan

ChinaJapan

Vietnam

Jordan BangladeshEgypt

South

Africa

Iran

South

Korea

Mongolia

Brazil

Eastern

Europe

Western

Europe

Malaysia

Indonesia

Saudi Arabia

Tanzania

Mexico

www.rosatom.ru

Rosatom will increase its power generation through construction of NPPs in Russia and BOO projects abroad

8

5 5

14 14

2030

65

46

BOO projects

abroad

New

construction

in Russia

36

Decommissioning

in Russia

15

2011

25

25

Rosatom nuclear installed capacitiesGW

• By 2030, nuclear generation share

in Russia will increase from 17% to

23%

• Confirmed BOO projects: Akkuyu

NPP in Turkey (4хVVER-1200)

• Potential BOO projects: Jordan,

Hungary, Slovakia, South Africa

Russia

ВОО abroad: confirmed projects

BOO abroad: potential

www.rosatom.ru

By 2030 Rosatom is expected to approach global leadership among nuclear generating companies by installed power capacity

9

TEPCO

Energoatom

Exelon

Kansai

KHNP

Rosatom

EDF 63

15

25

13

19

12

9

TOP-7 nuclear generating companies 2011,GW (NPP installed capacity)

Source: IAEA PRIS, Rosatom estimations

Rosatom

CNNC

CGNPC

KHNP

EDF

NPCIL

CPI

22

21

39

40

40

51-65

56-64

TOP-7 nuclear generating companies 2030,GW (NPP installed capacity)

www.rosatom.ru

Rosatom is increasing profitable resource base to provide NPPs under construction with fuel

10

47

6575

86

125

Denison Uranium OneCamecoERAPaladin

Uranium One (Rosatom foreign uranium assets) has the lowest production costs among public non-diversified uranium producers

Rosatom is increasing uranium reserves and resourceswith low production cost

Reserves and resources (000 tons)

with production cost < 80$ per kg

Production cost,

$ per kg

272

174

109

310

20102009 20112008

www.rosatom.ru

By 2030 Rosatom consolidated revenue can reach $75 bln

11

Revenue, bln USD (2010 prices)

2011

15

2020 20302006

8

fact forecast forecastfact

51%

12%

32%

2% 2%

46%

16%

22%

11%4%

48

75

48%

38%

7%5%

3%

60%32%

8%

New businesses NPP construction, nuclear power equipment

Front end of nuclear fuel cycleNuclear generation and electricity retail

Other revenue