#1TENAGA NASIONAL Better. Brighter. TENAGA NASIONAL BERHAD INVESTOR PRESENTATION Prepared by IR Holding unit, CoE Investor Relations department, Group Finance#2A LEADING UTILITIES COMPANY IN MALAYSIA We ranked 1st in Malaysia for Utilities company and 5th in KLCI with a market cap of RM52.9bn* Hydro United Kingdom Turkey Saudi Arabia Kuwait India Wind Solar Biogas/ Biomass Gas Coal Oil Operation & Maintenance Generation Business (Group) Total Installed Capacity: 23,896MW* 5% 14% 36% 45% Coal Gas RE Oil Note: 1. 2. RE inclusive large hydro and small RE Data is based on gross installed capacity (exclude SESB) TNB Grid & Retail Business (Peninsular Malaysia) Transmission length: 27,548 KM Substations: 510 System Minutes: 0.09 Distribution Network: 703,312 KM Substations: 85,127 丰 Z SAIDI 32.38 minutes Retail customers: 9.5 mil CSI**:86% Main Subsidiaries TNB GENCO TNB REMACO A subsidiary of Tenaga Nasional TNB RESEARCH Malaysia * As at Nov 2021 **CSI: Customer Satisfaction Index SESB (1993000482) allo! The Smarter Connection GSPARX TNB ENGINEERING CORPORATION 2#3OUR FINANCIAL PERFORMANCE REMAINS RESILIENT REVENUE (RM mil) 33,651.7 +9.6% 36,894.4 9MFY'20 9MFY'21 EBITDA (RM mil) 13,765.2 PROFIT AFTER TAX (RM mil) +4.6% +19.0% 14,392.7 2,872.2 2,414.6 9MFY'20 9MFY'21 9MFY'20 9MFY'21 OUR DOMESTIC NETWORKS ACHIEVEMENT WITH LOW SYSTEM MINUTES AND SAIDI ARE AMONG THE BEST IN THE WORLD Equivalent Plant Availability Factor (EAF) (Generation) 83.84% 9MFY'20: 88.28% 2021 Target: 86.1% System Minutes (Transmission) 0.09 mins 9MFY'20: 0.05 mins 2021 Target: 2.0 mins SAIDI (Distribution Network) 32.38 mins 9MFY'20: 33.90 mins 2021 Target: 55.0 mins 3#4A RESILIENT FINANCIAL PERFORMANCE AND ROBUST CAPITAL MANAGEMENT HAS AFFORDED US TO CONTINUE REWARDING OUR SHAREHOLDERS WITH ATTRACTIVE DIVIDENDS DIVIDEND POLICY We will continue to honour our dividend policy of 30% to 60% dividend payout ratio, based on the reported Consolidated Net Profit Attributable to Shareholders After Minority Interest, excluding Extraordinary, Non-Recurring items Statistic 56% 59% 56% 7.5% 7.7% 53% 3.9% 50.0 40.0 30th Sep '21 31st Dec❜20 23.0 20.0 18.0 2.2% Total Debt (RM Bil) 49.1 49.5 30.3 30.0 22.0 22.0 Gearing (%) 46.3 46.3 Note: Net Gearing (%) 35.4 33.7 Dividend yield for 1HFY2021 is based on 6-month basis with share price as of 30th June 2021 FY2018 Interim dividend per share (sen) Dividend Payout ratio (%) (based FY2019 FY2020 Final dividend per share (sen) on Adjusted Group PATAMI and Dividend Yield 1HFY2021 Special dividend per share (sen) excluding special dividend) 4#5WE BELIEVE OUR SUSTAINABILITY PATHWAY WILL OPEN UP NEW GROWTH OPPORTUNITIES WHILST REMAINING TRUE TO OUR CORE ROLE Aspire to achieve Net Zero emissions by 2050 Our 8,300 MW RE Target by 2025 - Build scale in renewable generation Our Commitment to 2035 - Emission intensity reduction by 35% through significant renewable generation growth and 50% reduction in coal generation capacity Our Aspiration to 2050 - Invest and grow our emerging green technologies, achieve net zero and coal-free by 2050 Renewable Capacity (MW) Increase RE Capacity to 8,300MW by 2025 14% 3,475 708 2,767 RE Nov 2021 International 31% 8,300 RE 2025 Domestic % of TNB's RE Reduction of emission intensity of 35% by 2035, and Net Zero emissions by 2050 GHG emission Intensity (tCO2/MWh) 0.57 Net Zero by 2050 +35% 0.37 Base Year (FY2020) 2035 Coal capacity (MW) Reduction of coal capacity of 50% by 2035, and 100% by 2050 100% +50% 7,680* 4,010 Base Year 2035 (FY2020) 0 2050 Note: * Peninsular Malaysia's coal plants, gross capacity TNB targets not to take any new stake in new coal plants and will honor the existing PPAs TNB is committed that revenue from coal does not exceed 25% of Group revenue Emission intensity (tCO2e/MWh) = Annual Emission (million tCO2e) / Annual Energy Generated (MWh) 5#6IN 2016, WE EMBARKED ON OUR REIMAGINING TNB JOURNEY TO PREPARE FOR DECARBONIZATION, DECENTRALIZATION, DIGITALIZATION AND DEREGULATION TO BE A LEADING PROVIDER OF SUSTAINABLE ENERGY SOLUTIONS IN MALAYSIA AND INTERNATIONALLY Future Generation Sources 2025 EBIT Target : RM5.Obil Main Initiatives: ☐ Growing TNB's renewable capacity Expansion of capacity into selected international strategic markets with strong growth prospects Improving performance of existing thermal generation fleet 2021 Focus: ■ Improve the performances of existing assets Operationalisation of RACO & ReDevCo ■ Acquire our first off-shore wind assets with a strong partner and aim to build