INVESTMENT ACTIVITIES

GRI 203-1

Investment activities are aimed towards augmenting the reliability and enhancing the operation of the power grid complex, as well as reducing losses in electric gridsThe final draft of amendments to the investment programme of PJSC Rosseti South for 2023 was approved by Order No. 13@ of the Ministry of Energy of the Russian Federation dated 8 December 2023 “On approval of the investment programme of PJSC Rosseti South for 2024–2028 and amendments to the investment programme of PJSC Rosseti South approved by Order No. 31@ of the Ministry of Energy of the Russian Federation dated 24 November 2022”..

INDICATORS FOR INVESTMENT ACTIVITIES

The majority of investments made within the area of grid connection operations went towards executing the agreements for the grid connection of a privileged group of customers with connected capacities of up to 15 kW. The amount of funding for these activities in 2023 totalled RUB 2,125.76 million, or 62% of the total funding for grid connection.

The main volume of investment activities related to renovation, upgrade and retrofitting included financing of measures for development and upgrade of electricity (capacity) metering, namely RUB 936 million, or 56% of the total retrofitting and upgrading financing.

In order to monitor progress in implementing investment programmes and priority investment projects, Rosseti adopted Order No. 165r dated 31 March 2023 “On Approval of the List of Priority Facilities to be Implemented at Rosseti’s S&As and Other Controlled Entities” to approve the list of priority facilities of Rosseti’s S&As for 2023.

In 2023, the majority of the funding for investment projects went into two categories of initiatives:

• grid connection – RUB 3,431 million (VAT included), or 63% of total investments
• renovation, upgrade, modernisation, retrofitting – RUB 1,658 million (VAT included), or 31% of the total funding

Funding of the investment programme by source for 2023:

Long-Term Investment Programme

The Investment Programme of PJSC Rosseti South for 2024–2028 was approved by Order No. 13@ of the Ministry of Energy of the Russian Federation dated 8 December 2023.

The Long-Term Investment Programme for 2024–2028 envisages capital investment of RUB 14,159 million, excluding VAT, financing of RUB 18,687 million, including VAT, commissioning of fixed assets of RUB 14,439 million. Between 2024 and 2028, it is planned to re-build and renovate 2,114 kilometres and commission 345 MVA of transformer capacity.

CAPITAL CONSTRUCTION QUALITY CONTROL

In order to verify compliance of the works performed with the design documentation, requirements of technical regulations, results of engineering surveys, requirements of the town-planning plan of the land plot in the process of construction, renovation, overhaul of capital construction facilities In accordance with Article 53 of the Town-Planning Code of the Russian Federation under Resolution No. 468 of the Government of the Russian Federation dated 21 June 2010 “On the procedure for construction control during construction, renovation and overhaul of capital construction projects”. , the Company carries out construction supervision Regulated by the Procedure for Construction Control at Power Grid Facilities of PJSC Rosseti South approved by Order No. 174 of PJSC Rosseti South dated 10 March 2020..

With timely and full maintenance and repair, power grid assets at the Company’s branches were successful prepared for peak loads in the autumn and winter period and consumers within Rosseti South’s area of responsibility enjoyed reliable power supply.

Preparedness to respond to potential process-related faults

Regardless of the time of year and weather conditions, Rosseti South’s employees are prepared to respond to potential process failures: 672 teams (3,427 people, 1,686 units of equipment), including 44 mobile teams (266 people and 116 units of equipment), are prepared for emergency recovery work and large-scale outages, and can be sent out to help other subsidiaries and affiliates of PJSC Rosseti, if necessary. Moreover, 209 emergency repair crews of contractors can be involved in power supply restoration. There are 334 reserve power supply sources with a total capacity of 13.9 MW.

Training in natural and man-made emergency prevention and response is arranged on an ongoing basis with the involvement of 100% of the management and other personnel of PJSC Rosseti South.

Eight joint exercises were held with the headquarters for ensuring the security of electricity supply in the constituent entities of the Russian Federation, territorial executive authorities and local governments, the Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters, and housing and utilities organisations to practice emergency response skills.