Announcement

Electrica Attracted EUR 171 mil. Non-Reimbursable Financing Through the Modernisation Fund

Electrica announces its shareholders and investors that its subsidiary Distributie Energie Electrica Romania (DEER) has attracted EUR 171 mil. non-reimbursable financing through the Modernisation Fund, representing 80% of the eligible expenses for seven more new investment projects in the electricity distribution network, projects whose total estimated value is approx. RON 266 mil. (without VAT).

For the part of ineligible costs, according to the Methodology for setting distribution tariffs, for fixed means related to investments in distribution networks made with own funds within projects co-financed by European non-reimbursable funds, put into operation starting from 1 February 2021, an incentive is established in the amount of 2 percentage points above the approved regulated rate of return.

These projects complete the list of the 6 investment projects for which DEER attracted about EUR 82 million through the Modernisation Fund (Electrica sent to the capital market two communications on June 30 - IRIS code 4EB49, LSE RNS code 5930E, June 19, 2023 - IRIS code 647D5, LSE RNS code 1969D, November 29, 2023 - IRIS code DA125, LSE code RNS 1065V). Regarding the status of these 6 projects, 3 projects are in execution, 2 projects are in the acquisition phase, and 1 project is in preparation for acquisition.

Thus, DEER has so far attracted about a quarter of a billion EUR from the Modernisation Fund, approximately 42% of the total financing already signed on the Modernisation Fund, with another 17 submitted projects.

"Through the Group-wide strategy, we aim to maximize the performance of the managed infrastructure and to accelerate the digital transformation of the business. This success represents a significant step in achieving our strategic objective of substantially increasing access to non-reimbursable funds for our investments. We congratulate our colleagues for this success and encourage them to continue at the same pace", said Alexandru Chirita, CEO of Electrica.

Three of the projects, totalling about EUR 161 million, of which approximately EUR 105 million are non‑reimbursable funds, are for the implementation of the intelligent electricity metering system at the level of county capital cities in all areas covered by DEER, and involve both the installation of about 1.18 million smart meters for users located in county residence cities, as well as the modernisation of a number of 327 transformer substations with installation of distribution transformers with load adjustment (thus facilitating the connection of prosumers).

The other 4 projects, totalling EUR 104.86 million, of which EUR 66.13 million non-reimbursable funds, will be carried out in Sibiu, Galati and Dambovita counties and aim at modernising and building new electricity distribution networks on all voltage levels, modernising transformer stations, implementing digitization and smart metering systems.

More details can be found in the following table:

* The maximum value financed through the Modernisation Fund does not include VAT (ineligible, being considered contribution of the beneficiary)

Note: the values ​​in EUR were estimated at an exchange rate of 4.9604 RON/EUR

The Modernisation Fund is a financing instrument that contributes to the objectives of the European Climate Pact by supporting a socially just transition towards a green economy. More details about the Modernisation Fund can be found on the official websites:

·    https://modernisationfund.eu/ (only in English)

·    https://oportunitati-ue.gov.ro/program/fondul-pentru-modernisare/  (in Romanian and English)

·    https://energie.gov.ro/category/fondul-pentru-modernisare/ (only in Romanian)

Contact details:

Electrica Investor Relations

E-mail: [email protected]

Telefon: +40 731 796 111

CEO

Alexandru-Aurelian Chirita