SVST.L Regulatory News (SVST)

Severstal has increased its stake in the JV WRS Towers to 49%, having bought 24.5% from RUSNANO

September 13 2021, Moscow - Severstal has bought 24.5% from one of the partners of the joint venture WRS Towers LLC - JSC RUSNANO. The transaction was closed on September 2021, as a result of which Severstal's share in the joint venture increased to 49%. The share of another partner - the Spanish company Windar Renovables S. L.-remains at the same level of 51%.

The decision of RUSNANO to withdraw from the project for the production of towers for wind power plants (wind turbines) in Taganrog was made after the joint venture reached the planned economic indicators.

WRS Towers, a joint venture between Severstal, Windar Renovables S. L. and RUSNANO, was established in 2018. Initially, the partners ' shares were distributed as follows: Windar Renovables - 51%, RUSNANO and Severstal - 24.5% each. Two years later, the WRS Towers reached their design capacity, which is up to 145 towers per year. That is how many wind turbine towers were produced in 2020. In total, since the beginning of its work, the company has produced more than 340 steel wind turbine towers. During the existence of the WRS Towers, more than 1 billion rubles were invested in its development.

Today, WRS Towers is the leading manufacturer of wind power towers in Russia. "Green" power plants built using the company's equipment have already been installed in the Kamensky, Azov and Verkhnedonsky districts of the Rostov region, as well as in the Murmansk region. VRS Towers also plans to supply products for export.

Steel billets for the towers of wind power plants are manufactured at the service metal center in Kolpino (SMC-Kolpino, the company is part of the Severstal Russian Steel division). The supply of steel products from Severstal guarantees the raw material safety of the project and quality control throughout the entire technological chain.

Alexander Shevelev, CEO of Severstal, commented:

"The increase in the share in the joint venture was a logical step to strengthen Severstal's presence in the dynamically developing renewable energy market. Over the three years of its existence, the joint venture has demonstrated good results, becoming a partner of the world leaders in the wind power plant market - Siemens Gamesa and Vestas. The management of VRS Towers is actively negotiating with potential customers about the supply of wind power towers; we plan to start shipping the first export orders in 2022. We see the greatest potential in the CIS countries, where wind energy is now beginning to take shape, as well as in Northern Europe.

Our company pays special attention to environmental problems, and increasing the presence in the equity capital in the WRS Towers fully meets the ESG strategy of Severstal".

Alisher Kalanov, Head of Investment Division at RUSNANO, added:

"The cycle of project support from RUSNANO, as a development institution that forms innovative ecosystems along the entire value chain, including production and education, has been successfully completed and as per its mandate RUSNANO exited from the project. RUSNANO does not plan to stop there and jointly with Windar, Vestas, and Severstal are discussing the ability to expand the product range of goods manufactured by WRS Towers LLC - both those customized for the future Russian government renewable energy support program and for the potential manufacture of offshore wind turbine towers - including the ones used to construct wind farms to provide the 'green' electricity to produce 'green' hydrogen".

"Through the different actions that RUSNANO has developed, this company has been a key player in the implementation of this project and also because it allowed Windar Renovables to reinforce its position in the Russian market. As a result of this operation, Windar Renovables and RUSNANO have developed a good relation that we value in a very positively way for all that it has brought for us", said Justo Acedo, General Manager at Windar Renovables.

For reference:

The steel tower of the wind turbine is a hollow structure consisting of a set of cylindrical sections of a conical shape, on which the gondola and the rotor of the wind turbine are installed, in order to contact the rotary mechanism of the wind turbine with the wind flow. Steel towers are made of pre-cut steel sheets according to certain sizes, which are then rolled and welded together with subsequent finishing, painting and equipping with internal components. The height of the tower can reach 120 meters, the diameter is up to 4.5 meters, and the weight is up to 270 tons.

For further information, please contact:

Severstal Investor Relations

Vladimir Zaluzhsky, Nikita Klimantov

T: +7 (495) 926-77-66

vladimir.zaluzhsky@severstal.com

na.klimantov@severstal.com

Severstal Public Relations

Anastasia Mishanina

T: +7 (495) 926-77-66

anastasia.mishanina@severstal.com

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PАО Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, Latvia and Poland. Severstal is listed on MOEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $6,870 mln and EBITDA of $2,422 mln in 2020. Severstal's crude steel production in 2020 reached 11.3 mln tonnes. www.severstal.com