Denis Fedorov
Chairman of the Board of Directors of OGK-2 JSC
Address by the Chairman of the Board of Directors of OGK-2 JSC

Dear shareholders,

In 2020, OGK-2 JSC overcame with dignity all the challenges associated with the difficult epidemiological situation; the Company’s power plants operated in a continuous mode, providing for a full-fledged power supply to consuming enterprises involved in the fight against coronavirus infection, medical institutions and critical infrastructure facilities in the regions of our operations.

Efficient management and stable operation of the power plants had a positive influence on the Company’s financial performance: net income according to IFRS grew by more than 10% and there was an increase in operating profit and EBITDA.

In the reporting year, the implementation of the scheduled key projects continued. The construction of Svobodnenskaya TPP to be operated by OGK-2 proceeded in accordance with the developed schedule. In December 2020, natural gas from “Power of Siberia” gas pipeline was provided into the plant for pre-commissioning works, and as early as the second half of April 2021, steam supply to the Amur Gas Processing Plant began. Works are still being performed to renew the heating section at Kirishskaya GRES, and design works are underway on Units Nos. 13 and 16 at Surgutskaya GRES-1 under the new state-run capacities renewal program. We intend to participate in future competitive selection procedures, involving other generating facilities operated by OGK-2 JSC.

In 2020, strategically significant deals were entered into. For example, Adlerskaya TPP was transferred to the Company’s ownership, that will reduce costs incurred in the course of the energy facility operations. What is more, in the second half of 2020, the sale of Krasnoyarskaya GRES-2 was completed, and a new owner has been operating the plant since October 2020. A reduction in the share of coal-fired generation by OGK-2 had a positive influence on the level of environmental impact, particularly in terms of emission of pollutants into the air and generation of ash and slag waste.

Within the scope of the inefficient equipment decommissioning strategy, the Company reduced the amount of coal combusted by 31%, gas – by 15% and fuel oil – by 19%. As a consequence, greenhouse gas emissions decreased by almost 20% compared to 2019. The results achieved confirm the Company’s commitment to purposeful activities in the environmental segment.

Major international rating agencies also acknowledge the financial soundness and reliability of OGK-2 operated by Gazprom. Thus, in 2020, Fitch enhanced the outlook of OGK-2 JSC from Stable to Positive for long-term IDRs in foreign and local currencies at BBB- level. Short-term ratings in foreign and local currencies were confirmed at the F3 level. Furthermore, the long-term rating of priority unsecured bonds in national currency at BBB- level was confirmed in respect of the bonds of OGK-2 JSC. Expert RA enhanced the creditworthiness rating of OGK-2 JSC at ruAAA level with the Stable outlook.

OGK-2 JSC is ranked among the leaders in the electric power market, demonstrating strong financial performance. The Company’s management makes efforts to ensure sustainable and efficient operations, that is reflected in the financial performance and allows for steadily increasing dividend payments in the interests of the shareholders. Together, we will continue implementing the strategy of Gazprom in the electrical energy industry, approved till 2027, strengthening our competitive advantages!

Artyom Semikolenov
Managing Director of OGK-2 JSC
Address by the Managing Director of OGK-2 JSC

Dear shareholders,

2020 was a challenging year for the entire domestic energy industry and the country in whole. OGK-2 JSC successfully ensured the operation of power facilities without losing momentum and despite the epidemiological obstacles. Last year was marked by the 15th anniversary of OGK-2. Over the years of its operation the Company originally established on the basis of five power plants, has transformed into one of the country’s largest energy holdings, while increasing efficient capacities, implementing work-improvement projects and initiatives and striving for new achievements.

Our company has expanded its territorial boundaries by one more region. The new power facility to be operated by OGK-2, Svobodnenskaya TPP, provides for new jobs and a reliable power supply to the Amur Gas Processing Plant – a highly significant project for Gazprom.

We continue implementing key investment projects. Between 2020 and 2025, Kirishskaya GRES is undergoing a large-scale renewal of the power plant’s heating section. This is necessary to provide for the supply of thermal energy in the form of hot water and steam to consumers in the long term. The project will ensure a reliable supply of heat to the region’s petrochemical cluster. A substantial volume of work has already been performed as part of the reconstruction of TG-2T turbine rated at 60 MW. In 2021, the main equipment for this facility will be delivered, and in 2022, it will be commissioned.

In 2020, we proceeded to an active phase of the construction of the start-up and heating boiler plant at Troitskaya GRES, which will become a major step towards optimizing production and decommissioning inefficient assets that have exhausted their lifespan. This will undoubtedly have a positive impact on the environmental situation in the region.

In confirmation of the company’s contribution to environmental protection, OGK-2 was ranked third in the World Wildlife Fund’s (WWF) rating of environmental information transparency among generating companies operating in the territory of Russia. Leadership in such a rating is a quality mark that reflects the Company’s social and corporate responsibility and demonstrates conscious use of natural resources and environmental friendliness. Our environmental policy is based on the principles of safety, reliability, efficiency and transparency. The environmental management system at OGK-2 is of a high level, and we will undoubtedly continue to improve in this area.

High production and financial performance achieved by OGK-2 is the result of endeavors undertaken by thousands of people who work in different parts of our country – from the Far Eastern to the North-Western Federal Districts. The Company creates the most comfortable conditions for each employee and provides for a decent level of welfare and benefits. At the end of 2020, we signed a new Collective Agreement for the period from 2021 to 2023. Today, we are implementing high standards of social policy, and I am grateful to all our employees for their highly professional work.

The management of OGK-2 is focused on solving tasks that will ensure the growth of the Company’s capitalization and investment attractiveness, and are strategically important for enhancing the quality, reliability and efficiency of power supply to consumers. Currently, OGK-2 has a strong resource base, professional management of production processes, and a highly involved workforce. We will continue pursuing our strategic course aimed at increasing the Company’s financial performance and shareholder value!