expertise in this technology and beyond. Explore SEA for RE expansion Grid of the Future 2025 EBIT Target: RM6.1bil Main Initiatives: Leveraging on innovation across the network to support our Energy Transition Upgrading our existing network infrastructure into a smart, automated and digitally enabled network Optimising our network's productivity, efficiency and reliability 2021 Focus: ☐ Achieve the Smart Meter installations targets RAB Expansion by utilizing the allowed CAPEX on Grid modernization Project Reduce System Losses Winning the Customer 2025 EBIT Target: RM0.7bil Main Initiatives: ☐ Enhance our customer's experience through all customer journeys for service, interaction communication channels and Growth through innovation of new sustainable customer solutions Strengthen digital presence via digital solutions, interactions and enterprise 2021 Focus: ☐ Enhance customer service by ensuring our customer's experience is a seamless interaction with TNB from the start to the end through Network of Teams models Expansion of rooftop solar PV Future Proof Regulation Main Initiatives: ☐ Working together with key stakeholders towards a stable and sustainable regulatory landscape 2021 Focus: RP3 Proposal Approval Shape TNB's sustainability agenda 6#7DELIVERING SUSTAINABLE RETURNS VIA IBR MECHANISM SINCE 2014 Regulated entities under Incentive Based Regulation (IBR) Ring-fenced entities 4. 7. 무 Regulated business made up more than 70% of the overall Group earnings. 費 Single Buyer Single Buyer Generation Actual Operations Grid System Operator Transmission Distribution Network Customer Services/Retail ☐ Regulated Revenue Price cost cap cap The IBR mechanism provides: Clear and transparent regulatory framework Consistent and clear returns Shield against uncontrollable swings Incentives for operational efficiencies (Please refer appendix section for further details) entities' earnings are guaranteed based on approved electricity demand growth as stipulated by the IBR guidelines. ☐ Risks such as fuel price and forex volatility has been taken up through the Imbalance Cost Pass-Through (ICPT) mechanism which is being reviewed every six months. Note: i. Revenue cap: Allowed annual revenue based on approved demand growth. Any excess/shortfall is adjusted through revenue adjustment mechanism. ii. Price cap: Any excess/shortfall of revenue made due to higher/lower average selling price compared to base tariff is adjusted through revenue adjustment mechanism. 7#8INCREASED CAPEX INVESTMENTS IN OUR GRID DIGITALIZATION IS KEY TO MALAYSIA'S ENERGY TRANSITION AMBITION, FURTHER FUTURE-PROOFING OUR REGULATED BUSINESS Regulated businesses spends on average 16% of its CAPEX towards supporting Energy Transition (ET) Regulated CAPEX to support Energy Transition CAPEX for ET +7% 12.3% 19.3% 87.7% 80.7% Towards becoming a Smart Utility by 2025 Our target: Achieve Smart Grid Index (SGI) of 85% by 2025 A smart utility will enable us to deliver a reliable and high quality grid with bidirectional energy flow to accommodate intermittent RE generation, EV and distributed generation in supporting ET. Our regulated CAPEX related to enabling ET is expected to increase from 12.3% to 19.3% through our proposed RP3 initiatives. Continued investment is crucial in developing a robust grid system to ensure supply reliability while embracing our sustainability agenda Major projects related to ET Advanced Metering Infra. (AMI) Smart meter program enables customer to have an improved access and management to their energy consumption. It also improves operational effectiveness by reducing response time, automating processes and improving data accuracy. ☐ Smart meters installation progress: 86% (as at Oct'21) 0% 100% (1.8 mil units by end 2021) ☐ Replacement of traditional high pressure sodium vapor (HPSV) street lightings with light emitting Diode (LED) which are cost efficient (longer lifespan), lower electricity consumption and more environmental friendly. LED street lightings replacement progress: LED Relamping 0% Volt-Var Optimisation (VVO) 89% (as at Oct'21) 100% (650,000 units by end 2021) ☐ VVO is an advanced application that runs periodically or in response to operator demand, at the control center for distribution systems or in substation automation systems. VVO optimally manages system-wide voltage levels and reactive power flow to enhance network efficiency and reduce power losses at both transmission and distribution network level ☐ The installation focuses on identified