If you want to invest in Hidroelectrica, you have to consider risks, some political and some environmental. This can affect investment and profitability.

What we write below is taken from the prospectus. There you have more detailed information about each individual risk, as well as examples.

1. Changes in government regulations or policies, in particular as a result of increased levels of government intervention in the electricity market, may have significant negative consequences for business.

Decisions by the Government and regulatory bodies regarding the generation and supply of electricity and, in particular, the permitted prices for the purchase and sale of electricity may affect revenues.

2. The Group may not be able to successfully implement its development plan

The Group may not be able to implement its development plan for its hydropower projects, which are currently at various stages of implementation, subject to legal, development and execution risks.

The Company’s investment plan until 2027 includes hydropower projects currently in various stages of implementation, with an estimated total installed capacity of 206 MW and an average production

annually approximately 700 GWh/year. There can be no assurance that the Group’s development plan will be achieved or, if achieved, will have the intended result. Projects may be terminated or suspended, and project scope and timing may change.

Hidroelectrica may not be able to implement its development plan in connection with the development or acquisition of new green energy projects or other M&A targets. If implemented, these projects may not achieve the expected results and expose the Group to risks related to the acquisition, development and operation of renewable energy projects, as well as to increased operating costs.

Reconstruction and modernization of the Group’s hydropower facilities is subject to development and legal risks.

3. The production of electricity and the demand for the produced electricity depend on climatic conditions, which may be independent of the will of the Group.

At the same time, climate change and episodes of adverse weather conditions can have a negative impact on production equipment (introduced and planned to be introduced).

4. The Group’s performance may be affected by fluctuations in electricity prices.

The Group’s revenues and profitability depend on fluctuations in electricity prices on the wholesale and retail markets.

Electricity prices are set in accordance with the demand for electricity from end users, the supply of electricity from network generating assets, as well as the connection capacity with neighboring countries and the market situation in them. In cases where the Company chooses to sell on the open market, it assumes the corresponding risk of price fluctuations in the electricity market.

5. Hidroelectrica is subject to increasingly strict and complex environmental and water management regulations, and may be subject to significant liabilities in the event of any non-compliance with these regulations.

Energy production can cause damage to the environment, such as accidental pollution a

water with oil products, negative impact on environmental factors and energy losses due to the obligation to provide ecological flow.

Thus, given the specific risks of energy production, Hidroelectrica is subject to numerous international, national and local environmental laws and regulations that become

increasingly burdensome.

6. It is possible that the Company will not be able to fulfill the recently introduced legal obligations regarding the management of water resources.

In accordance with the National Management Plan and Article 53(4) of the Law on Water No. 107/1996 (the “Water Law”), dams or water intake structures located on watercourses must be provided with installations/structures that ensure a servitude flow downstream (consisting of an ecological flow and a minimum flow required for downstream users) , as well as, if necessary, with structures to ensure the migration of aquatic fauna (especially ichthyofauna).

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