ACRA ASSIGNS WATCH STATUS ON THE CREDIT RATING OF KGC PJSC

The Watch status has been assigned on the credit rating of KGC PJSC (hereinafter, KGC or the Company) since the General Prosecutor Office of the Russian Federation has filed a claim to seize the assets of one of the Company’s ultimate beneficiaries. The Company is brought in this lawsuit as a third party and not as a defendant, but currently the Agency is unable to assess the risks associated with a potential negative impact of these events on KGC’s creditworthiness.

The Watch status reflects the need to receive additional information on the ongoing events and to assess the impact of this information on the Company’s business, creditworthiness and credit rating.

The current credit rating of KGC — A-(RU), outlook Positive — is based on its strong position in Kurgan’s heat supply market (KGC is the key company that supplies heat to the city, which has a direct impact on the Company’s positions in the electric power market due to the compelled mode of operation), good business profile and profitability, and industry-average corporate governance practices. The Company’s geographic diversification reflects the level of socioeconomic development of its region of presence. The leverage and liquidity assessments are medium, but coverage is high. The Company’s credit rating is constrained by the size of its business and systemic regulatory risks.

KGC (Kurgan Generating Company) is a regional producer and supplier of electricity and thermal power in Kurgan and the Kurgan Region. The Company’s assets include two electric power plants and boiler houses with a total installed electric capacity of 473 MW and a heat capacity of 1,806 Gcal/h, and thermal power distribution grids.

potential outlook or rating change factors

The Watch status assumes the high likelihood of a rating action over the next 12 months.

Removal of the Watch status and affirmation of the credit rating may be prompted by:

• Court decision not affecting the Company’s credit quality.

Removal of the Watch status and upgrade of the credit rating may be prompted by:

• Court decision not affecting the Company’s credit quality;

• Weighted FFO before net interest and taxes exceeding RUB 5 bln;

• Weighted FFO before net interest and taxes margin exceeding 25%;

• Weighted leverage (total debt to FFO before net interest) declining below 1.0x;

• Weighted coverage (FFO before net interest to interest) exceeding 10.0x.

Removal of the Watch status and downgrade of the credit rating may be prompted by:

• Court decision able to affect the Company’s credit quality;

• Weighted FFO before net interest and taxes declining below RUB 0.5 bln and weighted FFO before net interest and taxes margin declining below 8%;

• Weighted total debt to FFO before net interest exceeding 2.0x and weighted coverage (FFO before net interest to interest) declining below 5x;

• Loss of status as Kurgan’s single heat supplier;

• Significantly worse conditions for the Company’s tariffs;

• Loss of status as a compelled power generating company for the purpose of reliable heat supply;

• Deterioration of access to external liquidity sources.

rating components

Standalone creditworthiness assessment (SCA): a-.

Support: none.

issue ratings

There are no outstanding issues.

regulatory disclosure

The credit rating has been assigned to KGC PJSC under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.

The assessment of the economic development of the rated entity’s region of presence was determined based on the principles of the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation.

The credit rating of KGC PJSC was published by ACRA for the first time on January 25, 2022. The credit rating and its outlook are expected to be revised by November 21, 2025.

The credit rating was assigned based on data provided by KGC PJSC, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and KGC PJSC participated in its assignment.

In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.