GGU Energy and Water Utilities Investment Overview

Water utilities - capitalizing on efficiency gains Underdeveloped industry offers ample potential for efficiency gains and long-term sustainable growth Water balance (m³), 2015 Significant funding-gap in the past has led to largely depreciated water and sanitation infrastructure with an average technical water losses at 50% (4-5 times higher than in western Europe) which sets the ground for significant efficiency gains in the future under well managed operations and infrastructure planning Water losses are also caused due to aging assets in the residential buildings and excessive water consumption, usually symptomatic to non-metered customers (~70% of the customer base) GGU has introduced extensive measures against resource dissipation (e.g. zoning, bulk metering) and has motivational schemes for staff to identify water larceny and is continuously implementing resource efficient practices within its infrastructure 7% 33% 833mn m³ ■Water losses ■Water sales 60% ■ Own consumption Source: GNERC GGU is the only profitable player on Georgia's WSS market with over 95% average collection rates 6% of the customer base for water utilities in Georgia are commercial entities, the rest are households Snapshot of Georgia's WSS market Average collection rates from households in Georgia 50%, while GGU's average Company Coverage area Country coverage Ownership type collection rates are around 95% GGU Tbilisi, Rustavi, Mtskheta 28.3% Private Water utilities other than GGU operate on state subsidies due to low collection rates and unauthorized water consumption BWC Batumi 3.7% Public 45.7% of the population gets serviced on the municipal level with bad service quality, frequent and lengthy interruptions and poor coverage UWSCG Part of Georgia 20.7% Public Other Rest of Georgia 47.3% Municipal Source: GNERC GGU October 2017 page 23

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