locations within Peninsular Malaysia that have the required reactive power demand. The current progress: 0% 82% (as at Oct'21) 100% (560 MVAR by end 2021) AVG RP2 + RP2 Extension (2018-2021) Approved AVG RP3 (2022-2024) Proposed Note: TNB SGI 2020 score: 62.5% (55th place) Advanced Distribution Management System (ADMS) ☐ ADMS is a new technology which will replace the current ageing SCADA master system. ☐ The new system will be able to support new functions and requirements for Grid of the Future e.g. integrated & automated outage restoration system, volt-var optimization, optimize distribution/grid's performance 8#9GLOBAL RE EXPANSION; A VITAL MOVE TOWARDS ACHIEVING OUR SUSTAINABILITY COMMITMENTS 100% stake in VANTAGE RE GLOBAL FOOTPRINT 30% stake in GAMA Acquisition: 2016 Capacity: 853MW in gas, 131.5 in Hydro, 117.5MW in wind & 100mcm p.a. water conveyance (in Jordan) 6% stake in SHUAIBAH • Acquisition: 2005 • Capacity: 1,190MW in IWPP & water desalination of 375.95mcm p.a. New Energy Division established to advance international business commitments on: Defocusing on India and Pakistan through divestments. Expansion of RE in targeted markets, includes the UK, Europe and SEA. Strategic partnership with one of the leading RE players to leverage on their technological expertise. Acquisition of 49% stake in 41.5MW Blyth offshore UK wind farm in October 2021 • Marks TNB's maiden entry into UK offshore wind market, showcasing TNB's capability and commitment to its Sustainability Pathway aspiration. • Strategic partnership with EDF, capitalising on EDF's vast experience & capabilities in RE for future growth. • Formation: 2021 . Capacity: 26.6MW in wind, 365MW in solar 100% stake in TRE • Formation: 2018 . • Growing TNB's utility business in SEA specifically in Singapore & Vietnam 30% stake in GMR • • Acquisition: 2016 • Capacity: 1,650MW in coal, 388MW in gas & 26MW in solar INTERNATIONAL BUSINESS STRATEGY Ground Zero Value Protection & Value Creation for existing assets Part of this strategy involves : Growing TNB's International RE business. Focused market in UK, Europe and SEA. Continue to drive initiatives to seek monetization options for our assets in India and other non-focus markets. Recently, TNB had divested on LPL and exited from Pakistan. • • Ambition #1 RE Growth Strategy (UK/Europe) Grow TNB'S Renewable Energy (RE) business in the UK and Europe via the Vantage RE Ltd (launched on 1st July 2021) by leveraging on existing assets, capabilities and experience to acquire operational assets with contracted revenues. Develop greenfield RE projects via an RE Development Co (ReDevCo) platform that could provide pipeline of future operational assets to Vantage RE Ltd. Ambition #2 Grow Utility in South East Asia (SEA) We foresee extensive potential in growing revenue and returns through greenfield development and M&A across the utility value chain in SEA, leveraging of TNB's core business experience and capabilities. Vietnam: We are currently fiinalising our acquisition of 39% stake from Sunseap in 21.6MW rooftop solar project which expected to be completed by 1QFY'22. Ambition #3 Technology Catalyst Future proofing TNB with the right technologies within the Energy Transition landscape to enhance capabilities and future growth. 9#10LARGEST GENERATION COMPANY IN MALAYSIA; CONTINUOUS FOCUS ON DELIVERING EXCELLENCE SERVICE WHILE PURSUING NEW CLEAN ENERGY GROWTH OPPORTUNITIES Contracted Capacity in Peninsular Malaysia GenCo Financial Performance 3 Business Priorities Under GenCo 4 Coal Plants Capacity: 7.7GW 8 Gas Plants Capacity: 5.7GW 5 Hydro Schemes 2 Solar Plants Capacity: 2.6GW Pipeline: Nenggiri (300MW) COD 1st June 2027 We Care for The Environment • Compliance with environmental policies • ISO 14001:2015 Environmental Management System certification in GenCo operations The self-monitoring environmental management tool, Guided Self-Regulation (GSR), has been implemented across all divisions and subsidiaries. Biodiversity Management Carried out International Union for Conservation of Nature (IUCN)'s Red list programme to monitor and protect the biodiversity at two of our site: ☐ Hulu Terengganu hydro electric station: Ikan Kelah sanctuary ☐ Pergau hydro electric station: Fish resource management and Raflessia protection. . Capacity: 80.0MW Pipeline: Bkt. Selambau 2 (50MW) COD 31st Dec 2023 Coal Power Plant (Clean Coal Technology) Adopting clean coal technology, through deployment of more efficient ultra- supercritical (USC) technology