Investment principles

The Company’s investment policy and adoption of decisions related to it are based on the following principles:

 - Investment decisions and the project’s compliance with legislatively established requirements, building codes and environmental standards;

 - Following the sequence of steps and stages for investment project implementation;

 - Investment decisions and the project’s compliance with requirements on profitability and risk, established by the Company’s Board of Directors;

 - Analysis of costs and benefits for alternative investment decisions at the end of each investment project stage when basic parameters change;

 - Funding sources available for all investment projects.

 - Under its Investment Program, the Company invests in the generation facilities where the internal rate of return on investment exceeds 10%.

The Company’s investment activity is regulated by a single consolidated document – the Regulations on the Investment Management Process in the Form of Capital Investments (approved November 30th, 2010).

Approval of the Company’s investment program is the responsibility for the Company’s Board of Directors.

At the same time, in accordance with the Procedure for Formulating, Agreeing on and Approving Investment Programs for Electric Power Engineering Entities as a Government-linked Company, the investment programs, before being approved by PJSC RusHydro’s Board of Directors, are agreed upon with executive authorities and approved by the Russian Ministry of Energy (in accordance with Government Decree No. 977 of December 1, 2009 on Investment Programs of Energy Industry Constituents (as amended and restated on December 29, 2011)).