August 28, 2018. Moscow, Russia. RusHydro Group (hereinafter referred to as the “Group”, ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces its condensed consolidated interim unaudited financial information prepared in accordance with International Financial Reporting Standards (IFRS) for the 2^nd quarter and 1^st half of 2018.

Key highlights for 2Q and 1H of 2018:

• Financial results reflected strong operational results driven by increased water inflows to major reservoirs of the Volga-Kama cascade and electricity production growth of RAO ES East subgroup’s facilities following increase in power demand;

• Total revenue in 2Q – RUB 92,219 mn (+9.4% y-o-y); in 1H – RUB 200,877 mn (+7.0% y-o-y);

• EBITDA increased by 32.4% in 2Q to RUB 28,212 mn; in 1H – RUB 59,949 mn (+16.3% y-o-y);

• Operating expenses increased in 2Q and 1H by 2.3% y-o-y and 4.3% y-o-y, respectively, mainly as a result of fuel cost increase;

• Net profit – RUB 36,688 mn (+64.5% y-o-y); adjusted net profit – RUB 38,432 mn (+19.0% y-o-y).

2Q and 1H 2018/2017 highlights (in RUB mn)

Operating results

Total electricity generation by RusHydro Group’s power plants reached 35,357 GWh (+3.2%) in the second quarter of 2018, in 1H – 67,372 (+6.0%). In 2Q of 2018 total electricity generation by RusHydro Group’s hydropower and pumped storage plants increased by 3.5% to 28,481 GWh, by the Group’s thermal power plants – by 2.3% to 6,943 GWh, while electricity generation by renewables decreased by 3.9% to 113 GWh as compared to the same period of 2017. In 1H of 2018 total electricity generation by RusHydro Group’s hydropower and pumped storage plants increased by 5.5% to 50,621 GWh, by the Group’s thermal power plants – by 7.7% to 16,525 GWh, while electricity generation by renewables decreased by 1.8% to 227 GWh as compared to the same period of 2017. Total electricity generation by Boguchanskaya hydropower plant ⁴ in 2Q 2018 amounted to 3,361 GWh (-5.9%), in 1H – 6,164 (-8.6%).

The underlying factors of the production change in January-June 2018 were:

• total water inflow to reservoirs of the Volga-Kama cascade in the second quarter of 2018 was lower than normal;

• water inflow to hydropower plants of Siberia and South of Russia – on the normal level;

• growth of electricity generation by thermal power plants in the Far East by 3.8% in the second quarter (to 10,205 GWh) following increase in consumption in the region;

• increase in electricity sales to China and UES of Siberia by 4.8% (to 894 GWh) as compared to the same period last year.

In the first half of 2018, heat output by thermal plants of RAO ES of East increased by 5.4% to 17,659 thousand GCal as compared to the corresponding period of 2017. The increase came on the back of lower temperatures in all the regions of the Far East with an exception of Chukotka Autonomous Okrug in the first quarter as well as increase in consumption. Decrease in heat output in the second quarter is driven by reduced length of heating season in a number of towns of the region compounded by higher air temperatures.

In the second quarter of 2018, total electricity output by RusHydro’s retail companies (JSC RusHydro, PJSC Krasnoyarskenergosbyt, JSC Chuvashskaya Electricity Sales Company, PJSC Ryazanenergosbyt) amounted to 4,524 GWh, a 1.8% decrease as compared to the same period of 2017, in the first half of 2018 – 10,516 GWh, insignificantly lower as compared to the corresponding period last year. The decrease in output is driven by record low output of PJSC Ryazanenergosbyt in May as well as negative performance of ESC RusHydro after cancelation of service agreement with customers.

Key events of the first half of 2018

• On February 7, 2018, RusHydro Group’s financial debt decreased by RUB 26 bn following exclusion of guarantee obligation between PJSC RusHydro and State Corporation Vnesheconombank on PJSC Boguchanskaya HPP loan given out by the bank in 2010. The lending bank supported the termination following completion of construction and ramp-up of the hydropower plant, and taking into consideration PJSC Boguchanskaya HPP’s stable financial and operational results and its ability to service the loan independently. As a result, the Group’s total debt load decreased significantly;

• On February 15, 2018, PJSC RusHydro has successfully placed loan participation notes (LPNs) issued by RusHydro Capital Markets DAC. RusHydro used the proceeds from the RUB 20 bn Eurobond issue to refinance its current loan portfolio and for general corporate purposes. The LPNs will mature in 2021 and bear an interest rate of 7.4% per annum. The following ratings have been assigned to the issue: S&P: “BB+” / Moody"s: ‘Ba1’ / Fitch: ’BB+’ / ACRA ‘AAA(RU)’;

• On February 27, 2018, Standard & Poor"s Global Ratings Services raised long-term corporate credit ratings on PJSC RusHydro to ‘BBB-’ with ‘Stable’ outlook. Short-term corporate credit was raised to ‘À-3’ respectively;

• On June 27, 2018, AGM of PJSC RusHydro elected new Board of Directors and approved 2017 dividends of RUB 0.0263335 per share in total amount of RUB 11.2 bn;

• On June 27, 2018, the Board of Directors approved divestment by PJSC RusHydro and its subsidiaries of shares held in PJSC Inter RAO in the total amount of 5,131,669,622.18 representing 4.915% of authorized share capital of PJSC Inter RAO to JSC Inter RAO Capital.