for new coal power plants. For example Manjung 4, Manjung 5 and JEP. We expect to be coal free by 2050. Water and Waste Management Our power plants track water consumption on a monthly basis under a plant optimisation and waste minimization programme in compliance with ISO 14001:2015 We also monitor the consumption of materials such as fuel and the discharge of effluents (9MFY'21) REVENUE RM14,925.0 mil Performance To deliver sustainable returns, we will ensure high availability and reliability for key assets by operating within PPA terms EBITDA RM2,977.1 mil EBITDA Margin: 19.9% PROFIT AFTER TAX RM750.9 mil Growth To capture new clean and green plant-ups opportunities whilst growing our asset-light services Efficiency To deliver plant operational excellence by scaling up turnaround programs and uplifting productivity across the business 10 10#11CREATING VALUE BY CAPTURING NEW OPPORTUNITIES IN TECHNOLOGY ADVANCEMENT Electric Vehicles Objective To lead Malaysia's transition into low-carbon mobility through collaborative efforts with various stakeholders in the country. To capture growth in EV as well as part of the long-term solution to reduce GHG emissions, operate vehicles more efficiently and reduce oil dependency. Current Progress / Development TNB EV Charges 73 Stations, out of 223 stations available in Malaysia i. Signed Memorandum of Understanding (MOU) with Socar in Aug 21 to leverage on shared demand data on electric-vehicle (EV) usage in Malaysia. ii. Signed MOU with DHL in Jun'21 to explore a framework of greener supply chain that will focus on delivering environmentally friendly solutions which includes installing EV charging stations at DHL'S KL service centre and its delivery routes. allo! The Smarter Connection Broadband Business We see huge potential in the High-Speed Broadband (HSBB) business for future non- regulated stream, riding on our fibre optic infrastructure. Currently we are expanding our fibre infrastructure to premises in Melaka, Perak, Kedah, Penang and Johor. Allo has expanded to around 110,000 premises in Melaka, Perak & Kedah, out of ~150,000 premises targeted by end of 2021 Allo entered into a joint collaboration agreement with Singapore's SEAX Global Pte Ltd (SEAX) in May'21 to promote robust connectivity in Malaysia and neighboring countries, which it will leverage each other's existing infrastructure to provide faster and larger data transmission. GSPARX Rooftop Solar Solutions Note: Data as at Novt 2021 We see potential in the rooftop solar industry which allow us to diversify our source of earnings while growing our renewable energy business. Our growth strategy is focusing on selected customer segments specifically in the commercial and industrial market while leveraging on the Government's existing program under Net Energy Meter (NEM) 3.0 and Self-Consumption (SelCo). Secured a total capacity of 116.0 MW out of total target of 576MW capacity by 2025 GSPARX & TNB Retail are in the middle in finalizing MoU and SARE agreement with some public universities and healthcare providers. These projects is expected bring more than 100MWp rooftop solar capacity for GSPARX and produce recurring income for 21 years. 11#12TNB'S SUSTAINABILITY PATHWAY SUPPORTS THE NATION'S CLIMATE COMMITMENTS, CONSIDER EXISTING RE TARGETS AND IN TANDEM WITH THE PENINSULAR MALAYSIA GENERATION DEVELOPMENT PLAN Malaysia Climate Commitments To reduce Greenhouse Gas (GHG) emissions intensity of gross domestic product (GDP) by 45% by 2030 relative to the 2005 baseline TNB Sustainability Pathway 2050 Targets 1 Aspire to achieve Net Zero by 2050 (in line with 1.5°C scenario), 35% emission intensity reduction by 2035 7 MyClimate ActionCouncil (MyCAC) Development of a “green recovery plan" ☐ Strengthening the country's climate change governance Low Carbon Mobility Development Plan 2021 - 2030 National Low Carbon City Master Plan 2 Aspire to achieve Zero Fatalities and LTIF** < 1.0 3 1% profit-after-tax (PAT) towards environmental and community-related programmes **LTIF - Lost time incident frequency Strategic Pillars JPPPET* Peninsular Malaysia Generation Development Plan 2020 and RE capacity targets of 31% by 2025 and 40% by 2035 Peak Demand Projection Renewable Energy requirement & mix Energy Trilemma New Capacity Projection & Reserve Margin projection No new coal plants * Jawatankuasa Perancangan dan Pelaksanaan Pembekalan Elektrik dan Tarif / Planning and Implementation Committee for Electricity and Supply Tariff Evolve the Grid & Grow Renewables Invest in Low Emission & Green Technologies Future-proof TNB's business Unlock New Energy revenue streams 12#13OUR DECARBONIZATION ROAD AHEAD IS PAVED BY REPOWERING TO CLEANER SOURCES Build scale in renewable generation 1 RE Target of 8300MW By 2025: 1 Improve thermal plant efficiency Acceleration of RE investment towards 2050 Our Generation Portfolio Journey TNB Capacity mix (2021) 14% 45% 1 35% emission intensity reduction 41% TNB Capacity mix (2035) 10% 66% 24% By 2035: 2 Halve coal capacity Ramp up renewables energy: 8.3GW by 2025 & accelerate to 2035 TNB's capacity renewal & expansion will come from lower emission sources e.g. gas and renewable energy Our international investments will increasingly focus on Renewable Energy and emerging green technologies 1) 1 Net Zero Emission and Coal-Free By 2050: TNB continues to invest in R&D on emerging energy technologies Strategic partnerships both locally & internationally Note: TNB will focus on pursuing emerging green technologies & partnerships today, as the technologies are expected to become commercially-viable in the 2030s Our action plans above would be subject to economic feasibility assessment 1 renewables capacity includes large hydro plants 2 from the base of 2021 emission intensity 2) ■Renewable ■ Non coal thermal ■ Coal Repowering roadmap Our journey towards 35% emission intensity reduction begins with Reimagining TNB(RT). We expect the renewables build under RT to deliver a 5% reduction in our emission intensity² by 2026. By early 2030s, we expect our repowering efforts to enable a further 18% reduction in our emission intensity² ■ The remaining 12% to be achieve by the end of 2035 through the expiry of 2GW of coal capacity PPAs Renewables growth Growing our renewables capacity would be necessary to achieve our aspiration of 35% emission intensity reduction by 2035 ■ We expect to grow an average of 1GW of renewables capacity per year to ensure that 66% of our capacity is made up by renewables energy sources 13#14WE ARE PLANNING OUR CAPACITY RENEWAL AND EXPANSION WHILE PREPARING TO PHASE DOWN OUR COAL ASSETS TNB's Projected Coal Capacity (2021-2035) MW 35000 30000 25000 20000 15000 10000 5000 Note: 0 Current Stage 1 Repowering KEV Repowering M1,2 and 3 Stage 2 TNB Peninsular Coal Capacity Other Peninsular Capacity New Peninsular Capacity Stage 3 50% phase- down of TNB coal capacity The Peninsular Power system will be building 6 GW new capacity in addition to repowering of expiring capacity up to 2035¹. This presents opportunities to expand our generation business in both non-coal thermal and RE. TNB plans to extend its dominance in the Peninsular Generation sector through the following: Delivering the most competitive bids for each new capacity Ensure win-win repowering proposals of our coal assets Extending the life of our existing hydro power plants Build on our existing partnership with Sunseap and EDF to scale our renewables growth within Malaysia Leading to 2035, we target to repower our 50% of our coal assets; Kapar Energy Ventures and Janamanjung (Unit M1-M3) as part of our commitment to a greener Malaysia. The capacity renewal of our thermal assets would come from the latest gas turbine technologies², in line with Malaysia Generation Development Plan 2020 plans to ensure supply reliability whilst contributing to the national efforts to reduce emissions. 1 Report on P. Malaysia Generation Development Plan 2020 (2021 - 2039) 2 Subject to final Government of Malaysia approval 14#15THE PACE OF TECHNOLOGY DEVELOPMENT HAS INCREASED SIGNIFICANTLY, THUS WE RECOGNIZE THAT LEVERAGING ON PARTNERSHIPS AND COLLABORATION WILL BE CRITICAL FOR THE LONG RUN TNB RESEARCH (TNBR) PROGRAMS CO₂ Carbon Capture and Utilisation • • H₂ Green Hydrogen Virtual Pilot Plant Technology • DESCRIPTION TNBR is committed in providing comprehensive technical and economic assessment of CCU since 2011 as they focus on technology development of capturing CO₂ from our thermal power plant (coal fired and gas fired) and utilisation of the captured CO2 by converting into valuable outputs. The research & development (R&D) program covers Chemical Approach Carbon Capture, Biological Approach Carbon Capture and Carbon Utilisation. CCU is one of the key technologies that can reduce emissions from fossil fuels on a significant scale. This technology is critical in aligning ourselves with the global energy transition as well as achieving our aspiration of net zero emission by 2050. TNBR is focusing