DRAFT

2Fortum Customer Value propositionNDL

Fortum is a $9B Finnish company currently operating in European countries and Russia

FORTUM IS A POWER AND HEAT COMPANY OPERATING OUT OF EUROPE AND RUSSIA

Fortum operations

• Amongst leading power producers in Europe and Russia; scale presence across 9 countries including Nordic region, Russia, Poland, Baltics

• World’s 4th largest heat producer

• Distributes electricity to a strong base of 1.6 million industrial and private consumers

• Deep experience in operating thermal, renewable, hydro and nuclear plants

• Frontrunner in environmental sustainability; has one of the lowest carbon exposures amongst European power generation companies

FORTUM IS PUBLICLY LISTED AND HAS CONSISTENTLY SHOWN STRONG FINANCIAL

PERFORMANCE

3Fortum Customer Value propositionNDL

Fortum operates across three industry verticals with leading market position in co-generation

business verticals

Power(Sales*: $3.6B)

Heat(Sales*: $2.4B)

Electricity solutions&distribution(Sales*: $3.7B)

*Segment revenues shown for 2010, using average exchange rate during 2010; Overall group revenue of $8.4B includes Russia division sales ($1.1B), and intersegment eliminations ($2.3B)

**Includes plants in Europe and plants operated in Russia by OAO Fortum (wholly owned subsidiary)

• Power generation, trading and expert services for power producers

• Operates more than 250 plants in Europe; hydro, nuclear, thermal

• Total generation capacity of ~20 GW; ~3GW capacity addition planned by 2014

• Second largest power producer in the Nordic countries

• Co-generation - providing B2B heating solutions, district cooling and heating

• Operates 31 plants** across 8 countries; 4 additional plants utilizing biofuels/waste under construction in Europe, 8 plants in Russia using gas

• Focuses on energy-efficient generation by operating co-generation plants for power and heat

• Significant focus on co-generation in R&D (total R&D spend ~$35M), focusing on combustion and alternative fuels (e.g. pyrolysis)

• Power sales to industrial, private consumers and other electricity retailers; Operation of local and regional distribution networks

• Leading operator in power distribution in the Nordics

• Second largest electricity sales company in the Nordics

• Heavily investing in a reliable and smarter grid in the Nordic region

4Fortum Customer Value propositionNDL

Fortum’s mission, strategy and values

Strategy

Fortum’s purpose is to create energy that improves life for present and future generations. We provide sustainable solutions that fulfill the needs for low

emissions, resource efficiency and energy supply security, and deliver excellent value to our shareholders.

Mission

Create solid earnings

growth in Russia

Leverage the strong

Nordic coreBuild platform for

future growth

Competence in CO2-free hydro, nuclear and energy efficient CHP production and energy markets

ACCOUNTABILITY CREATIVITY RESPECT HONESTY

Values

India growth platform

Established local presence

with immediate priority on power and heat supply to industrial

users(co-generation)

5Fortum Customer Value propositionNDL

Cogeneration is a cornerstone in Fortum’s strategy

• CHP is competitive; one plant, multiple products

• CHP is scalable; economically viable even in smaller scale

• CHP is resource efficient; high primary fuel efficiency, less emissions

• CHP has fuel flexibility; potential to use localfuels, e.g. biomass, municipal waste

• CHP has large potential for further growth

Fortum believes CHP will be an enabler of future sustainable society

6Fortum Customer Value propositionNDL

Cogeneration improves efficiency for power and steam generation

Overall process efficiency higher at up to90% compared to separate generation for power (~35%) and steam (~70%)

CustomersCustomersCustomersSteam using

industries

Industrial steam

Fuel

Boiler

High pressure

steamPowerTurbine Generator

Condenser

State grid

Efficient use of resources

One plant –multiple products

Close to use –Security of

supply

High-efficiency –less emissions

and wastes CO-GENERATION

7Fortum Customer Value propositionNDL

Fortum’s proposed model of consolidated cogeneration in an industrial cluster has multiple benefits

PROPOSED MODEL: CONSOLIDATED CO-GENERATION

CURRENT MODEL: MULTIPLE BOILERS AT CUSTOMER LOCATION

Paper & pulp Chemical

Food processingTextile Rubber

Pharma

State grid

Steam processing unit DG set

Paper & pulp Chemical

Food processingTextile

Pharma

State grid

Rubber

Reduceemissions and

wastes

Increase poweravailability

Optimizeinvestments on

equipment and land

FortumCHP

8Fortum Customer Value propositionNDL

Fortum’s solution offers four key customer advantages

ImprovedOp-ex

Fortum CHP

OptimizedCap-ex

EffectiveOrg.

Reliable supply of steam & power at competitive rates

Lower investments on

equipment

Better utilization of plant’s land area

Efficient deployment of

plant employees

A

B C

DSustainableprocesses

Optimal, consolidateduse of limited natural resources

(fuel, land and water)Improved waste

handling and lower

emissions

Avoid hassles in obtaining

emission, boiler clearances, etc.

Better focus oncore activities

of the organization

9Fortum Customer Value propositionNDL

Fortum’s solution saves money by reducing operating expenditure and initial capital investments

Competitive costs

24x7 reliability as per specifications

No need for expensive power backup options (DG sets)

Illustrative customer plant schematic marking equipment, and land that can

be freed

LOWER OPEX LOWER CAPEX

Lower investments on equipment- Boiler- Waste handling- DG sets

- Waste handling operations- Boiler operations

- Fuel procurement

Steam

Power

Organization

A B

Efficient deployment of employees currently in:

Competitive costs

Utilize freed up land area for core business, e.g. required capacity expansions in future

10Fortum Customer Value propositionNDL

Fortum’s solution also improves customer‘s’ organizational effectiveness and overall sustainability levels

D IMPROVED ENVIRONMENTAL SUSTAINABILITYIMPROVED ORGANIZATION EFFECTIVENESS

Easier procurement and commissioning process due to reduced number of equipment

Avoid hassles in obtaining clearances for power & steam generation (such as, boiler clearance)

Increased focus on core activities; better utilization of organization’s financial resources

Construction stage

Operationstage

C

Resource utilization

Emissionsand wastes

Less waste generation; handling & disposal away from plant

Lower emissions in cluster compared to aggregate of individual boilers

Better air quality in plant’s vicinity

Efficient, consolidated use of limited natural resources (land and water)

Optimal fuel usage due to higherfuel efficiency

Insulation from external factors (such as fuel price fluctuations)

11Fortum Customer Value propositionNDL

Consolidated cogeneration can provide several financial& strategic advantages for steam using industries in an industrial cluster

ADVANTAGESCOAL-

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