The MVM Group performs diverging and wide-ranging tasks

MVM Zrt. and the companies it controls together constitute the National Power Group of Hungary, the MVM Group. As a competitive strategic holding, the Group is a key player with integrated operation in the Hungarian electricity market, which is also active in the electricity industry of its wider region.

The MVM Group has been operating as a what is called Recognised Corporate Group since 1 June 2007. Under this legal institution, the parent company MVM Zrt. coordinates the business activities of almost all subsidiaries in the Group in possession of a uniform, effective management tool system. Although a member of the Group in terms of ownership, the Transmission System Operator Company in Hungary, MAVIR ZRt., is placed outside the Recognised Corporate Group due to its special status.

The operation of the MVM Group as a strategic holding ensures that group-level optimum be given priority in the activities of the individual member companies, in addition to the full enforcement of the independence of licence-holding companies, which allows the utilisation of the synergy potentials existing within the Group, the improved efficiency of resource utilisation, and, as a result of all these, the improvement of profitability, as well as the increase of the market and ownership values of the Group. At the same time, as a nationally owned Group, MVM has an important role in ensuring, by supporting energy policy objectives, that the State discharge its responsibilities.

The MVM Group plays the following main roles:

• Electricity Trader:

The MVM Group is the dominant electricity wholesale trader in Hungary (MVM Trade Villamosenergia-kereskedelmi ZRt.), and also holds considerable interests in the retail market (MVM Partner ZRt., MVM Adwest GmbH). Relying on its international relations and professional competence, it encourages the integration of the individual electricity markets of the region, with special regard to Hungary’s interests.

• Power Generator:

As generator, the MVM Group also plays a key role — through the Paks Nuclear Power Plant — in the Hungarian market. In expanding its generation portfolio, the Group gives priority to commercial considerations while enforcing the interests of system balancing and the security of supply as much as possible. The MVM Group is also active in the regional district heating market, where it implements modern technologies to provide favourably priced and environmentally sound district heating supply to the given region in Tatabánya, Miskolc and North Buda.

• Transmission System Operator (ITO):

MAVIR ZRt., which is also owns the transmission grid, operates as a subsidiary in the MVM Group according to the ITO model ensuring the enforcement of the rules for functional unbundling which conform to the relevant EU Directive, the legal framework of which was laid down by the Hungarian Parliament in an amendment of the relevant Act passed at the end of 2009. The integrated structure of the Group creates a special dual situation for the system operator, because the operational model ensures the independence of its activities, on the one hand, and its group membership allows benefits arising from integrated operation to be taken advantage of, on the other hand.

TheTransmission System OperatorCompany is responsible for the management, operation, upgrading and expansion to the necessary extent of the high-voltage transmission grid. It is a primary consideration in its activities that market players should have access to the transmission grid under equal conditions. The transmission activity is made complete by the work of other members of the MVM Group, which includes the implementation of network development projects (OVIT ZRt.) and the associated engineering services (MVM ERBE ENERGETIKA Mérnökiroda Zrt.). It has been operating the HUPX Hungarian Power Exchange since 1 June 2010.

• Ownership Participation in the Electricity Market of the Region:

It is the strategic objective of the MVM Group to appear as an investor and project company not only in Hungary, but also in the electricity markets of other countries of the Region. Such international investments are primarily aimed at strengthening the market position of MVM and increasing its ownership value, with special regard to the requirements of ensuring the balance of the Power System and the security of supply.

• Supporter of the State in Discharging its Responsibilities:

As the integrated national power company of Hungary present in every segment of the entire electricity industry, the MVM Group is capable of supporting the State in assuming roles in the energy industry to a considerable extent. Relying on its market position and using market instruments, MVM contributes actively — in accordance with the prevailing legal framework and observing the independence of the licence-holding companies — to fulfilling long-term national energy policy objectives, guaranteeing the security of supply, and to discharging the responsibilities of the State associated with keeping electricity prices at a favourable level — in the interest of all electricity consumers in Hungary.