on providing technical and economic assessment of green hydrogen production as the production of hydrogen via sustainable energy will ensure the production of the energy would not emit carbon dioxide into the atmosphere. Current R&D include alternative method for green hydrogen such as production through two stage Anaerobic Digestion (TSAD) process of organic waste e.g. palm oil mill effluent and food waste. Green Hydrogen project will support TNB's aspiration to be the leading provider of sustainable energy solution in Malaysian and internationally. TNB is piloting a Virtual Pilot Plant (VPP) technology that utilizes software and energy storage that will enable the future peer-to-peer generation amongst energy prosumers (a consumer who produces and consumes energy). Our Partnership Offshore wind ☑ Electric Vehicle (EV) Rooftop Solar TNB has invested and taken a 49% stake of an Offshore Wind Farm in Blyth UK with EDF of France. This marks TNB's first entry into Wind Turbine Technology with a established partner. TNB has signed MoU's with DHL, SOCAR and Sime Darby Motors to explore various initiatives to accelerate the adoption of electric vehicles (EV). TNB via GSPARX has collaborated with Jabatan Kerja Raya (JKR) to install solar PV system while currently finalizing with some public universities and healthcare providers. We are allocating 3.5% of our forecasted PAT for our R&D activities from FY2022 onwards • NH3 Ammonia TNB with IHI Corp (Japan) and PETRONAS had formed a joint study into Co-Firing Ammonia at coal power stations to reduce carbon emissions. Ammonia is viewed as the most viable carrier of Hydrogen to be used as fuel. 15#16WE ARE COMMITTED TO CONTRIBUTE 1% OF PROFIT-AFTER-TAX TOWARDS ENVIRONMENTAL AND COMMUNITY-RELATED PROGRAMMES ECONOMIC & SOCIAL TRANSFORMATION ROJEK MESRA TAHUN 2 ENVIRONMENTAL SUSTENANCE PROGRAMMES TRANSFORMING LIVES THROUGH EDUCATION FY2020 Contributions • • RM173.9 million Covid-19 Response Aid (MOH & State Government) Baiti Jannati & Mesra Rakyat Better Brighter Shelter TNB Reskilling Malaysia Initiative Tree for Tree Firefly Conservation 2020 Brand of The Year Award (4th time) Sustainability & CSR Malaysia Awards Company of the Year Award Overall Excellence Global CSR Awards 2020 Platinum - Best Environmental Excellence Award Mangrove Planting Programme · Green Energy Development Fund Gold Award Silver Best Community Programme Yayasan Tenaga Nasional . My Brighter Future Trust School . Ceria Ke Sekolah • Better Brighter Vision - Excellence in Provision for Literacy & Education Award (Please refer TNB 2020 Integrated Annual Report & Sustainability Report for further details) 16#17RECOGNISED GLOBALLY FOR OUR CONTINUOUS COMMITTMENT TO OPERATE AS A SOCIALLY AND ENVIRONMENTALLY RESPONSIBLE ORGANISATION Our sustainability disclosure are based on Bursa Malaysia's Main Listing Requirements and global disclosure frameworks: Bursa Malaysia Sustainability Reporting Guide (2nd Edition) Task Force on Climate-related Financial Disclosures (TCFD) framework GRI Electric Utilities Sector Disclosures United Nations Sustainable Development Goals (UN SDGs) ESG Rating - 3.0 Rating: 0 to 5 MSCI FTSE4Good (5 represents the highest score) ESG Rating - BBB Rating: CCC-AAA (AAA represents the highest score) ARA AUSTRALASIAN REPORTING AWARDS Australasian Reporting Awards 2021 1) TNB was conferred Gold Award for the 4th time 2) TNB received a Silver Award for sustainability reporting 17#18FORWARD GUIDANCE Electricity Demand 2021 Forecasted at 2.9%, in line with GDP projection of 3.0% to 4.0% RP3 (2022- 2024) Final stage discussion with Energy Commission CAPEX 2021 Total: RM9.5bil Regulated Recurring : RM7.3bil Others: RM2.2bil Non-Regulated Business Strengthen existing and explore new revenue streams 5 low carbon ventures MOUs signed Sustainability Pathway Continuously ramping up our sustainability efforts towards achieving our net zero emission aspiration by 2050 Dividend Continue to honour our dividend policy of 30% - 60% dividend payout ratio, based on adjusted PATAMI 18#19TENAGA NASIONAL Better. Brighter. APPENDIXES#20INCENTIVE BASED REGULATION (IBR) Base Tariff i. Base tariff is determined by the regulator for every 3 years*, taking into account: OPEX, depreciation of regulated assets & tax expenses of regulated entities - Transmission, Grid System Operator, Single Buyer operation, Distribution Network and Customer Services/Retail Power purchase cost charged by generators to the Single Buyer ii. iii. Return on regulated