Revenue

Revenue breakdown in 2Q and 1H2018/2017(in RUB mn)

In the first half of 2018, total revenue of the Group increased by 7.0% to RUB 200,877 mn as compared to RUB 187,654 in the first half of 2017. The change is associated with the following key factors:

• increase in revenue from electricity (including government grants ⁵) of RAO ES East subgroup by RUB 8,256 mn on the back of tariff and sales volume growth;

• increase in revenue from electricity sales of PJSC RusHydro by RUB 4,042 mn due to production growth by hydroelectric plants following increased water inflows to reservoirs, primarily of the Volga-Kama cascade;

• increase in revenue of ESC RusHydro subgroup by RUB 1,819 mn as a result of higher and production and increase in tariffs;

• increase in heat and hot water sales revenue by RUB 1,426 mn following tariff and production volume growth;

• increase in capacity sales revenue by RUB 921 mn on the back of sales volume growth of PJSC “DEK” due to price increase;

• increase in other sales revenue of RUB 950 mn is mainly driven by increase in electricity distribution services in RAO ES East subgroup’s companies such as JSC DRSK, PJSC Yakutskenergo and PJSC Magadanenergo.

Following adoption of IFRS 15 standard from January 1, 2018, the Group recognizes revenue from compensation of transmission losses and expenses on power distribution under contracts with grid companies on a net basis (in 1H 2018 – RUB 4,184 mn including RAO ES East subgroup of RUB 1,573 mn and ESC RusHydro subgroup of RUB 2,611 mn).

Operating expenses⁶

Operating expenses in 2Q and 1H2018/2017(in RUB mn)

Total operating expenses in the first half of 2018 compared to the same period last year increased by 4.3% to RUB 154,075 mn due to the following factors:

• increase in fuel expenses mostly due to fuel cost increase of JSC DGK as well as increase in electricity and heat output of JSC DGK (+9% and +7%, respectively) as well as commissioning of Yakutskaya GRES-2 and Blagoveshenskaya TPP reaching full operating capacity as compared with the same period last year;

• increase in employee benefit expenses following indexation of salaries in accordance with existing collective agreements;

• increase in electricity distribution expenses of grid companies (excluding netted compensation of losses in grids) due to planned tariffs increase and higher volumes of electricity transmission following increase of useful output;

• increase in depreciation expense due to increase in value of property plant and equipment after commissioning new facilities (including JSC Yakutskaya GRES-2 with off-site construction in 2017 – 1Q 2018) as well as planned renovation and modernization of the Group’s facilities.

Profit

In the first half of 2018, EBITDA increased by 16.3% to RUB 59,949 mn compared to the same period of 2017.

The Group’s net profit increased by 64.5% to RUB 36,688 mn. Adjusted net profit in the reporting period amounted to RUB 38,432 – an increase of 19.0% as compared to the same period last year.

The difference between the reported and adjusted profit is attributed mainly to the following non-cash effects (before income tax) and recognition of change in fair value of the derivative financial instrument:

• gain arising on financial assets at fair value through profit or loss in the amount of RUB 3,673 mn (mostly shares of PJSC Inter RAO);

• financial expense in the amount of RUB 2,433 mn as a result of change in fair value of non-deliverable forward contract following decrease of market price of RusHydro’s shares in the reporting period;

• impairment of accounts receivable in the amount of RUB 2,404 mn resulting from analysis of expected losses;

• mpairment of property, plant & equipment in the amount of RUB 1,144 million.

Key indicators of financial position

As of June 30, 2018, the Group"s assets increased by RUB 32,756 mn or 3.2% to RUB 1,061,007 mn against the comparable figure as at December 31, 2017. Change in assets is primarily attributable to:

• increase in property, plant & equipment (following execution of the Group’s investment program);

• increase in accounts receivable.

As at the end of the reporting period, the Group"s liabilities increased by RUB 6,532 mn or 2.0% to RUB 339,219 mn as compared to December 31, 2017. The structure of liabilities has changed accordingly: long-term liabilities increased by RUB 29,602 mn following increase of non-current debt and short-term liabilities decreased by RUB 23,070 mn mainly due to decrease of current debt and current portion of non-current debt.

Structure of the liabilities of the Group underwent the following changes:

• in February 2018, RusHydro has placed eurobonds in the amount of RUB 20 bn issued by RusHydro Capital Markets DAC with a maturity of 3 years and a coupon rate of 7.4%. The proceeds of the issue were used to refinance the Group’s current loan portfolio;

• in March 2018, the Group has repaid long-term loan from PJSC Sberbank in the amount of RUB 10,613 mn.

The fair value of the non-deliverable forward contract, recognized under the terms of transaction with PJSC VTB Bank, increased from RUB 20,716 mn (as of December 31, 2017) to RUB 21,536 mn (as of June 30, 2018).

The main reason of the change in fair value of the forward contract is the local dynamics in the change of market price of RusHydro’s shares in the first half of 2018.

Events after the reporting date

• On August 1, 2018, Fitch Ratings Ltd. raised PJSC RusHydro’s long-term foreign currency issuer default rating to ‘BBB-’ from ‘BB+’ with ‘Stable’ outlook. Fitch quoted the Company’s solid financial and operational performance, reduction of debt aided by high level of government support;

• On August 7, 2018 the Board of Directors re-elected Deputy Chairman of the Government of the Russian Federation – Plenipotentiary Representative of the President in the Far Eastern Federal District Yury Trutnev as its Chairman and elected members to the Committees of the Board of Directors.

The full financial statements are available on the Company’s website at: https://www.eng.rushydro.ru/investors/reports