assets (rate base) of regulated entities Imbalance Cost Pass-Through (ICPT) ICPT is 6-monthly pass-through mechanism of variations in uncontrollable fuel costs and other generation specific costs (imbalance cost) incurred by utility for the preceding 6-month period ICPT Surcharge Base tariff ICPT Rebate * Current regulatory period, RP2 extension/interim year, is a one-year extension of RP2. The decision by EC was made due to the uncertainty in demand outlook for 2021 and the instability of the current global fuel markets following the COVID-19 pandemic. RP2 extension / interim year parameters Average Tariff by Entities (sen/kWh) Base tariff for RP2 Extension Year (2021) (sen/kWh) 7.81 1.55 4.13 25.80 0.10 0.06 3.9% 19.8% 0.3% 0.2% 10.5% 65.4% Average Tariff by Entities (sen/kWh) 39.45 Commercial 46.93 47.92 39.45 Base Tariff 38.53 36.85 Industrial 36.15 32.95 Domestic 31.66 Single Single Grid Grid Buyer Buyer System Distribution Network Retail Base Tariff Generation Operations Operator ■RP2 / RP2 Extension Year (2021) ■ RP1 Fuel Parameters Year 1 Year 2 Year 3 Other Parameters COAL WACC USD67.45/MT @ RM4.212/USD RP2: USD75.00/MT (RM14.47/mmbtu @ RM4.212/USD) 7.3% RP2: 7.3% GAS RM27.20/mmbtu (Jan'21 – Dec'21) RP2: RM24.20/mmbtu (Jan'18 - Jun'18) RM25.70/mmbtu (Jul' 18 - Dec'18) i. ii. iii. RM27.20/mmbtu (Jan'19 - Dec'20) OPEX RM6.30bn (approved OPEX) RP2 RM18.2bn (Avg. yearly: RM6.07bn) Regulated Asset Based (RAB) TARIFF 39.45 sen/kwh RP2: 39.45 sen/kwh CAPEX RM7.3bn (approved CAPEX) RP2 RM18.8bn (Avg. yearly: RM6.63bn) RM62.4bn (Expected closing RAB 2021) RP2 closing: RM59.1bn 20 20#21REGULATORY PERIOD INTERIM YEAR RP2 (2018-2020) 2021 RP3 (2022 2024) 2018 2019 2020 2021 2022 2023 2024 RP2 Extension / Interim Year The Government has approved a one-year extension of the Second RP2 of the IBR for year 2021. This decision was made following the uncertainty in demand outlook for 2021 and the instability of the current global fuel markets following the COVID-19 pandemic. ICPT surcharge and rebate position Implementation Period Jul – Dec'18 - Jan - Jun'19 ICPT Surcharge/(Rebate) Jan - Jun'18 1.35sen/kWh Jul – Dec'18 2.15sen/kWh Jan - Jun'19 2.55sen/kWh Jul – Dec'19 Jul – Dec'19 2.00sen/kWh Jan - Jun'20 Jan - Jun'20 0.00sen/kWh - Jul – Dec'20 Jul – Dec'20 (2.00sen/kWh) Jan - Jun'21 We are currently in the final stage of discussions with the Energy Commission and the ministry. Jan - Jun'21 (2.00sen/kWh) Jul – Dec'21 RP3 Update 21#22RENEWABLE ENERGY INVESTMENTS TNB's RE Capacity: 3,475MW (as of Nov/21) TNB's RE Strategy WIND 186 MW ++ International: ■ UK (TNB Wind Ventures): 68 MW ■ Turkey (GAMA): 118 MW SOLAR 587 MW International: ■ UK (Vortex): 365 MW ■ India (GMR): 26MW Domestic: ☐ Large scale solar: 80 MW ☐ Rooftop PV: Total 116.0 MW (secured capacity) International 1) Renewable Energy Driver (UK / Europe) 2) Growing TNB's utility business in South East Asia (SEA) 3) Technology Catalyst Focus Market ■ TNB's growth strategy will focus on selected growth markets and regions where we have presence (UK, Europe and South East Asia) and specific asset classes/technology that are key to the Energy transition. The country selection is based on fit to TNB strategy, elimination of high-risk countries, power growth, market attractiveness and openness to foreign investments. BIOGAS & BIOMASS 13 MW HYDRO 2,690 MW Domestic: ■ Biogas: 3MW ■ Biomass: 10MW International: Turkey (GAMA): 131.5 MW Domestic: Large Hydro: 2,536 MW ■ Mini Hydro: 22 MW Domestic 1) Win LSS - Largest driver which focuses on winning local LSS bids, exploration of new entry points through NEDA and Green Corporate PPA as well as expansion on Asset Management Services. 2) Secure Small RE - Focus on mini hydro, biogas and waste to energy through the existing Feed-In Tariff Scheme and other initiatives. 3) Distributed generation / rooftop solar - To be the top solar distributed generation provider in Malaysia through GSPARX, with end to end delivery. 22 22#23GROUP INSTALLED CAPACITY Capacity as at Nov'21 (MW) Fuel Type Domestic International Total Gas 7,024.4 1,476.0 8,500.4 Coal 9,080.0 1,650.0 10,730.0 Oil 1,190.0 1,190.0 14% Hydro 2,536.1 131.5 2,667.6 5% Coal Wind 185.6 185.6 Gas Solar 80.0 391.0 471.0 RE Total 18,720.5 5,024.1 23,744.6 Oil Mini Hydro 21.8 21.8 45% Biogas 3.2 3.2 Biomass 10.0 10.0 Rooftop solar (secured) 116.0 116.0 Total inclusive small RE 18,871.5 5,024.1 23,895.6 Note: Gross installed capacity (include minority stakes), exclude SESB 36% 23#24IN THE NEAR TERM, WE CONTINUE TO SUPPORT AND BUILD TOWARDS ENERGY TRANSITION Transmission system enhancements Improving network intelligence to enable energy transition Distribution system enhancements Smart Grid Index (SGI) 2025 target: 85% (2020: 62.5%) Deliver a resilient, reliable system with bidirectional energy flow. Asset Investment Planning Enhancements Grid Project Management Enhancements Advance Fault Analysis System Advanced Metering Infra (AMI) Advanced Distribution Management System (ADMS) Volt-Var Optimisation 85% of planned system upgrade completed (Q3) 100% of planned system upgrade completed (Q3) 70% of planned development work completed (Q3) 86% of annual AMI installation completed (Q3) 66% of planned upgrades completed (Q3) 80% capacity optimized (Q3) of annual MVAR Retail service enhancements * 74k RT* 26% Share of domestic district cooling system market (Q3) *refrigeration ton District Cooling System (DCS) Expansion through TNEC ☐ ☐ ☐ TNB has been actively involved (since 1993) in providing district cooling solutions to customers. DCS technology is capable of reducing 20% - 35% overall building energy consumption when compared to a standard air-conditioning system. In July 2021, TNB (through TNEC) has commenced its operation of the existing KLIA Cogeneration plant for a 20-year concession. TNB is now the main cooling energy supplier for both KLIA and KLIA2, and one of the largest domestic DCS player. 24 24#25VERTICALLY INTEGRATED UTILITY COMPANY SERVING MORE THAN 9.0MIL CUSTOMERS THROUGHOUT PENINSULA MALAYSIA Total Customer Total Employees TNB: 9.6mn SESB: 0.7mn 35,071 TNB Sectoral Sales Analysis* Industrial ■Commercial 1.0% 0.3% Domestic Others 82.0% Note: Data/Info as at Sep 2021 1.7% Total Assets Total Unit Sold RM174.9bn 82,904.2 GWH 2.1% 16.7% 25.4% 37.1% 28.6% 39.1% Customer mix * Peninsular Malaysia only (TNB exclude SESB and other subsidiaries) 35.8% 30.2% Sales (Gwh) Sales (RM) 25#266,526 7,298 11,549 11,572 Industrial 0.2% 7.5% 3.0% 15.4% 10,509 11,293 4Q 1Q 11.8% 5.1% 7,093 7,453 4Q 1Q Domestic 8,302 8,247 5.2% (0.7%) 7,342 8,218 2Q 20 3Q HIGHER Y-O-Y ELECTRICITY DEMAND IMPROVED DUE TO RESUMPTION OF BUSINESS OPERATION 9,302 10,737 11,478 2Q 3Q 10,205 . (11.1%) • 9MFY'21 main contributors for the drop in commercial sector: . Retails Accommodation Educational Unit Sales (GWh) Growth 2019 Y-o-Y 2020 Q-o-Q 2021 Sector Mix (%) 9MFY'21 vs 9MFY'20 30% 11.9% 32% 39% 38% 2% 2% Industrial Domestic 9MFY'20 28% 9MFY'21 29% Commercial Others 614 4Q 583 (5.0%) 577 1Q 577 10,084 9,001 Commercial (6.4%) (10.7%) (12.6%) 14.2% (16.4%) 9,759 8,530 7,435 8,490 4Q 1Q 2Q 3Q 9,347 7,816 Others 0.0% 1.9% 4.1% *includes Agriculture, Mining & Public Lighting 1.8% 559 2Q 581 581 591 3Q 26#27TNB MARKET CAPITALISATION OF RM52.9BIL AS AT 30 NOVEMBER 2021 Khazanah Nasional Berhad 30 Nov❜21 18.4 16.6 31 Dec'20 18.5 17.7 12.1 Permodalan Nasional Berhad (PNB) Employees Provident Fund Board (EPF) Kumpulan Wang Persaraan (KWAP) 7.4 7.3 Petronas Chemicals (%) 1.5 1.6 25.7 Other Government Agencies 25.6 16.4 Local Corporation & Retail 12.9 18.3 Foreign Shareholding Top 10 KLCI Stocks by Market Capitalisation RM bil Maybank 94.7 (0.4%) 95.1 76.5 Public Bank (4.3%) 80.0 68.0 +14.4% 59.4 57.9 IHH Healthcare +20.0% 48.3 52.9 CIMB Group +24.0% 42.7 52.9 TNB 59.4 Pacific, 0.1% Africa, 0.01% Press Metal Aluminium 43.2 (10.9%) +27.5% 33.9 Europe, 14.2% 39.2 Asia, 35.1% Hong Leong Bank (0.6%) 39.5 Foreign Shareholding (%) North America, 50.6% 36.6 Maxis (7.4%) 39.5 Axiata Group 35.8 34.3 +4.4% 24.4 24.1 20.8 18.4 12.9 12.4 12.1 12.4 12.3 12.1 Aug'17 Dec '17 Dec '18 Dec'19 Dec'20 Mar'21 Jun'21 Sep'21 Oct'21 Nov'21 Institutional: 11.97% Individual: 0.09% Source: Share Registrar, Bloomberg and IR Internal Analysis 30 Nov 2021 31 Dec 2020 Note: 1. Top 10 KLCI ranking by Market Capitalisation as at 30th November 2021 2. TNB Latest Market Cap: RM53.4bil (6th), as at 31st December 2021 27#28THANK YOU For further enquiries, kindly contact us at: Investor Relations Office: TENAGA NASIONAL Better. Brighter. CoE Investor Relations Group Finance Division Tenaga Nasional Berhad 4th Floor, TNB Headquarters No.129, Jalan Bangsar, 59200 Kuala Lumpur, MALAYSIA +603 2108 2128 +603 2108 2034 FAX [email protected] ☐ www.tnb.com.my Investor Relations Team: @ Ms. Mehazatul Amali Meor Hassan +603 2108 2126 [email protected] Ms. Sakinah Mohd Ali +603 2108 2840 [email protected] Mr. Ahmad Nizham Khan +603 2108 2129 ☑[email protected] Ms. Intan Nur Najihah Basiron +603 2108 2134 [email protected]